The Great Unwind has begun, Citigroup warns

[SlowDownFast]

The Great Unwind has begun, Citigroup warns
Avoid leveraged companies, countries and consumers, bank's strategists say
By Alistair Barr, MarketWatch
Last update: 9:51 p.m. EDT March 19, 2008

AN FRANCISCO (MarketWatch) -- The Great Unwind has begun, Citigroup Inc. strategists warned on Wednesday.

As markets and economies de-leverage across the globe, investors should avoid companies and countries that have grown to rely too much on borrowed money, they said.

That means favoring public-equity markets over hedge funds, private-equity and real estate, while leaning toward emerging market countries and away from developed nations like the U.S., the bank's global equity strategy team advised.

Within equity markets, the financial-services should be avoided because it's still over-leveraged, while other companies have stronger balance sheets, the strategists said.

"Steady growth, low inflation and rock-bottom interest rates encouraged economic and financial participants across the world economy to gear up over the past few years," Robert Buckland and his colleagues on Citi's global strategy team wrote in a note to clients. "Easy money encouraged many to buy a bigger house, a bigger car or a bigger speculative position."

"But now, any behavior that relied upon continued access to easy money is being dramatically reassessed," they added. "Leveraged banks must lend less, leveraged consumers must consume less, leveraged companies must acquire or invest less, and leveraged speculators must speculate less."

read more:http://www.marketwatch.com/news/story/great-unwind-has-started-avoid/story.aspx?guid=%7B1DC25DFD%2D3543%2D4CF4%2DBE26%2D74EA4B9C9330%7D&dist=hplatest

AKA, avoid everyone in the financial space, especially Citigroup...

:rofl::banghead::rofl::banghead:

[marmar]

1. The fan is gonna hit the sh*t.....

And Citigroup, the model of stability that they are, has a lot of f**king nerve.

[SlowDownFast]

3. Hilarious article.

Basically, they are telling us to GET THE HELL OUT NOW! That and they just told America they've got a good percentage of their company off shore.

They're probably short everything in the phone book, doubly so on their own stock.

They just lit the fuse............

[Hannah Bell]

6. Not only Citibank.

Top tier corps have dropped 2 million jobs in the US over the last few years.

[Fovea]

2. Citicorp one day after

the big micro bubble and subsequent brutal profit taking of today...

So long, and thanks for all the fish.

[JDPriestly]

4. Citibank's Arab ties

Its single largest shareholder is Prince Al-Waleed bin Talal of Saudi Arabia, who has a 4.4% stake.<2>

. . . .
* Chuck Prince — Ex-Chairman and CEO, Citigroup
* Shaukat Aziz — Former Executive Vice President & Head of Global Private Banking Division of Citibank, former Prime Minister of Pakistan
* Alwaleed bin Talal — Major Shareholder.

http://en.wikipedia.org/wiki/Citibank

Here is more on Citibank. They are admonishing consumers, but rewarding loser executives.

Although Mr Prince's payday is a bonanza by most standards, it still falls far short of the $161 million collected by his investment banking rival Stan O'Neal at Merrill Lynch.

Both men were "retired" from their positions in the wake of multi-billion dollar losses against their exposure to the sub-prime mortgage markets and related turmoil in the credit markets.

Citi has already taken a $6 billion hit and estimated a further $8 billion to $11 billion could follow. Merrill wrote down $7.9 billion but said last night that its exposure had reached $27.2 billion.

Mr Prince received total compensation last year of around $25 million. Mr O'Neal, Wall Street's second-highest paid banker, collected a package worth about $48 million.

. . . .

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2839285.ece

(Read the comments under this London Times article -- very to the point)

Here is Charles Prince's bio:

http://investing.businessweek.com/businessweek/research/stocks/people/person.asp?personId=391733&symbol=C

[xchrom]

5. in other words put your money in china or india...

:eyes:

[Angela Shelley]

7. Once again, too funny!

"investors should avoid companies and countries that have grown to rely too much on borrowed money" ...

Who could they be talking about?

... too funny! :-)

[formercia]

8. I guess the rumor was correct

The boys are moving money to India.

Plenty of cheap labor, a big military and Nukes. Everything they need.

Sure, now that they are already set up there and waiting for the suckers to arrive.