Archived Financial Talent

Chapter 487 Citibank Crisis

Chapter 487 Citibank Crisis
Although the Morgan family's Stanley company has not much market value left due to the recent sharp drop in stock price, but for a family like the Morgan family that has existed in country M for hundreds of years, those listed companies are just the tip of the iceberg of their family wealth .

When mentioning the Morgan family, many people's first reaction is Morgan Bank and Morgan Investment Bank, because these two financial companies are well-known in the world, so many people think that the Morgan family's industry is only these two companies.

But many people don't know that the Morgan family not only has a large industry in finance, but also has a large-scale industry in other industries.

Just like in agriculture, the Morgan family was a peasant family hundreds of years ago. When they moved from Europe to the American continent, country M had not yet been established. At that time, the Morgan family used the wealth they brought in A large amount of land was purchased here.

Later, the speakers of the following generations of the Morgan family were not willing to be ordinary farmers, so with the efforts of several generations and various chances and coincidences, the Morgan family finally became a top family in the financial field.

But hundreds of years have passed, and the Morgan family has not given up their ancestral business, and they have spent a lot of money in this industry in the past ten years.

The main reason is that after the globalization of trade, the primary and secondary industries in country M began to migrate abroad soon, and the main focus of the entire country is to develop the tertiary industry.

So the Morgan family saw that a lot of land was abandoned, so they asked the people below to buy those lands. After years of acquisitions, the land owned by the Morgan family has reached a terrifying tens of thousands of hectares.

Although these lands are located in more than a dozen states in the entire country of M, none of this prevents the Morgan family from being the undisputed number one in the country in terms of agricultural strength.

When old Morgan was in power, these lands were in the hands of the elders. After all, in country M at this time, the development of agriculture was not profitable at all, and at most it was getting some subsidies from the government.

Although the old Morgan has long been displeased with the general old things of the Senate, he always eats and drinks inside the family with a very old appearance, so the old Morgan directly entrusts them with the management of the family's agricultural industry and earns a lot of money. The proceeds are treated as their pensions.

Now that old Morgan is admitted to the hospital, there is a fierce conflict between the forces of the Senate and the forces of the old Morgan, but the forces of the Senate are all weak people, and the subordinates of the old Morgan are all For a powerful capitalist, if he directly confronts the tough, it is definitely a bit like hitting a stone with an egg.

So the Council of Elders needs a sum of money to strengthen their power, but where does the money come from?After all, none of their industries are very profitable.

In the end, the elders thought that although the land under their management was not very profitable for farming, if they were sold directly, they should still be able to exchange for a large sum of money.

So they started looking for a buyer.For this buyer, you can't just find one from the intermediary. After all, they have too much land in their hands, and they can't sell it sporadically. All the land in the village was purchased.

The Morgan family is preparing for the sale of land, and Citibank is also preparing for the sale of assets.

The CEO of Citibank never imagined that he himself intended to repay the old Morgan's kindness, but made an exception and gave the other party an illegal loan, and something happened.

The sharp drop in Stanley's stock price made Citibank anxious to recover the $50 billion loan, but Stanley simply did not have so much liquidity to repay the loan.

So Citibank sold all the shares mortgaged by Stanley, but the money recovered was not enough to repay the loan.

So Citibank can only send people to Stanley Corporation to collect debts every day, but Stanley Corporation is also very straightforward. There is no money, and there are still a lot of junk bonds. If necessary, those junk bonds can be used to repay the debt.

When Citibank heard this, they couldn’t bear it. Those junk bonds are worthless in the market, and they have to pay for it in their own hands. How could they want your junk bonds.

But the Stanley company is also playing tricks directly, you don't need to forget it, anyway, if you don't have money, you can do whatever you want.

Citibank feels very troublesome about Stanley's attitude. He really wants to go directly to the court to seize Stanley's assets and force repayment, but if this is really done, Stanley will really enter bankruptcy and reorganization. It's not necessarily their turn to get the compensation.

Citibank has already investigated the situation of Stanley Corporation. In the past half a month, as the stock price of Stanley Corporation has fallen sharply, many financial investment products of this company have begun to explode, and the debt has reached tens of billions of dollars. , and according to the current stock price of this company, the market value is only 50 billion US dollars.

So Citibank began to sell some of the company's bonds and began to withdraw funds, and on the other hand, it went to the old Morgan.

The idea of ​​the CEO of Citibank is also very simple. Although Stanley is now insolvent, the Morgan family is rich. As long as the old Morgan's promise to the original is still true, then he can get back the money from the Morgan family. money.

But unfortunately, the old Morgan is still lying in the hospital and has not woken up. The CEO of Citibank looked through the glass at the old Morgan who was lying quietly on the bed with his eyes closed. He was a little suspicious now, whether old Morgan was pretending not to wake up.

But even if he suspected that old Morgan was lying on the bed and pretending to be asleep, he couldn't go in to prove it, because at this time, there were more than a dozen big men in black standing at the door of old Morgan's ward.

These people were sent by Old Morgan's subordinates and the Council of Elders. As for them standing at the door of the ward, they said they were protecting Old Morgan, but as for what they were thinking, no one knew.

The CEO of Citibank saw this situation and knew that the possibility of him getting back the loan from the old Morgan was zero. Let’s not talk about whether the old Morgan would just let it go after knowing the current situation of Stanley. The other party went bankrupt, and whether old Morgan could wake up was another matter.

The CEO of Citibank, who did not get any money, had to go back and urge his subordinates to hurry up and sell bonds to get back the funds. After all, under the current economic situation, many people want Citibank to die. If the opponent knows that Citibank has a sum of 50 billion If the bad debts of the U.S. dollar are not recovered, the opponent is likely to start to act.

Now Citibank is racing against time with them, the news will always leak out, and Citibank can only withdraw enough funds as much as possible before the news leaks out to deal with possible emergencies in the future .

Citibank's $50 billion loan to Stanley Corporation has turned into bad debts, first of all, it cannot be hidden from the company's internal board of directors.

The directors of Citibank quickly convened a board meeting, and they all chased after the CEO of Citigroup to give an explanation. The final result was that the CEO of Citibank resigned, and the board of directors elected a younger executive director to take charge thing.

However, before Citigroup could deal with this problem internally, the loan of their company was still exposed by the media, and the related news was that the CEO of Citibank resigned.

As soon as the news came out, it immediately caused a huge sensation in the financial circle.

It's not because the CEO of Citibank resigned. After all, in the past two years, many company executives have been fired, so this is no longer important news.

Everyone was surprised that Citibank was able to lend Stanley $50 billion at such a critical time. Although a large part of the money was lent out because the former CEO of Citibank violated the regulations, even so , There are still many people in the market who are worried.

On the one hand, I am worried about whether there is something wrong with Citibank’s internal system, or how the US$50 billion loan was approved in violation of the regulations. will affect the company's operations.

Although Citibank is a large bank with a market value of over [-] billion U.S. dollars, under the current market economy, even a company with a market value of [-] billion U.S. dollars is likely to become nothing in a short period of time, just like the previous AIG insurance company Similarly, it is also a company with a market value of [-] billion US dollars, but the result is not bankruptcy.

So some people began to panic. After all, their money is stored in Citibank. If there is a problem with Citibank's fund flow, what will happen to their deposits?
So many people rushed to Citibank to withdraw their deposits. As more and more people withdraw their deposits, the liquid cash in the Citibank vault soon disappeared, but there were still many depositors waiting in line outside to withdraw their money. .

Citibank had no choice but to say hello to the Federal Reserve, borrowing a large amount of cash with a large number of bonds in their hands as collateral, and finally suppressed the turmoil.

But Citibank has only solved the problems of those small customers now, and there are still many problems of large customers that have not been solved.

As a giant bank on Wall Street, in addition to handling deposits for the public, Citibank also handles private wealth management services for many big customers. Now that something like this has happened to Citibank, those big customers who put money in them are destined to have no money. There is a way to sit still.

(End of this chapter)

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