Have we seen this movie before? It certainly sounds familiar.
Once again, the government steps in to bail out a financial institution and Mr. Market takes kindly to the idea. Initially. But then reality sets in and the process starts anew. Perhaps it’ll be a true sign of a bottom when the Feds engineer a bailout and the market tanks on the news.
But not yet. The latest installment of rescue centers on the once mighty Citigroup. Meanwhile, the stock market is soaring, as is Citi’s stock, as of mid-morning, at least.
A giant among giants, this behemoth of financial behemoths surely fits the bill as too big to fail. If such a thing exists as a financial institution that must be saved at any cost, Citigroup looks like the poster boy for this idea.
Total assets for Citigroup were a bit more than $2 trillion in September. For those who like to keep score, that’s roughly 14% of the annualized value of U.S. GDP for this year’s third quarter.