Woke up this morning and found out that Citigroup (C) has fallen to $1.02. Anyone reading this blog shouldn't be surprised at this. The stock is now the playground of day traders and gamblers who buy and sell the stock throughout the day. If you check the Yahoo! message boards even those who buy this stock know the company is insolvent, they are hoping that short-sellers who have made enough (or are tired of sitting on so much profits) cover their positions and cause a temporary rally in the stock. Citigroup's market value is now smaller than Malaysia's Bumiputra Commerce Holding Bhd. If you check Bank of America (BAC) , the stock has fallen another 12%. BoA is where Citigroup was 3 months ago and JP Morgan is where BoA was 3 months ago. The train wreck continues. But all this does not surprise me given the information that is available. .
What surprises me was MM Lee saying that the GIC and Temasek invested in those banks "too early" [Link]. They invested in those banks more than a year ago. But what is the difference if they had gone in 6 months ago, 3 months ago or even 2 months? They would have lost most of their money anyway given these banks are insolvent. Citigroup stocks have fallen about 50% in the last 5 days. They had many months to discover their mistake and unwind their investments and save taxpayers' money. But they are unable to admit to making a mistake even today so we have Singaporeans' money stuck in these banks whose stocks are heading south everyday. It is highly dangerous to leave taxpayers' money in entities that are not completely transparent and it is even more dangerous when the people running them cannot admit their mistakes, learn their lessons and allow small blunders to turn into catastrophic losses. Even Warren Buffett, the world's greatest investor, openly admitted making "dumb mistakes". Why is it so hard for our elites to do the same? They could have gotten out of those bad investments and used to money to help needy Singaporeans who are suffering the worse recession ever but they rather deny their mistakes and leave the money in those banks to rot. What have Singaporeans done to deserve this? Did we not pay them enough to act responsibly?