Citigroup Inc. said today it lost $5.1 billion during the first quarter as poor bets on mortgages and leveraged loans lopped billions of dollars from its investment portfolio...Write-downs related to mortgages and turmoil in the credit markets reached about $12 billion...The most recent quarterly shortfall at the nation's biggest bank by assets is not as massive as the nearly $10 billion loss it suffered in the fourth quarter of last year...Citigroup Posts $5.1 billion Loss, Washington Times, 4/18/08
As bad as this is, both for Citigroup's stockholders and employees and for New York, it's a good example of how private business handles a recession. It sells off assets that aren't helping the bottom line. It cuts costs. Its objective is to change its balance sheet from a disaster to a report indicating a future for the company. Once that's achieved, investors (not to mention depositors large and small) will begin putting money into Citigroup's financial products again. It's brutal, but it's real. They should send an emissary to Albany to meet with the Legislature's leaders and with Governor Paterson.