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In addition to Citigroup, the first batch of big banks that got capital from the government included JPMorgan Chase & Co., Wells Fargo & Co. (which just bought Wachovia Corp.), Bank of America Corp. (which just bought Merrill Lynch), Morgan Stanley, Goldman Sachs Group Inc., Bank of New York Mellon and State Street. Of these, Citi was one of the most hard-up for cash, having posted four straight quarters of losses totaling more than $20 billion. While most industry experts say Citigroup was in worse shape than others, it's hard to quantify how much more. Analysts don't know how much sicker the so-called healthier banks are going to get as the economy deteriorates and if credit markets worsen. Citigroup has more than $1.2 trillion in off-balance sheet assets -- mostly complicated, structured debt products that it has yet to take actual losses on. Citi has more of these than its peers, but other banks have them, too, and their value relies heavily on the health of the credit markets. "The concern is some of these off-balance sheet activities," said Lee Pinkowitz, associate professor of finance at McDonough School of Business at Georgetown University. "Are the banks in an even worse position than we believe they're in?" Losses could swell even more from consumer loans like mortgages and credit cards as Americans lose their jobs and watch their home values and nest eggs plunge. "Exposure to the U.S. consumer, in some ways, that's almost an equal concern to the general debt crisis," said Donn Vickrey, co-founder of Gradient Analytics. Before the Citi bailout, another key financial player was determined to be too big to fail
-- the huge insurer American International Group Inc., which received an $85 billion bailout in September. But AIG's lifeline later swelled to more than $150 billion earlier this month when it became apparent that the insurer would need additional funds to survive. "The definition of 'too big to fail' is changing all the time," said Sung Won Sohn, Smith Professor of Economics at California State University. "In the very weakened state of the economy that we are in, more and more institutions are qualified as
'too big to fail.'"
[Associated
Press;
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