Insurance Indeed

Picture Source: Bloomberg.com archives
Here is an interesting email that I received over the weekend that gives you an idea of the run-on-the-bank that Citibank is currently facing. While there are few rumors as to whether Citi will survive to see Monday morning, it is now almost certain that there is no news that will emerge before the start of markets. If there was any news, it would have emerged [or leaked] by this evening which would have given us a good sense of where Citi is currently headed. That has not happened and hence, I believe that we will see Citi opening to a low this coming week when markets do open on Monday.

Here is the email that I [and other Citibank customers received]

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Dear Max,

Good news! Citibank is participating in the FDIC's Temporary Liquidity Guarantee Program. Through December 31, 2009, all of your non-interest and interest bearing checking deposit account balances are fully guaranteed by the FDIC for the entire amount in your account. *

And as a reminder, in October the FDIC increased the amount of insurance on eligible savings accounts -- such as savings, market rate, money market accounts, club and holiday accounts, and certificates of deposits -- from $100,000 to $250,000 through December 31, 2009.**
...

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I have no doubts that my money is safe, given its meagre amounts. Nevertheless, I have withdrawn substantial amounts considering the fact that I may not be able to withdraw money immediately in case the bank does go under. Better to be safe than sorry they say.

While I do believe that Citigroup cannot be let to go down, purely because of the effect that it would have on the already bleeding financial markets, I am waiting to see what sort of a plan will be cooked up by the government and its emissaries.