Why I long Citigroup

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(just in case, you never know these days...)

1. Citigroup is a bank deemed too large to fail. Heck, it has assets larger than the GDP of most countries, with 2 trillion worth of assets (unfortunately I must add, with 2 trillion worth of liability too). With 350,000 employees scattered all over the world from Bugis to as far away as Boon Lay, I'm sure they can clobber up a decent swim team to compete in the Olympics. A disappearance of Citigroup under our radar might spell the end of the modern world as we know it.

2. Oh...and 52,000 employees have been asked, politely I'm sure, to leave. Some may say this smacks of desperation, but I prefer to see it as aggressive cost-cutting.

3. Sorry people from the manufacturing industry, the financial industry, save for porn, is more important than any other in the world. GM can go on their knees and plead for all they want, and the US government just won't budge, but the same government did not hesitate to write a blank cheque to Citigroup in the blink of an eye. Some are just more equal than others.

4. How ironic that capitalism has created a peculiar state of affairs: profits are privatised, but losses are socialised. But that's the way it is these days. I am not here to moralise on the issue, but if you can't beat them, join them.

5. Citi is not AIG. The US Govt sacked the entire AIG board of directors (BOD), but gave a vote of confidence to Citi BOD. Robert Rubin and co have some serious connections.

6. It has a mega-business model that has proven to be hugely profitable in good times. Citibank is a brand which comes with certain prestige. To borrow a cliche from sports, form is temporary, but class is permanent.

7. Mark-to Market (MTM) accounting (fair value) might be scrapped when the ruling is up for review next year. In the event of that happening, the liquidity crisis might just vanish overnight.

8. When a $5 bill can buy you a stake in one of the largest corporations in the world, and have some change left over for a $2 chicken rice, this is an early Christmas gift presented to us by the bungling duo of Irrationality and Fear.

9. Vikram Pandit and various other directors have bought massively (US$8 million of personal wealth is quite a lot, to me anyway) into Citi shares. This apparent show of confidence is reassuring.

10. History never looks like history when you are living through it. It always
looks confusing and messy, and it always feels uncomfortable. It may look shitty now, but humankind from the beginning of time has seen off so many disasters, imagined or otherwise, that I'm sure this too will pass.