Citibank, once considered the largest financial institution in the .jpg)
world, is now a penny stock. The New York based company hit its low stock price of $0.97 before noon on Thursday and as late as 3:44 PM was a $1.00 before closing at $1.02.
world, is now a penny stock. The New York based company hit its low stock price of $0.97 before noon on Thursday and as late as 3:44 PM was a $1.00 before closing at $1.02.Citi, which employs over 300,000 people, has lost 98% of its value in the last two years. On January 5, 2007 Citi closed at $54.77. This type of fall has investors and the government concerned.
Other financials have also taken a hit as Bank of America is nearing the $1 mark as they closed at $3.17. Bank of America acquisition of Countrywide certainly puts them in a peculiar position due to the heavy loan portfolio. JP Morgan has been fighting the fall like the Bank of America and Citi, but they have dipped to $16.60 and have fallen 57.15% in the last year.
What happens next?
Well, we know the government is not going to let these banks fail. But, the real winners are going to be community banks.
Community banks are now eligible for money through different programs such as the Capital Purchase Program however, as seen in this article, bank presidents have a difficult decision to make due to public perception.
If the community bank accepts any of the funds then public views it as a sign of financial weakness for the bank.
So, what to do with your dollar including your checking, savings and certificates of deposit?
As a free market fanatic, I am looking to put my dollar in the community banks or credit unions as they, more than likely, will not have the government telling them what rates to pay or how to lend. Thus, you are able to work with a banker who has a heart and can make decisions for the will better your finances overtime.
Comments
Wow! Great article. Oh how the mighty have fallen. It's gonna be a slow burn before these guys rebound.
DA:
Thanks for the comments and compliments. Slow isn't a bad thing...personal finance is a marathon not a sprint.
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