It’s difficult to imagine a world without Citigroup (Citibank, Citi Cards, Citi Mortgage, Primerica, etc.), but with their stock closing down another 26.41% today, to close at $4.71 (C), it’s also difficult, in these troubled financial times, to imagine a scenario that allows Citigroup to continue operations going in the direction that they are.  Once the largest bank in the United States, Citigroup’s assets and market value have fallen over 65% in November alone.  As if that isn’t bad enough, the word on the street is that government intervention or outside investment may be necessary for their survival – which is basically the kiss of death in this market.

The biggest problem here today is that Citigroup has both a liquidity and solvency issue.  Thy’re working to calm their investors, but the market is already so shell-shocked from the other failures to date that these reassurances are falling on deaf ears.  In retrospect, it’s easy to see how big a blow losing the bid for Wachovia was and following that with an announcement announcing the elimaination of 52,000 jobs worldwide compounded the problem from a public relations standpoint.

Shoring Up the Economy

Experts are predicting that there will be somewhere between 3 and 5 million foreclosures next year alone. These figures amount to somewhere between 8,000 and 14,000 people evicted from their home every day. This is obviously not a small problem and with the continued acceleration of foreclosures it is very unlikely that it’s going to get better any time soon.  Something has to be done; the situation has gone from bad to worse and the world economy is now free-falling into a global recession unlike anything imagined before.

I’ve already expressed that Henry Paulsen is not able to help the economy and I believe that time will show he prolonged and worsened the problems that he/Goldman Sachs helped create.  I’m hopeful about Barack Obama coming into office because I believe that the world needs change and hope to empower the average citizen to help with improving the economy – to help the consumer believe.  Unfortunately, I don’t think that Barack Obama will be enough and that’s where I believe the United States (and the world as an extension of the US) needs a bailout/stimulus plan that helps stabilize the markets while simultaneously improving consumer confidence.  Some components should include: