Thursday, June 25, 2009
Yves Smith on "C"
Yves Smith (YS) has a 5 June 2009 post at her Naked Capitalism citing a WSJ piece about Citigroup and Sheila Bair's recent comments about it. I have believed "C" insolvent for at least two years, the Fed's recent "stress test" results notwithstanding. Here's a link: http://www.nakedcapitalism.com/2009/06/fdic-keen-tto-ciits-rating-change.html.
YS writes, "inquiring minds wonder whether the Journal has been spun a tad, since the piece also make clear that the bank believes Bair is overreaching. ... The reason I have some sympathy for the FDIC is that the US has violated the best practices playbook for dealing with troubled banks. ... [T[he article spends even more time on the turf war charge, which makes it sound as if the FDIC is significantly, if not primarily motivated by the desire to make a land grab". I got this sense of the story too. Here are some of my prior comments about "C" 24 June, 7 and 17 July 2008, 7 January 2009: