Citigroup Worries Hit World Markets

Prince out; company to report $8-11B more in writedowns

(NEWSER) - Citigroup CEO and Chairman Charles Prince resigned today, clearing the way for former US Treasury Secretary Robert Rubin to be named chairman, the Wall Street Journal reports. Sir Win Bischoff was named interim chief executive. Citigroup also plans to report $8-$11 billion in mortgage-related writedowns, on top of the $2.2 billion in third-quarter losses that helped sink Prince's leadership. More»

Conversion could stretch bailout fund by $100 billion

(NEWSER) - President Obama’s economic team has figured a way to keep the banks afloat without asking Congress for more money, by converting the government's existing bailout loans to common stock, the New York Times reports. The conversion plan could stretch Treasury’s fund by more than $100 billion, but it would expose taxpayers to increased risk and would be another step in the politically explosive direction of nationalization. More»

Richard Parsons, an Obama adviser, will be chair of ailing bank

(AP) - Former Time Warner CEO Richard Parsons—an economic adviser on Barack Obama's transition team—will become the new chairman of Citigroup next month. The ailing bank has suffered five straight quarters of losses and received $45 billion in government aid as it struggles to stay afloat amid the credit crisis. Last week, the company said it would reorganize into two units as it reported a fourth-quarter loss of $8.29 billion. More»

(NEWSER) - Freddie Mac, the swamped mortgage giant seized by the government two months ago, asked for $13.8 billion from the Treasury today after a record quarterly loss plunged its net worth into the negative, Bloomberg reports. Sister company Fannie Mae, also under government control, said this week it might need funds beyond the $100 billion previously earmarked for each of the firms before the end of the year. More»

Banking behemoth will shed 10,000 as it grasps for positive cash flow

(NEWSER) - Citigroup, seeking profitability after suffering net losses of $20 billion over the past year, is laying off at least 10,000 employees worldwide and raising rates on some credit card holders, the Wall Street Journal reports. Officials were told to trim employee compensation budgets by 25%, allowing managers to minimize firings by cutting higher-paid bankers and traders from payrolls. More»