Financial stocks in crisis mode

The recent share price plunge at Citigroup looks even more impressive if one looks at the big picture. Massive rising volumes and a very quickly falling stock may suggest that a bottom is not in sight.

Especially when it comes to risk: in a financial world that is a complex no one really knows where the dead bodies are. Especially when it comes to exotic financial products which involve derivates ("financial weapons of mass destruction").

A few months ago it was widely believed that the investment banks managed the risks of for example Mortage Backed Securities by simply passing them to investors.
With the horrible extent of the losses now slowly coming clear it once and for all shows that banks that leave the path of traditional retail banking and try to generate profits by riding the waves of the global financial markets are always to some extent exposed.

When there are big profits there are very often always big downsides in the financial world. If one chooses to ignore this basic rule, he later has to pay the price for this.