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November 5, 2007 (2:30 PM) While a bounce in beaten down Citigroup shares may or may not be in the cards over the near term, chances are that further challenges exist for the company. To be sure, write-downs today may not be enough cover mounting losses tomorrow if the U.S. housing market and credit markets remain tight. Add to this reports that the company’s accounting is under investigation by the SEC and Citigroup’s future hangs in a delicate balance. “There should be a steady trickle of ‘level 3’-related discussion arriving as companies continue to file their Qs…” Oct 17, 2007, Is Level 3 Dreaming A Nightmare In The Making? Citigroup has filed. One word: ugly. With more level 3 fears around the corner, no one has any idea when the building level 3 nightmare will end. The really scary possibility is that these assets will be allowed to linger, and linger, and linger... As per Citigroup: Level 3 – Instruments whose significant value drivers are unobservable. Why would anyone want to buy a company that can not value $134 billion in assets? Because as Citigroup’s problems mount it becomes a prime bailout candidate. |
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