Citigroup worries mount, shares tumble 23 percent

NEW YORK (Reuters) - Citigroup Inc faced growing uncertainty on Wednesday about whether it will rebound from punishing losses, as investors drove the stock below $5, its lowest level since a government rescue in November.

More bad news is expected on Friday, when the bank plans to report quarterly results, six days ahead of schedule, and analysts are looking for a fifth straight multibillion-dollar loss. The bank is also widely expected Friday to provide details of a comprehensive downsizing designed to ensure its survival.

Rival JPMorgan Chase & Co also moved up its earnings report by six days to Thursday.

Once the world's largest bank, but now No. 3 in just the United States, Citigroup is expected to shrink by about one-third as it focuses on corporate, investment and retail banking and trims trading operations, a person familiar with the plan said.

Citigroup will also put unwanted businesses and assets into a separate structure, with an eye toward their eventual sale, the source said.

The U.S. Treasury Department has pumped $45 billion of taxpayer funds from the Troubled Asset Relief Program, including $20 billion on November 23, when the government agreed to a bailout, sharing in bank losses in exchange for preferred stock and warrants.

The bailout helped avoid a collapse on the heels of the Lehman Brothers Holdings Inc's bankruptcy on September 15.

"I really don't know how the unraveling finishes," said Henry Asher, president of Northstar Group Inc in New York. "It looks like the government is forcing a controlled descent, without going the full monty as it did with Lehman."

In a memo to employees, Chief Executive Vikram Pandit said the bank is ready to release earnings on Friday, with "no need to wait" another six days.

Pandit, who turned 52 on Wednesday, also said while Citigroup's goals include a streamlining of operations and strengthening of its balance sheet, "We are and will remain a bank." He said the bank faces a "long-term transformation."

Shareholders have shown little patience. Citigroup shares fell $1.37, or 23.2 percent, to $4.53 Wednesday as trading volume topped 510 million shares.

Other bank stocks also declined, including larger rivals Bank of America Corp and JPMorgan, which fell 4.2 percent and 1.7 percent, respectively. The 24-member KBW Bank Index .BKX slid 6 percent and touched a 13-year low.

PANDIT'S ABOUT-FACE

Getting rid of major assets marks an about-face for Pandit, who wanted to shrink the bank while keeping large parts of the "financial supermarket" model promoted by Sanford "Sandy" Weill, who created Citigroup in a 1998 merger.

On Tuesday, Citigroup said it will combine its Smith Barney brokerage and other units with Morgan Stanley's wealth management unit. Morgan Stanley will pay $2.7 billion and take a 51 percent stake in the joint venture, and can buy the rest after five years.

While the transaction will bolster Citigroup's balance sheet and result in a $5.8 billion gain, the decline in the stock resembled the downdraft on November 17-21, the week before Citigroup got the second TARP infusion. Shares fell 60.4 percent that week.

"We continue to be concerned that weakness in Citigroup's share price may lead to lack of customer (or government) confidence," Barclays Capital analyst Jason Goldberg wrote on Wednesday.

There has been a drumbeat of analysts' questions about whether regulators or Citigroup directors and executives will give Pandit time to finish the job.

"Regulators are concerned about the quality of the management that got us where we are in the banking industry," said Nancy Bush, an independent banking analyst and managing member of NAB Research LLC. "At Citigroup, the government has far more influence than on any other bank in the industry, and that's why there may be more force to bear there."

WHERE ARE THE BUYERS?

Pandit became CEO in December 2007, inheriting many problems from predecessor Charles Prince.

The bank has reported $20.3 billion in net losses, and taken more than $64 billion in credit losses and writedowns since Pandit took over.

Critics have said Pandit, known from his days as a top Morgan Stanley executive as a brilliant but cautious leader, was not aggressive enough in tackling the morass that Citigroup's $2 trillion-plus balance sheet had become.

Citigroup's ability to spin off assets may be limited. "We question where the buyers will come from, since few are both large enough and strong enough," wrote David Trone, an analyst at Fox-Pitt Kelton Cochran Caronia Waller. He rated Citigroup shares as "in line."

Ten analysts who issued estimates over the last week look for a fourth-quarter loss of 94 cents per share, on average, according to Reuters Estimates.

The annual cost of protecting $10 million of Citigroup debt against default for five years rose to $410,000 on Wednesday from $265,000 Tuesday, according to Phoenix Partners Group.


 

The conditions in Afghanistan under the Taliban rule — for Americans, allies, Christians, women and more — continue to deteriorate, and the people there continue to plead that we will not forget them. On the radio program Monday, Glenn Beck gave an emotional update on current evacuation efforts, including the tragic story of one girl — an American passport holder — who was not rescued in time.

"I have a pit in my stomach like I haven't had in a while. What is happening in Afghanistan is both miraculous and horrendous," Glenn began. "What's going on right now one of the most amazing things I've ever personally witnessed — the evacuation of Americans, those [Afghans] who helped us, Christians that are dying, women that are under incredible conditions. I see things that I can't show you. I see the pleadings from people who are in safe houses, 'Please, don't forget us.' I see what they're being sent by the Taliban.

"If I die today, my entire life will have been worth it for what you have helped get done, in just the last three weeks. You have saved well over 5,000 people," he continued.

Fighting back tears, Glenn added, "I ask that you pray for those in the Middle East, that are in the midst of doing work, that a Moses-style miracle will happen. ... There are several people that are in dire need of medical care. Friday, we told you — along with the congressman from Oklahoma [Rep. Markwayne Mullin] who had just returned — [about] a father and two daughters that were blue passport Americans, and a mother who had a permanent residence, a Green Card. The daughter was very ill. And they thought, that if we couldn't get her out of there, that she would lose her legs. I got a call on Saturday morning, that we were too late, that she didn't lose her legs. She lost her life, waiting. There are now two Americans, instead of three."

Glenn showered his audience with gratitude, repeating that "well over 5000" lives have already been saved because of their incredible generosity, but lamented that there are still thousands more people yet to be saved.

Watch the video clip below to hear more updates from Glenn:

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To donate to these rescue efforts, visit NazareneFund.org or MercuryOne.org.

Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

Megyn Kelly pulled her sons out of the private elementary school they attended after she learned that the boys were asked "weekly" if they were still sure they were boys. But that's not all that this "experimental transgender education program" taught.

Megyn joined Glenn Beck on the radio program to tell the story, which she thought had ended when the school apologized, and to talk about what's next for America as our leaders refuse to promote actual psychological support for our kids and instead "parade" transgenderism as the solution to their problems.

"When [my son] was in third grade, I found out they unleashed a three-week experimental transgender education program on these boys, with really inappropriate videos. The kids were confused. These are 8- and 9-year-olds, Glenn. They have no idea what the school is even talking about with the trans thing. They got really in-depth, with really in-your-face videos — and then parents complained. And the school did something it hasn't done in its 400-year history, which was they apologized. Even they realized they had done wrong," Megyn explained.

"But, then I said to my son a year later, so did they ever round back to the trans thing? Like, whatever happened with it? And he said ... they bring it up every week. ... [They ask] how many people here still feel confident that they're a boy? Do you still feel sure you're a boy?" she continued. "This is not support. This is not nonbullying. This is indoctrination. And it's deeply confusing to the children, and wrong."

Megyn went on to give examples of how she's seen trans ideology turn "support, nonbullying, kindness, friendship, allyship, on its head."

"The absolute surrender of the medical community to this insanity is a scourge on this nation. It's disgusting what is happening with our doctors," she added. "There are people who are legitimately transgender, or who have gender dysphoria. And for those people, we should be supportive and they should get the care that they need. But what we've done instead, is taken everyone who expresses any kind of gender confusion and said, you're trans. You're trans. And we have our psychiatrists doing this."

"It's crazy," Megyn asserted. "The fact that we're doing this so willy-nilly in the name of allyship and support, it's abusive. It's criminal."

Watch the video clip below to catch more of the conversation:

Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution, and live the American dream.

"Never forget" is not only a tribute to those we've lost, it's a warning that it could happen AGAIN. On "Glenn TV" Wednesday, Glenn Beck looks back 20 years ago to the modern generation's Pearl Harbor moment. A day of infamy we're STILL feeling repercussions from.

But in remembering 9/11, we need to look toward the future because the Biden administration is setting us up for the NEXT 9/11. They bungled the Afghanistan withdrawal, and now we have video of top al Qaeda commanders — who served with Osama bin Laden — returning to the country. But could America survive another terror attack?

Glenn asks former NYC Mayor Rudy Giuliani, the leader who brought America back from the brink. He tells Glenn about the moment he learned the Twin Towers were struck, the actions he took to prevent more terrorism, and if he thinks NYC could survive another attack under Mayor de Blasio's leadership.

Glenn is also joined by Rev. Johnnie Moore, author of "The Next Jihad." He warns that Biden's policies in the Middle East are Obama 2.0, and "if you thought ISIS was bad, you haven't seen anything yet. We must keep our eyes on Iran."

Watch the full episode of "Glenn TV" below:


Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.