Citi Corp Bailout

[alancw3]

once again the taxpayer takes it up the ***.

http://finance.yahoo.com/tech-ticker/article/134277/Citigroup-Rescue-Raw-Deal-for-Taxpayers-But-It-Had-to-Be-Done?tickers=C,BAC,JPM,XLF,%5EDJI,%5EGSPC

so why didn't the government require that the shareholders forfeit all equity in the company?

oh i forgot that would include all the executives that have lucrative stock options and are heavy political contributors!!!! bend over america!

[dancinkozmo]

...wonder if the citibank execs use corporate jets

[RPS]

oh i forgot that would include all the executives that have lucrative stock options and are heavy political contributors!!!! bend over america!Their stock options are not worth anything if prices have come down a huge amount recently. It would only be of value on shares they receive from now on that are issued at a low price -- and for all we know the government may have precluded that as part of the deal. I doubt it, but don't know that they didn't.

[Richard]

Forfeiture of equity would also smash what is left of the many 401Ks, other retirement accounts that are holding shares.

[CPP]

Maybe the US government will by my Extreme C!!!!

[andy mac]

privatize the profits.

socialize the loses.

nice work if you can get it!

:crap:

[johnnymossville]

I wonder who's gonna bailout the bailout when all this fails to make a difference?

[Blue Jays]

"...I wonder who's gonna bailout the bailout when all this fails to make a difference?..."We could always just print more money and distribute it. It's a pain to use wheelbarrows of cash to pay for a gallon of milk, but hey, who knows! ;)

[gemship]

I wonder who's gonna bailout the bailout when all this fails to make a difference?


The rest of the world :beer:

[csm]

.

Hit wrong button :confused: ... Sorry !

[1centaur]

First, seizing equity is nationalizing. Nationalizing banks is very third world. Why should anybody buy equity in any bank if it can be confiscated by the government? We want people to buy equity in banks so we don't have to.

Second, an attempt to take all equity should result in a bankruptcy filing so the value of the estate can be properly (not politically) determined. There would be major lawsuits and a market uproar (well deserved) if the government tried to get around that.

Third, Citi is arguably not in great fundamental trouble, but suffering from mark-to-marketitis as wise guys mentally mark Citi's CMBS to market in a world where AAA-rated CMBS is suddenly being sold by forced sellers to unwilling buyers for reasons more technical than fundamental. The government needed to restore confidence that Citi would not fail, rather than take it over, because a giant game of no confidence was being played by people who would make money if Citi failed. If you want to blame anyone, blame them, because they are creating the need to bailout using your tax dollars.

Fourth, putting in some preferred at a hefty yield and backstopping the values of some less liquid assets is not the mother of all bailouts. Could well be a money maker for the government (though not for us, as they'll never let us have those gains). If not, it will be because the world stays bad longer, not because the government wants to help out a certain class of people.

Once again, the accounting rules post Enron have the unintended consequence of pressuring the free world's banking system when the levered/rated/structured market breaks down. Not all break downs have to do with REAL value. The tenants in those buildings that make up the CMBS portfolios are not subprime slackers tempted by greedy mortgage brokers, but they will be hurt by a bad economy where lenders don't lend because they are hording capital. Very circular. As the Saudi prince (looking like Guido Sarducci) said on CNBC, Citi is now arguably overcapitalized. Time to lend, but to whom?

These bailouts are necessary, IMO, and not a sign of malfeasance at Citi. Citi's ratios are not much different from JPM's, which is viewed as the best bank. Citi was an opportunistic target for a particular fear/greed combo that has decimated a lot of stocks lately. It will be interesting to see how the govt unwinds all this stuff over the next few years.

[TMB]

once again the taxpayer takes it up the ***.

http://finance.yahoo.com/tech-ticker/article/134277/Citigroup-Rescue-Raw-Deal-for-Taxpayers-But-It-Had-to-Be-Done?tickers=C,BAC,JPM,XLF,%5EDJI,%5EGSPC

so why didn't the government require that the shareholders forfeit all equity in the company?

..........

Just try to imagine what that do to every single mutual fund and Pension fund around the world that is invested in Citi?

[csm]

my mortgage is through them. I have a citi card that I use for work expenses. I wonder if we're seeing a glut of bailouts b/c they are available? rather than work it through making tough choices, it is just easier to go to the govt and beg for a cash infusion.

[znfdl]

Bank Playoffs

[Blue Jays]

I don't even raise my head from the newspaper if I hear radio/television commentators say "millions or billions" anymore.
I'm only interested in the "trillions" now, baby! ;)

[Ahneida Ride]

What comes after Trillions ? (a Google ? ;)


As I understand it .... Citi was involved heavily in derivative speculation.

Actually it's amazing that any bank remains solvent at a fraction reserve
ration of 10% ... It can be leveraged up to 10 to 1.

Taxpayers pay for the bailout thru inflation (frn dilution) as the bailout
frns are created outa thin air.

What I have learned from recent events is that the name of the game
is bailout. Maximize profits by any reckless means possible. Take profits.
When the game is over ... cry bailout.

Perhaps if bail out was not possible a bit more caution would be
exercised.

See ya all at the next bail out ....

Nick Leeson :p

[RPS]

I don't even raise my head from the newspaper if I hear radio/television commentators say "millions or billions" anymore.
I'm only interested in the "trillions" now, baby! ;)$7.4 trillion made our paper this morning.

"The US government is prepard to lend more than $7.4 trillion on behalf of American taxpayers........". from Bloomberg News :crap:

[johnnymossville]

$7.4 trillion made our paper this morning.

"The US government is prepard to lend more than $7.4 trillion on behalf of American taxpayers........". from Bloomberg News :crap:

That kinda money makes little things like wars seem like umm, to quote Obama, "Chump Change."

[alancw3]

What comes after Trillions ? (a Google ? ;)


As I understand it .... Citi was involved heavily in derivative speculation.

Actually it's amazing that any bank remains solvent at a fraction reserve
ration of 10% ... It can be leveraged up to 10 to 1.

Taxpayers pay for the bailout thru inflation (frn dilution) as the bailout
frns are created outa thin air.

What I have learned from recent events is that the name of the game
is bailout. Maximize profits by any reckless means possible. Take profits.
When the game is over ... cry bailout.

Perhaps if bail out was not possible a bit more caution would be
exercised.

See ya all at the next bail out ....

Nick Leeson :p

+1 and what galls me is all the bonuses that were paid the executives of these financial intitutions as they window dressed thier earning. oh and do you think these very same executives have any remorse for the america people? i think not. now they are looking for even more. just an absolute shame that people are no longer held accountable for their actions in corporate america. i guess accountability is a taboo word nowadays.

[johnnymossville]

LOL, Not only were they the architects of this scheme, got golden parachutes after they screwed it up, now they're helping BO run the show. Robert Rubin Lackeys. Oh what fun!

[fiamme red]

http://www.slate.com/id/2205995/pagenum/all/

Note the author.

[Blue Jays]

/\/\ It's hilarious that cat is doing anything in the public eye!
Then again, it's said the most-dangerous place to stand is between Eliot Spitzer and a television camera, and not wearing a bicycle helmet for protection!