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
Essential Tips for Investing (Sponsored)
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
