The flight from Citi

Wall Street Journal/Fox News:

Executives at Citigroup Inc., faced with a plunging stock price, began weighing the possibility of auctioning off pieces of the financial giant or even selling the company outright, according to people familiar with the matter.

The internal discussions are at a preliminary stage and don't signal that Citigroup's board and management are backing down from their insistence that the New York company has ample capital, funding and strategic direction, these people said. But with the stock down another 26% Thursday, its worst one-day percentage decline ever, Citigroup officials have decided they need to reckon with a range of scenarios that were unthinkable only weeks ago.

Citigroup's board of directors is scheduled to have a formal meeting Friday to discuss the options, according to people familiar with the situation. Directors also have been talking by phone about what could be done to reverse the stock's slide.

Top executives were locked in meetings Thursday to hash out a stabilization strategy. Chief Executive Vikram Pandit scheduled a conference call for 8 a.m. Friday to discuss the situation with senior managers.

A Citigroup spokeswoman said in a statement Thursday evening: "Citi has a very strong capital and liquidity position" and is "focused on executing our strategy," which includes cutting expenses and selling assets. "We believe the benefits will be seen over time."

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Was Citi getting advice from that financial genius Robert Reuben? Isn't he one of Obama's economic advisers? My recollection is that Citi was recently also trying to buy the assets of Wachovia. It appears that at a minimum they are doing some restructuring and the fact that they are has set off a sell off of theri stock.

If they are as rich in assets as claimed that may make them a real bargain if there is anyone left with any money to buy them. Perhaps Paulson can put in a bid.

One of the counterintuitive aspects of this economic downturn is that small unaffiliated banks seem to be the most stable. Brenham National Bank is locally owned and apparently has no interest in being acquired. It also appears to have avoided some of the risky assets that have put its larger competitors at risk.