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For months, the nation largest banks have struggled to regain investor confidence. In the center of the vortex is Citigroup, whose steep stock-market plunge accelerated on Thursday, sending shock waves through the financial world.
The shares slumped Thursday 26 percent, the bank has lost half its value in just four days. CEO, Vikram S. schoolteacher, will organize a meeting Friday for senior managers to update the bank’s condition.
Investors and analysts have long pressure banca to consider ways to raise its stock price, including the division of the company or selling parts. While some say also, the company must take into account the sale itself with everything, there is no certainty that any change will happen soon. Senior financial executives say the company is sufficiently strong and financing options. Moreover, there are few buyers who would be willing to pay a price that Citigroup would like to for the most valuable assets.
Citigroup executives are trying to stabilize the stock price, but this time they are not actively exploring the sale or division of the company, according to two people with direct knowledge of the discussions.

The Bank has posted four quarters of consecutive losses, caused billion in write-downs. Nine of the investment funds have cratered this year. And now, the bank could face a tsunami of losses in November, once to the lucrative consumer credit business in the global economy weakens.

In the bank’s Manhattan offices, television screens have stopped showing the price of shares of the company. Traders began to make jokes comparing the Titanic Citigroup.

But there is a wide gap between what Wall Street investors and executives think about Citigroup’s financial position. Senior executives feel that Mr teacher followed through on aggressive plans to shrink the company and control costs. The Bank has sold tens of billions of dollars’ worth of risky assets, improved capital position and announced plans to eliminate 52,000 jobs by next June. “We are entering 2009 in a strong position, much more stronger than we entered 2008, “said Mr. usher in a speech to employees this week.” We will be a long-term winner in this industry. ”

However, as the drumbeat of bad news about the bank grows louder, investors remain unconvinced. Even a decision by Prince Walid bin Talal of Saudi Arabia, which has bailed in Citicorp in 1990 to raise his stake to 5 percent Thursday failed to restore confidence in the bank. Two senior Citigroup executives said that the bank has not approached him about increasing its investment. Saudi prince of al soared as the initial investment Citigroup turned record profits, only to evaporate in recent years.

“The earnings power is there,” said Charles Peabody, a financial services analyst at Portales Partners. “It is a matter of Getting through the credit problems.”

Other large banks such as Bank of America and JPMorgan Chase, also tumbled Thursday as a broad capital market was down again, wiping out more than a decade worth of earnings. And Goldman Sachs, once the most sterling American investment bank, fell below 53 dollars, the price at which it went public in 1999.

Investors have feared that the bad news for banks will be worse as the economy slows. But this latest turn in financial shares, which are now plant their lowest depths, from the economic crisis broke out, reflects growing concern that banks like Citigroup will require vast amounts of additional capital, possibly from the government to make compared with the pain to come.

Home mortgages, loans, credit card, commercial real estate debt - all are likely to deteriorate further, now that a recession is at hand. Banks which have already lost billions of dollars could lose several billion.

“All the danger signs are flashing red,” said Simon Johnson, a professor at the Sloan School of Management at Massachusetts Institute of Technology.

Much of the fear centers on the unknowable. It is not clear how bad banks’ losses on consumer loans, credit cards and mortgages will be as the economy weakens. Commercial real estate loans are deteriorating, and it is not clear whether banks have sold the worst of their holdings. Then there are all investments that lurk on banks’ balance sheets, the so-called shadow banking system. And a new uncertainty has leapt to the forefront as the auto industry teeters, sending investors scrambling to calculate how much banks are exposed to these loans.

More banks hit record high Lows. Bank of America fell $ 13.86 to 11.25 percent, JPMorgan slid 17.88 to $ 23.38 percent and Goldman Sachs slumped 5.76 percent to close at 52 dollars. Morgan Stanley neared a record low, closing at $ 10.24 by 9.20 percent, while Wells Fargo fell $ 7.66 to 22.53 percent.

In a bid to calm nerves, Citigroup officials are meeting with other major shareholders. Last week, Citigroup chairman, Winfried Bischoff, traveled to Dubai and met with the sheik Ahmed bin Zayed al-Nahyan, the director of Abu Dhabi Investment Authority, according to two executives briefed on the situation.

The new assault on financial stocks led the Financial Services Roundtable, an influential lobbying group for industry, to press regulators Thursday for a ban on selling-short, a strategy in which investors bet against, price reductions in it shares.

Currently, the rout appeared to have won after impulse Treasury Secretary Henry M. Paulson Jr. announced last week that the government would abandon its original plan to buy troubled bank’s assets. That sent prices of commercial mortgage bonds and other loans into a nosedive. Mr. Paulson has also said the Treasury would give the incoming administration to determine how to implement the remaining $ 350 billion left in the program.

However, investors have grown increasingly nervous about the emergence of a leadership vacuum in Washington, as financial markets burn, and some began to say that President-elect Barack Obama should move faster to make a plan.

“I need someone to step in and show leadership,” said Wilbur L. Ross Jr., Chairman of the Company and WL Ross, an investment firm that was looking for negotiations in the banking sector. “Every day that he lost and that we will be in freefall will be the recession that much deeper and longer.”

That workers in the financial industry bracing for more pain.

“Major financial institutions were taking write-downs all year, and what you do next? You ask people, and that decreases the need for office space,” said Harold Bordwin real estate group at KPMG Corporate Finance . “It is very scary.”