Normally taking extra risk onto a bank balance sheet and getting a debt downgrade would not be considered good news. Citigroup (C) brought $49 billion of SIV debt in-house and, for unrelated reasons Moody’s cut its rating for Citi.
Goldman Sachs thinks that the moves make Citi bonds a good investment. In other words, things are better than they appear, and the debt will outperform similar investment.
According to Reuters: "Goldman said it believes the newly appointed Chief Executive Vikram Pandit will take appropriate action to raise capital levels in the first quarter either through additional third-party investments, dividend cuts or reduced risk-weighted assets."
Goldman and Moody’s can’t both be right.
Douglas A. McIntyre
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
