Citi ATM Fees Can Buy You 1.6 Common Shares

Posted by urbandigs

Fri Feb 20th, 2009 02:09 PM

A: Hat Tip to Johnny for pointing out. Quite a statistic huh? With Citibank charging $3 for ATM fees at their E 86th / Lexington branch, I could have purchase 1.6 shares of the glamorous Citigroup common stock instead - although I think the end result would be the same. Quite telling isn't it. Citigroup common stock is trading as if the company will be nationalized, and is basically a call option right now. At $1.90/share, the fee they charged me to take my money out of their amazing, technically superior ATM machine, could have been spent purchasing 1.6 shares of the common stock!

citi-atm.jpg

Just do it already! The market knows it already. Do it while its almost fully priced in, lets open up limit down on Monday, take the global selloff medicine, get it past us, and move on! Don't do it half-way! Destroy the common and preferred, and give a haircut to bondholders. Get rid of management, selloff/writedown bad assets, restructure, and lets move on! Hurt those who took risks on their investments.

Barry Ritholtz has a LIST showing those in favor of nationalization.

The problem is I'm not sure you can just do one, without dragging down the remaining 3 big boys (Bank of America, Wells, and JP Morgan). So, what makes this so complicated is what do they do with all four and the consequences of a credit event on CDS counterparties exposed to those holding insurance on these guys. How will market react? Will it destroy the system or be a Black Monday that we can recover from? Will it cause runs on other banks?

I feel like we are all waiting for this to just happen already!


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