Re: The Economic Crisis
Posted: November 21st, 2008, 9:34 pm
Citigroup stock is now in the 3 dollar range, down 20% from yesterday. It is treacherously low right now. I don't have much faith that Citigroup might make it out of this on its own. The government would not let it fail, so it might do a Fannie Mae on it. The government would buy up the company by diluting the stock, thereby collapsing the stock price, and the shareholders would be left with virtually nothing.
The other thing that could happen is Citigroup's fire sale of its assets might keep it afloat.... or it could just merge with another company. We'll see what happens.
The rally before the closing today was said to be caused by Obama's pick for Treasury Secretary. Obama chose Timothy Geithner, current president of the Federal Reserve Bank of New York.
Gold is also up 57 dollars, now trading above the 800 dollar mark at 801.60 dollars.
The current prospect is that in the near future, the federal government will need to finance its massive spending programs by issuing more Treasury securities.
The hope is that the global market would be receptive to the massive influx of new Treasury securities. If the world doesn't seem to want to lend the US anymore money, interest rates will spiral upward and the US dollar will collapse.
Let's hope that doesn't happen. It would be highly disastrous if it did.
The other thing that could happen is Citigroup's fire sale of its assets might keep it afloat.... or it could just merge with another company. We'll see what happens.
The rally before the closing today was said to be caused by Obama's pick for Treasury Secretary. Obama chose Timothy Geithner, current president of the Federal Reserve Bank of New York.
Gold is also up 57 dollars, now trading above the 800 dollar mark at 801.60 dollars.
The current prospect is that in the near future, the federal government will need to finance its massive spending programs by issuing more Treasury securities.
The hope is that the global market would be receptive to the massive influx of new Treasury securities. If the world doesn't seem to want to lend the US anymore money, interest rates will spiral upward and the US dollar will collapse.
Let's hope that doesn't happen. It would be highly disastrous if it did.
