Pressure intensified on Citigroup to sell part or all of itself as its stock fell below $4 a share on Friday and fears escalated about future loan losses.
CEO Vikram Pandit told managers earlier in the day he opposes breaking up the company, but the bank’s board of directors was meeting Friday to discuss whether to do exactly that, the Wall Street Journal reported.
What investors are worried about is that all the risky debt sitting on Citigroup’s balance sheet will eventually turn into losses as the economy worsens and the markets stay turbulent – losses that could be nearly impossible to reverse.
Investors were also fearful that the government might orchestrate a takeover of Citigroup over the weekend that could wipe out common shareholders, said Paul Miller, a Friedman Billings Ramsey banking analyst.
Wal-Mart taps new CEO, focuses overseas
Wal-Mart Stores Inc., the world’s largest retailer, unexpectedly announced Friday that its chief executive will retire in February and be replaced by the head of its international division.
The surprise change in leadership right before the crucial holiday season comes as Wal-Mart has roared back to success as people looking for bargains shop more at discounters. Still, the company faces hurdles ahead amid slowing growth in the U.S., and analysts say the decision to tap an international executive serves as a testament that the company sees its future growth overseas.
Bentonville, Ark.-based Wal-Mart said Mike Duke, 58, vice chairman of its international division, will take the reins from Lee Scott, 59, effective Feb. 1. Duke also becomes a member of the board of directors immediately.
Buffet: Automakers need new model
Billionaire investor Warren Buffett said U.S. automakers need a new business model to better compete, whether it takes bankruptcy or a government bailout to achieve.
The Berkshire Hathaway Inc. chairman and CEO is a member of President-elect Barack Obama’s transition economic advisers.
Buffett told Fox Business News that any automaker bailout package should include a business solution and be negotiated by the president, not Congress. The government should insist top executives at Ford Motor Co., General Motors Corp. and Chrysler LLC invest a significant percentage of their own net worths in the Detroit-based companies, Buffett said, ensuring both executives and taxpayers would share in any profits or losses.
He reiterated his belief that the U.S. economy will eventually recover from its current problems, but he predicted there will be more pain first.
From wire reports