Don't know why financial-types think big mistake-riddled banks won't hit book values, as they always do in financial bad times. Oh right, it might be because Citi's book value is essentially negative.
Citi is essentially showing you their hand, and it's garbage, and they are not playing low-ball poker (but you might be if you short the stock). How many times do they have to raise capital, in order for the market to understand they are in serious trouble?
Eventually, cash supplies for savior investors like hedge funds and oil-money will run out, and when it does, Citi and it's big bank friends will trade for discounts to book value. And with many book values being effectively zero after full write-downs of assets, it's going to get ugly.
Expect Citi to test it's lows at least, and probably in under a year's time, if not by summer's end.
$24.1795 (05/09/08)
