When your child misbehaves, spanking is an appropriate punishment. When a bank misbehaves, the economy is supposed to punish it by denying it business. Citigroup is getting spanked hard:
A spanked child is supposed to learn a lesson about good behavior. If your kid told you that not only would he refuse to change his behavior but would create an invisible alter-ego upon which he could blame his bad behavior, you'd be perfectly jusitified in sending Junior to a shrink. When Citigroup engages in that kind of behavior, the market sends its stock into a tailspin:
Tough love sends a message. How about that.
After losing more than $28.5 billion in the last 15 months, including $8.29 billion in the fourth quarter, Citigroup said on Friday it would divide itself into one business focused on commercial and retail banking, and another on brokerage, retail asset management, consumer finance and troubled assets.
A spanked child is supposed to learn a lesson about good behavior. If your kid told you that not only would he refuse to change his behavior but would create an invisible alter-ego upon which he could blame his bad behavior, you'd be perfectly jusitified in sending Junior to a shrink. When Citigroup engages in that kind of behavior, the market sends its stock into a tailspin:
Citigroup Inc. shareholders aren’t buying Vikram Pandit’s attempt to salvage the bank by splitting it in two. Nor are they buying the stock.
(snip)
After initially rallying 17 percent yesterday on news of Pandit’s planned reorganization, Citigroup shares fell, closing down almost 9 percent at $3.50. At that level, it’s below the $3.77 it dropped to on Nov. 21, when the bank entered talks with officials from the U.S. Treasury Department and Federal Reserve over a second round of rescue funds.
Tough love sends a message. How about that.
