Ha! I love the Reddit title: Step 1) Bank of America needs and gets Bailout money, Step 2) BOA buys Merrill Lynch. Step 3)……….. Step 4) Bank of America needs Bailout money.
Banks in Need of Even More Bailout Money
In a sign of deepening fragility among the nation’s largest banks, the government is preparing to throw a new multibillion-dollar lifeline to Bank of America, several people briefed on the talks said Wednesday, the latest effort to stem a tide of growing losses in the financial system.
Bank of America, which was already granted $25 billion in capital from the Treasury’s Troubled Asset Relief Program in October, is seeking billions more to shore up its balance sheet as it struggles with mounting losses at Merrill Lynch, which it recently acquired, said these people, who were not authorized to speak publicly.
Bank of America’s shares fell 4.2 percent, to $10.20, in regular trading Wednesday, and are down nearly 30 percent this year. At one point in after-hours trading, the shares fell to their lowest level since 1991.
The government’s willingness to feed Bank of America a new tranche of taxpayer money comes on the heels of greater federal intervention in Citigroup. After pumping more than $45 billion in Treasury money onto its balance sheet, the government has put pressure on Citigroup to dismantle its troubled empire in an effort to stop losses and curb capital injections. (Source: The New York Times)
I wonder how would the Obama team respond to this.
US bank Citigroup has announced plans for about 52,000 new job cuts, on top of 23,000 cuts already made this year.
Citigroup job cull to hit 75,000
Citigroup said the 75,000 job cuts represented a reduction of about 20% of its staff, leaving it with 300,000 jobs worldwide “in the near term”.
The cuts will come from redundancies, the sale of units and natural wastage, the bank said.
Citigroup has lost more than $20bn (£13.6bn) in the past year because of the global financial crisis.
It has posted four straight quarterly losses and some analysts believe the bank will not make a profit again until 2010. (Source: BBC)
My blog seemed pessimistic, perhaps I should post more good news.
Citibank people sent me an email reassuring their customers on the company. It’s kinda saying Citibank is better of the worse. Anyway, more money disappearing:
Citigroup posts loss amid credit costs
NEW YORK (Reuters) – Citigroup Inc, battered by the global credit crisis, posted its fourth straight quarterly loss on Thursday, hurt by more than $13 billion of credit costs and write-downs tied to complex and low-quality debt.
The bank said it was making good progress on shedding assets and cutting costs. But tight credit conditions and potential recessions globally could cut into its other businesses, from retail brokerage to credit card lending.
Citigroup posted a third-quarter net loss of $2.82 billion, or 60 cents per share, compared with a profit of $2.21 billion, or 44 cents, a year earlier. It loss from continuing operations was $3.42 billion, or 71 cents per share.
Citigroup ceded its crown as the largest U.S. bank by assets to JPMorgan Chase & Co after shedding $50 billion of assets since June. Citigroup ended September with $2.05 trillion of assets, while JPMorgan had $2.25 trillion. (Source: Reuters)
November 4 is the start of the US elections. I can’t wait. I am more excited about this than any other thing that happens this year.