Citigroup fell under $30 for the first time in five years after CNBC reported the firm could lay off up to 45,000 staffers.
Citigroup, Wall Street’s largest financial services firms, is planning its second round of large-scale layoffs in less than a year.
People with knowledge of the matter have described the pending job reductions as “massive” and “large.” The total number could reach as high as 45,000, these people estimate.
In a statement, Citigroup said: “We are engaged in a planning process in anticipation of our new CEO and our business heads are planning ways in which we can be more efficient and cost effective to position our businesses in line with economic realities. Any reports on specific numbers are not factual.”
45,000 jobs, should it come to that, is one heck of a lot of jobs. I doubt most of those employees could find jobs quickly, at the same salary, or the same benefit levels.
Nonetheless, this is just a down payment on what’s to come. Other financial institutions are sure to follow suit.
Rate Cuts Priced In
Another rate cut from the Fed is coming. It will do no more good than the last 3 did, but Bernanke will try anyway. Nothing like heading into a recession with rates already as low as 4.25 or possibly even 4.00%.
Don’t expect any mortgage relief. Rates are still higher than a year ago and that does not even factor in credit standards that have tightened significantly.
On the next cut or two I would expect 15 year fixed mortgages to finally dip below what they were a year ago, and for 30 year rates to be about what they were a year ago. That is not much relief to cash strapped consumers.
Mike Shedlock / Mish
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