During the end of last weekend, Citigroup reported another quarter loss of around $8 billion. This brings the total to around $26 billion for 5 quarters since the start of sub prime mortgage crisis. $26 billion is enough to wipe up the whole of Maybank! The result seems to suggest that bottom is still far away. Citigroup is forced to split its business into 2 groups. Citicorp would house the stable and profitable banking business like commercial, investment banking and credit card. Citi would host bad business like loans. This event is significant as it herald the end of the bank holding group era with this development. It looks like Citigroup has to scale down its financial supermarket business to one that fits 7-11 store to survive. I have always maintained that except for the “toxic asset” they held in their balance sheet, its banking business has been profitable. In regards to toxic asset, the US government has agreed to guarantee 90% of the value while Citi will foot the rest. The US government is a major shareholder when it bought $45 billion worth of preference stocks at 10% fixed dividend with an option to convert. The downside is dividend is restricted to 1 cent every quarter for the next 3 years. The last closing price is $3.50 and it has gone down as low a dollar in 1990 during a mild recession. If it does again, I will make my move to swoop the undervalue stocks. Of course I know that Citigroup purchase is risky but I am reminded also on the day Alexender the Great, Napoleon and Hannibal snatched victory from the jaws of defeat at a critical decision decision. I believe now is the time. I am using Citigroup performance as a barometer for economic recovery.
On the political front, BN has lost again. It lost by more than 2000 votes despite spending $250 million for a month’s week campaign. It will badly reflect on Najib, who now has lost 2 consecutive defeats. According to MCA, the Chinese in KT has given solid support to BN with increase in votes. Had they switch, the margin of victory could have been bigger. This is the sentiment you got days before the polling day, as Chinese packed opposition dinner to hear speeches. It looks like it did not translate into votes because the Chinese are “kiasi” and being practical lot. I don’t think Hudud has got anything to do with it. Hudud is not an issue in this by election. The Chinese voted BN because of promises of handouts and threats. Let’s see whether BN will keep its promises. After all, 2012 is only three years from now. At this current sentiment, it is not advisable for BN to antagonize the rakyat again.
On the political front, BN has lost again. It lost by more than 2000 votes despite spending $250 million for a month’s week campaign. It will badly reflect on Najib, who now has lost 2 consecutive defeats. According to MCA, the Chinese in KT has given solid support to BN with increase in votes. Had they switch, the margin of victory could have been bigger. This is the sentiment you got days before the polling day, as Chinese packed opposition dinner to hear speeches. It looks like it did not translate into votes because the Chinese are “kiasi” and being practical lot. I don’t think Hudud has got anything to do with it. Hudud is not an issue in this by election. The Chinese voted BN because of promises of handouts and threats. Let’s see whether BN will keep its promises. After all, 2012 is only three years from now. At this current sentiment, it is not advisable for BN to antagonize the rakyat again.
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