Fire Sale

These guys have already taken a $6.5 billion hit, and are estimating additional losses of $8 billion to $11 billion. Talk about having your panties in a bunch. Bloomberg (11.27.07):

"Citigroup Inc., the biggest U.S. bank by assets, will receive a $7.5 billion cash infusion from Abu Dhabi to replenish capital after record mortgage losses wiped out almost half its market value."

Citigroup to Raise $7.5 Billion From Abu Dhabi State

It's quite the deal. For Abu Dhabi that is. "Abu Dhabi will buy securities that convert to stock and yield 11 percent a year, almost double the interest Citigroup offers bond investors, underscoring the New York-based company's need for cash."

Can't get more succinct than this: "'(c)learly, Citi has a problem with capital adequacy after the subprime crisis,' said Giyas Gokkent, head of research at National Bank of Abu Dhabi PJSC, Abu Dhabi's biggest bank by market value. 'ADIA has seen an opportunity to get cheaply into a blue-chip stock.'"

And besides, it's an offer Citigroup can't refuse.