Opening Bell: 11.24.08


Citi Gets Guarantees On $306B In Assets (Bloomberg)
This marks Citi as the one of the (if not the) single largest corporate recipient of federal aid in US history, with $45B ($25B first round, $20B second) in pure injections and a tiered backstop of $306B. Highlights: Pandit stays, Cuomo gets his platform for salary caps, it's the standard preferred purchase on the $20B.
The big question going forward is going to be one of sustained solvency; whether you're on the side that says Pandit inherited this mess or the side that says he caused it (or at least is responsible for the magnitude of it) you have to admit that this is a hole of incalculable proportions.
Per Infectious Greed the tiers on the $306B look like this:
Citi will carve out $300-billion in troubled assets, which will remain on its balance sheet
* The first $37-$40-billion in losses on those assets will go to Citi
* The next $5-billion in losses will hit Treasury
* The next $10-billion in losses will go to the FDIC
* Any more losses will go to the Fed
Also: the FEDs summary of terms. [FED via IG]
Blackstone Trims Asia Fund (Reuters)
The target size for the new Blackstone fund was drawn back to $200MM from $1B, because of a new trend in finance called "mass redemptions" - it turns out people want their money back when they see shit is going south. Everyone has balls on the upside, but it takes a special kind of brass to hold the downside, people.
"The "event-driven" Blackstone fund is headed by Aaron Nieman, who joined from S.A.C. Capital Management LLC earlier this year, the paper said."
Futures Are Up (Bloomberg)
We're seeing strength in the futures, as peer effect and socialism breathe optimism into overnight trading.
RBS Exec Apologizes For Losses (BBC)
"Royal Bank of Scotland (RBS) chairman, Sir Tom McKillop, has said he is "profoundly sorry" for the bank's financial difficulties."
After seeing its first yearly loss in 300 years, RBS is considering picking up Vickram Pandit - the move would apparently help cement the chances that RBS qualified for US Government assistance - and maybe even in the 100's of Billions of Dollars range.
Fed Pledges Top $7.4 Trillion to Ease Frozen Credit (Bloomberg)
As the headline intimates, Bloomberg ha the amount of money injected into the system at $7.4T - though only a portion of that is a direct infusion of capital. While the methods Bloomberg uses to calculate the $7.4T number aren't spelled out - what I'm absolutely positive of is that if the flyover kids get wind of this, and can figure out what a trillion dollars is, there's going to be a lot of complaining.
UBS Patrons Come Forward In Tax Scheme (WSJ)
Under the voluntary disclosure program the IRS let's you come forward, admit you tried to screw them, and pay our taxes and penalties - all without jail time. This, in my opinion is about as just as things can get - we try to screw them, they try to screw us - in the middle we find some kind of agreement.
What's amusing about this whole ordeal is the sheer volume of the numbers involved: one bank facilitated 20,000 US citizens in tax evasion. As far as conspiracies to defraud go: that's absolutely, phenomenally massive.

--William Richards