Citigroup Stops Withdrawals from Hedge Fund

Citigroup Stops Withdrawals from Hedge Fund

www.cnbc.com

Citigroup has barred investors in its CSO Partners hedge fund from withdrawing their money, according to a Wall Street Journal report on Friday.

(visit the link for the full news article)

Well lowering the limit people can withdraw from accounts, laying off thousands, and not letting people withdraw from investments usually a pretty good sign that this company is near the end and trying to save their butts. If this doesnt show you how bad the economy is I dont know what will.

www.cnbc.com
(visit the link for the full news article)

Ouch. I was hoping that I would open up this thread and it would be a bad Joke that you and I could have had a chuckle about before and slapped with a point deduction for posting such nonsense. Alas, there will be no slapping from me on this day I tell you.

Yeah I have to agree with you, This certainly doesn't paint a positive picture. It's not the end of the world but it ain't pretty.

reply to post by mybigunit


They are not longer a solely base American financial institution, I wonder who are the ones trying to get their money out, after all they got infussions from the Arabs recently.

So as our our economy is falling the major finacial institutions in this nation has been open for sale, they can now been influenced and policies can be dictated by the parties involved.

So somebody doesn't want to lose the money invested in the bail out, so suffer the littler people.

Yeah the fund has lost 11% and people want out....sounds reasonable to me to be able to get your money back minus your losses. This will be downplayed in the media but this is HUGE!

reply to post by mybigunit


Exactly this is HUGE, taking into consideration the downgrade of the AAA rating yesterday and the congress hearing on the state of the economy That prompted the markets to go into negative Numbers.

Yesterday the biggest news was not given, that the major financial institutions were having negative numbers due to more loses in the second round of mortgage write outs woes.

Today may be a very interesting day indeed.

whats the legality of them stopping people taking there money back?

Its not legal as far as I know.

Originally posted by mybigunit
Its not legal as far as I know.

I'm sure there is fine print in the contractional language that allows for this.

I am sure this will all work out fine, just like it did a few years ago when ENRON had similar issue with allowing investors to liquidate assets...

Well, I mean fine for the few insiders who saw this coming and have been dropping out of Citigroup stock

...and probably will work out pretty sweet for the institutional banking underwriters who dumped a few billion to keep things a float long enough to get their buddies out,...the banks will get their money back in deferred tax write offs

Now the taxpayers and 401k investors may not fair as well !

oh yeah and this is all completely legal thanks to good ole FDR who revised all the banking laws to protect us from another bank run driven depression

So, the new improved depression will have be driven by personal debt and deflation

China is kind of screwed too, because who is gonna buy all there cheap goods
now! The are stuck holding a lot of bad American debt...suckers !

reply to post by marg6043


In another thread I was called a bad financial advisor for telling clients to put money in CD's, Savings, Annuities. (note, most of my clients are retired)

Well, this morning checking out our companies Mutual Funds, where many retired folks keep their pension and savings, they where down 12-20% in the past 3 months.

A friend of mine has his 401(k) in a "safe" market that is supposed to have smaller risks... the majority of the stocks in the fund where Freddie Mae, Freddie Mac, Citi Group, Country Wide, Bank of America, and Watchovia.

Needless to say.. his "secure" low risk 401(k) is down over 20% in the past few months.

The financial system is supposed to be sound.. at least, thats what we expect.. so when they have problems, we have problems. Greenspan today said there is a "high" risk of a recession.. putting it between 50-60%. Contradicting Bush and Burnake (sp) who say the economy faces no risk of recession.

Originally posted by NWRHINO
I am sure this will all work out fine, just like it did a few years ago when ENRON had similar issue with allowing investors to liquidate assets...

Well, I mean fine for the few insiders who saw this coming and have been dropping out of Citigroup stock

...and probably will work out pretty sweet for the institutional banking underwriters who dumped a few billion to keep things a float long enough to get their buddies out,...the banks will get their money back in deferred tax write offs

Now the taxpayers and 401k investors may not fair as well !

Excuse me, but I don't remember Enron working out to be "just fine." What I do remeber is that Enron caused thousands to lose their pension money and it had a real negative effect on electricty access for California...I don't call that "just fine!"
Anyone remember the British bank that refuse to let people withdraw fund a few months ago? How did that work out.....

In any event this is a big Big problem!

[edit on 15-2-2008 by realmatrix]

So what happens if Citigroup goes bottom up? Does that mean the balance on my Citibank credit card just goes away? The whole system is a scam and would be cool to not have to pay back the scammers.

reply to post by Rockpuck


I remember on the same thread that I said my husband lost money last month.

I am afraid to see this month turn around.

I knew this was coming and today the first social security was filed by the baby boomers, this year the numbers will be growing.

Is no going to be pretty at least my husband and I have 15 years more to recuperate.

Originally posted by Rockpuck
reply to post by marg6043

 

The financial system is supposed to be sound.. at least, thats what we expect.. so when they have problems, we have problems. Greenspan today said there is a "high" risk of a recession.. putting it between 50-60%. Contradicting Bush and Burnake (sp) who say the economy faces no risk of recession.

Im shorting, Ive been shorting, and Im going to continue to short (except for the brief time a week ago I went long but overall Im short.

People this situation we are in is huge the media as much as they are making us aware overall they are downplaying how bad it is. This is why I dont do 401ks I invest all my money myself. Overall Im short till at least end of 2bd quarter this year. At that point Im sure we will have some sort of relief rally but it wont last. This problem will not be fixed this year or next because there are to many underlying problems that the government doesnt want to admit let alone fix IE wages going no where, jobs being shipped over seas, prices of everything skyrocketing, no one have a savings, etc etc etc

The numbers for in inflation were higher this month also, something that was unexpected by many people as the economy is slow right now in people confident spending.

But I already said in another thread that as Bush deceiving stimulus package is going out so the prices will increase to get the best out of those give away checks.

Inflation is going to increase steadily because the checks, and I see a problem here, it will not go down after the money is spend.

That is my prediction.

[edit on 15-2-2008 by marg6043]

Originally posted by marg6043
The numbers for in inflation were higher this month also, something that was unexpected by many people as the economy is slow right now in people confident spending.

But I already said in another thread that as Bush deceiving stimulus package is going out so the prices will increase to get the best our of those give away checks.

Inflation is going to increase steadily because he checks, and I see a problem here, it will not go down after the money is spend.

That is my predictions.

Oh inflation is only going to get worse because we keep spending money we dont have and lowering rates and printing money. Im not surprised at all even considering that the economy is slowing. We are heading for something that will make the early 90s look like a cake walk.

I mean Citigroup our largest bank is on the verge of bankruptcy and Im sure there are other large conglomerates right behind them. This is bad.

This is bad for the folks invested in the hedge fund but it isnt a harbinger of doom type situation unless you invested in the fund.

I have a client who runs two hedge funds and he was forced to do this for one of his funds as well.

What happens in this situation is rather simple. Fund buys stocks, bonds etc. They go down and investors want to cash out and avoid bigger losses. If the fund doesn't have enough cash on hand to pay the investors, they sell securities to get the money for their investors. When a fund sells a large number of shares in any company, the stock is likely to drop. Stock drops, fund shows bigger loss. More investors want their money and the fund has to go back and sell more creating an ugly downward spiral.

If the fund says no more withdrawals, they avoid driving the price of their investments down even more.

It sucks for the investors. It does, however, help to keep the companies the fund is investing in from seeing their stock price drop even further.

It does not indicate that Citigroup is going under. It should also be noted that Citigroup might not even have much of a stake in the fund, other than to receive their 2 and 20 or whatever their fee structure is,

Originally posted by Crakeur
This is bad for the folks invested in the hedge fund but it isnt a harbinger of doom type situation unless you invested in the fund.

I have a client who runs two hedge funds and he was forced to do this for one of his funds as well.

What happens in this situation is rather simple. Fund buys stocks, bonds etc. They go down and investors want to cash out and avoid bigger losses. If the fund doesn't have enough cash on hand to pay the investors, they sell securities to get the money for their investors. When a fund sells a large number of shares in any company, the stock is likely to drop. Stock drops, fund shows bigger loss. More investors want their money and the fund has to go back and sell more creating an ugly downward spiral.

If the fund says no more withdrawals, they avoid driving the price of their investments down even more.

It sucks for the investors. It does, however, help to keep the companies the fund is investing in from seeing their stock price drop even further.

It does not indicate that Citigroup is going under. It should also be noted that Citigroup might not even have much of a stake in the fund, other than to receive their 2 and 20 or whatever their fee structure is,

Crakeur you combine that with the fact that they are limiting the dollar amounts people can withdraw from accounts plus the lack of funding they have its adding up to doo doo.

This is the fundamental problem with our banking system today. Then lend, spend, and invest money they do not have. Its a small part to a much bigger problem. So when the common investor goes to get his money back its not there.

Its funny cause this all seems like its happened before....hmmmm...oh yeah the great depression. Its funny how a certain few were able to get there assets out before the tank and when the common man went to get his money there was nothing left.