Monday, January 14, 2008

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US Inc still sliding...

by Akiva at Mystical Paths

(Financial Times) Citigroup (that's Citibank and associated companies in the US, the largest bank in the world) is putting the final touches to its second big capital-raising effort in as many months, seeking up to $14bn from Chinese, Kuwaiti and public market investors...

The deal underscores the depth of the problems faced by banks that suffered heavy losses in the US subprime mortgage crisis. It would follow an injection of $7.5bn into Citigroup by the Abu Dhabi Investment Authority in late November.

“The second round is going very well, because Citi is seen as US Inc,” says the regional head of a US investment bank in the Middle East.

It's still quiet, it's still only being paid attention to in the financial papers and business sections. But you see the major US financial institutions going back again and again to raise more money, literally monthly. Serious trouble on the horizon.

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