Scenes from a rapidly deteriorating economy
Looks as if Citi and Merrill need yet more foreign cash to keep the lights on:
Citigroup Inc. rose in Germany and
Japan after the Wall Street Journal reported that the biggest U.S.
bank is seeking as much as $10 billion from foreign investors as
mortgage-related losses deepen.
Merrill Lynch & Co., the largest brokerage, also is in talks
with investors and may get $3 billion to $4 billion, the Journal
said earlier today, without citing any sources. Citigroup has
already received about $7.5 billion from Abu Dhabi and Merrill
said last month that it's raising as much as $6.2 billion from
Singapore's Temasek Holdings Pte. and New York-based money
manager Davis Selected Advisors LP.
The Journal says the timing of these deals is no accident: More cash coming in might — just might — soften the blow when fourth-quarter losses are revealed next week. If you're keeping score at home, total sovereign wealth fund investment in the U.S. banking and securities sector is now $34 billion.
Meanwhile, here's the lede from an article in today's Financial Times:
United Parcel Service
plans to borrow about $10bn to buy back stock and expand through
acquisitions in its latest bid to boost a flagging share price and
shake off its image as a conservative company that valued a sterling
credit rating above growth.
Yes, because the perfect time to take on debt and overcome your fuddy-duddy image is when the economy is heading into recession and one of your essential costs of doing business — fuel — is at an all-time high.