Citigroup (C) and BofA (BAC) Lower on Nationalization Fears

February 20, 2009 7:39 AM EST
Citigroup, Inc. (NYSE: C) and Bank of America (NYSE: BAC) are lower again this morning as a consensus is forming that these banks are the weakest-links and may be nationalized.

Last night, bearsh-banking analyst Meredith Whitney said Citigroup shares are effectively worthless and today Barry Ritholtz is saying the same thing. Both have been dead-on about the crash in bank stocks.

There has also been comments recently from former Fed Chairman Alan Greenspan and current Fed Chairman Ben Bernanke about nationalization. Bernanke's comments may have been taken out of context, but nationalization has clearly been brought to the table.

According to reports from the Wall Street Journal, BofA CEO Ken Lewis addressed nationalization speculation during a senior leadership meeting Thursday. Mr. Lewis told them policy officials in Washington have assured him that such an option isn't on the table. He also said he has urged the government to say this publicly.

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