Skip to: Content
Skip to: Site Navigation
Skip to: Search

October 10, 2008 7:09:39 PM CDT

Learn about Newser Points »

« Back to the grid | Next story »

Citigroup Staves Off Fire Sale— for Now

Posted Oct 19, 07 9:00 AM CDT in Business,  US 

(Newser) – One of the central goals of the new superfund announced by Citigroup and other major banks is to provide a buyer for structured investment vehicles, the low-yield capital-raising investments whose demand has dropped like a stone in the credit crunch. Citigroup announced today its SIVs are covered until year's end. But as several European SIVs face turmoil, bankers remain cautious.

As demand for the mortgage-backed securities that SIVs purchased dissipated, banks have been forced to sell off their holdings at fire-sale prices. The new superfund, called M-LEC, should stave off the worst for Citigroup, the world's largest bank and the most exposed to SIV troubles. But nobody's happy about it: some graceless bankers have termed bad-news investments "SIV-positive."

Sources Wall Street Journal, Economist

0 comments | Print E-mail | Digg Seed this on Newsvine Add this link to Del.icio.us StumbleUpon

Related Newser Stories

  • Feds Give Green Light to Wells Fargo-Wachovia

    4 hours, 7 minutes ago
    Feds Give Green Light to Wells Fargo-Wachovia Federal antitrust regulators cleared Wells Fargo's $11.7 billion acquisition of Wachovia Corp. today, capping a weeklong battle for the Charlotte, NC-based bank. The rapid approval comes a day after Citigroup walked away from its acquisition effort. Citigroup plans to seek $60 billion in damages for breach of contract but has decided not to challenge the Wells Fargo-Wachovia deal in court, the AP reports. More »

  • Bailout Czar Kashkari Joins World's Big Money Elite

    Oct 7, 08 1:01 PM CDT
    Bailout Czar Kashkari Joins World's Big Money Elite A behind-the-scenes player at the Treasury Department just weeks ago, 35-year-old Neel Kashkari’s financial heft as the agency’s bailout czar puts him on par with the heads of sovereign wealth funds, Politico reports. The self-described “free-market Republican” enjoyed a meteoric rise through the department, where he was part of a small team working on the $700 billion plan months before it was proposed. More »

  • Wells Fargo Buys Wachovia for $15.4B, Trumps Citigroup

    Oct 3, 08 7:17 AM CDT
    Wells Fargo Buys Wachovia for $15.4B, Trumps Citigroup Wells Fargo will buy struggling bank Wachovia in a $15.4 billion takeover, reports the Wall Street Journal. The deal was announced today and comes just days after Wachovia had reached an agreement to sell its banking operations to Citigroup. The Wells Fargo purchase requires no government assistance, and the San Francisco bank will buy 100% of Wachovia, while Citigroup only wanted a fraction.
    More »

  • Citigroup to Buy Wachovia, Backed by FDIC

    Sep 29, 08 9:00 AM CDT
    Citigroup to Buy Wachovia, Backed by FDIC Citigroup will purchase struggling Wachovia’s banking operations in a $2.2-billion government-backed deal, the Wall Street Journal reports. The FDIC has agreed to take on a portion of potential losses in the plan, which leaves three banks, including Bank of America and JP Morgan Chase, in control of nearly a third of deposits nationwide, the Washington Post notes.
    More »

  • Battered Wachovia Shops for Buyers

    Sep 27, 08 11:31 AM CDT
    Battered Wachovia Shops for Buyers Wachovia is in a new round of talks with potential buyers, reports the Wall Street Journal, courting Citigroup, Wells Fargo, and Spain’s Banco Santander to help guard it from the financial market crisis. While the bank says it’s not in immediate danger, shares at Wachovia, which holds a $120 billion mortgage portfolio, dropped 27% yesterday on the news of Washington Mutual’s failure.
    More »

Charles Prince, chairman and CEO of Citigroup Inc.   (Associated Press)
The Citibank logo is shown on a branch office in this April 11, 2007 file photo in New York. Citigroup Inc. estimated Monday, Oct. 1, 2007 that its third-quarter profit will drop 60 percent, as the nation's...   (Associated Press)
Japanese businessmen walk past a huge signboard of Citibank in Tokyo, Tuesday, March 20, 2007.   (Associated Press)
« Prev« Prev | Next »Next » Slideshow
Our editors also recommend:

Threads (
1
 of 2)

Tags

credit crisis  • Citigroup  • mortgage backed securities  • structured investment vehicles


Loading...

Premium Articles from HighBeam

Find more articles like this

Today's Most Popular

Loading...

Other US Stories

What is Newser?

2008 Codie Finalist

Newser gives you more news in less time. We search for the best and most important stories all over the web, read them for you, and deliver concise and sharp summaries—along with links to the full text. Newser provides a way to stay on top of an ever-expanding horizon of news and opinion—politics, sports, business, trends, technology, personalities, crimes, and controversies. Newser keeps you not just better informed, but, with our signature graphic interface and smart condensed format, more enjoyably informed.

Learn more »