Citigroup's good news for Wall Street
Citigroup CEO Vikram Pandit boosted Wall Street morale with a memo to employees noting the company was operating at a profit. Bill Radke talks to Cassandra Toroian of Bell Rock Capital about potential problem areas not covered in the note.
Citigroup CEO Vikram Pandit (Saul Loeb/AFP/Getty Images)
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TEXT OF INTERVIEW
Bill Radke: Part of Wall Street's morale boost comes from a morale-boosting memo made public today. Citigroup CEO Vikram Pandit wrote to his employees that the company's been operating at a profit through the first two months of the year. As I said, Citigroup stock up 25 percent or so this morning.
Cassandra Toroian is president of Bell Rock Capital. Cassandra, what Pandit did not talk about was potential problem areas like credit losses and write-downs. So how do we evaluate this little note?
Cassandra Toroian: Well, I mean I think that he's got to do his job, which is to rally his own troops. Look, people have to do their own independent evaluation of what Citigroup stock should be trading at. What I don't see in the note is him saying that everyone should go run out and buy their stock. He's just trying to say that the stock price may not reflect what is going on operationally at the company. But I'm not sure that the stock price will ever reflect that as long as they've got the government in there as such a large investor.
Radke: So Cassandra, what are you going to be looking for in the coming weeks and months from Citigroup?
Toroian: Well, we'd like to see more divestitures. You know, part of what he was brought there to do over a year ago at this point was to divest of businesses, and I haven't seen that there's been really enough of that yet.
Radke: The Wall Street Journal is reporting this morning that the Feds are drawing up contingency plans in case they have to bail out Citigroup again. What does that tell you, if anything?
Toroian: I don't think it tells us anything is imminent. I think they're trying to be a little bit proactive so that there's some process in place. I mean I think that's actually a good thing. You know, we're having an overall crisis with our entire financial system, it would be nice to have processes in place and not wait til the last minute for everything.
Radke: Cassandra Toroian of Bell Rock Capital. Thank you.
Toroian: Thank you.
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From miami beach, FL, 03/10/2009
Image is big in USA and many parts of world.While CEO Vikram delivered a written email and gives the reader the chore of creating their own image of the financial health Citi he does offer a glimmer hope for the future.Maybe its a reflection of the Obama administration trying to correct the wrongs of a previous administration.
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