They are fine to continue operations as is for a few months. After that it’s not clear. They just hired McKinsey and Lazard to explore options. Asset sales, selling the company, etc are on the table.

I bought Citi in 2008, quadrupled my money in a year.

No as you said I don’t think they are going out of business. A lot of banks have the same issue so the government is going to have to intervene in some way most likely, they are figuring out what right now.

The time extension allows the situation to cool and deposits to return possibly plus the government can fully evaluate the situation across all banks. It’s not just this bank.

It has a large amount of treasury bonds paying low interest. When the mini bank run happened it was forced to borrow a few billion at higher interest rate.

The big banks deposited the bank run money back into FRC at the request of the Fed to give it four months to sort things out without having cash problems.

Everyone is on record signing on to keep this bank alive and it’s something everyone is aware of so I think they are forced to keep the bank alive to maintain bank confidence.

What will they do exactly? Unclear, maybe enough deposits will return in the best case. Maybe the government will make some AIG solution . Maybe someone will buy them with a Credit Suisse type deal.

Idk four months is a lot of time for them to figure something out.

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