Citigroup's public relations department must be having a whale of a day, but why isn't there any evidence of it?
Not only did Andrew Martin and Gretchen Morgenson publish a probing piece yesterday in the New York Times, which included this quote from Chris Whalen, managing director of Institutional Risk Analytics, "I continue to believe the equity is worth zero and that the company will have to go to bondholders for some kind of money to make the bank stable," but this morning, Whalen continued to sound the alarm , bringing renewed attention to Mike Mayo's analysis that Citi may need to start writing down $10 billion in deferred tax assets in the fourth quarter.
And that's over and above garden-variety credit-card losses and the like. Ms. Morgenson and Mr. Martin touched on the broad issue: "Citigroup's operations are not yet generating enough profits to cover potentially devastating write-downs to come."
As a Citi customer myself who has been just too lazy to switch to anyone else, trapped by the convenience of bill pay and linked accounts, I find myself seriously considering switching. And that's from someone who understands that my deposits are covered no matter what, unlike my 80-year old neighbor, who used to question me all the time about how safe her money was with HSBC, until I delved into the FDIC Web site and printed out a clear explanation that eased her concerns.
Citi might want to do some similar reassuring right about now. Dontcha think??
I checked the Citi Web sites, both consumer-facing and corporate, and expected to find a press release from Vikram Pandit. Perhaps an amplification of his soothing ideas in the NYTimes piece, "Our distinctiveness is we connect the world better than anyone else. We have a great capability of building a business around that. And we are in the process of building a culture around that."
But then again that's a load of claptrap that James Kwak of the Baseline Scenario called "worrisome," and he's right. It reminds me of Pandit's meaningless and frustrating responses last year, I think it was, when he was interviewed on Charlie Rose.
"What Citigroup needs is a strategy," Kwak says. Indeed. And, Mr. Pandit, when you come up with one, don't be shy about shouting it out.