Is Citigroup under "speculative attack"?
"Discuss amongst yourselves."
There is a fairly strong prima facie case.
- -I don't have an in-depth balance sheet comparison, but their own b/s doesn't seem much worse than others, including JPM.
- -Plugging another "market-driven" 20% haircut to their portfolio, or parts of their portfolio, seems pretty radical.
- -An "instantaneous" haircut seems panicy, a little ahead of the facts. Defaults on CRE are running in the low single digits (last a looked, which was a while now). Do we believe that operators are so weak financially that two quarters of negative growth are going to drive a fifth of them to bankruptcy, or will that stress build up over a longer time, maybe a year or more.
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