Posted on 11/25/2008 10:14:31 AM PST by mojito
Another Sunday night, another ad hoc bank rescue rooted in no discernible principle. U.S. taxpayers, who invested $25 billion in Citigroup last month, will now pour in another $20 billion in exchange for preferred shares paying an 8% dividend.
Taxpayers will also help insure $306 billion of Citi's mortgage-backed securities. Citi will cover the first $29 billion in losses on these toxic assets, and then taxpayers will cover 90% of the rest, in exchange for another $7 billion in preferred. Dilution for Citigroup investors? Yesterday's 58% pop in the bank's share price suggests the bailout is a good deal for equity holders. For taxpayers, it is another large exposure for uncertain benefits.
More than a year into the financial crisis and decades into the perception that Citi is too big to fail, we once again have three tired guys making it up as they go. We wish Treasury Secretary Henry Paulson, New York Federal Reserve President Tim Geithner and Fed Chairman Ben Bernanke cared as much about their obligations to U.S. taxpayers as they do about the expectations of Asian investors. Few would argue that a bank with Citi's size and scope wasn't too big to fail, but is it too much to ask Washington to develop a policy that isn't crafted in a scramble of private phone calls?
(Excerpt) Read more at online.wsj.com ...
Obama's Rubin team signals that we are in for the greatest raid on the public purse in the entire history of western civilization.
This is a massive grab by the mob of all private wealth. Only the elites will be able to keep their wealth.
libs enjoy pouring OPM down ratholes to feed and sustain their broods.
Here’s hoping we even have elections in 2010 to toss these nudniks out of office if&when we can.
Follow the money.
The taxpayer takes it again. Another huge ponzi scheme is forming...sorta like SS. My guess is that a “NATIONAL BANK” under full government control, will form...much like the World Bank.
Then, the government will be able to take and spend as much as they want, without any citizen or taxpayer knowledge of how much of their money is gone and now resides as a stack of near-worthless IOUs. It will all look legitimate....but...
Sound familiar??? It should.
“This is a massive grab by the mob of all private wealth. Only the elites will be able to keep their wealth.”
Read history about what happens to ‘elites’ that destroy there own countries wealth through theft. It’s one thing to keep the wealth and another to continue breathing to be able to spend it.
I guess I caught the stupid virus. It started the first of Oct. 2007. When, due to mortgage losses, Citi and UBS announced large write downs and lowered earnings expectations. The very next day their stock price went up. I was not financially savvy enough to figure out why that news should send their stock prices up. The very next day I transferred all the money in my 401k from stock mutual funds to money market funds. My current bout of stupid is also being brought on by Citi. Noone has said the words bankrupt or insolvent, so I will. When a financial company goes hat in hand to the government and asks for a bail out of $306,000,000,000 to cover bad loans they made, plus another $20,000,000,000 in cash they are basically admitting they are bankrupt. Again I’m not financially savvy enough to figure out why such news should cause the stock market to go up. I guess my “stupid” money will stay in money market funds, only because under the mattress is not and option in my 401k. However when the government wants me to sacrifice my 401k, because it’s my patriotic duty to pay for all these bailouts, I’ll take the tax & penalty hit and the cash actually will go under the mattress.
Rant’s over I’ll go back to lurking.
Robert Rubin and Sanford Weill (both of Citigroup) engineered the whole economic collapse when they pushed Clinton to sign the repeal of the Glass-Steagall Act in 1999. This blurred the lines in the finance industry and caused a whole deck of cards to be built that have now collapsed.
You won’t be the only one!
He's currently on a slow boat to Elba.
Naw....This is all being done by some 12 year old dweeb on his computer using Windows Vista.
When incompetence is large enough and has enough political clout we enshrine it as part of the change they hope for, namely, that incompetence will go unremarked by the media that bows to them and the ordinary folks whom they have cozened will continue to reflect that same discernment that Zogby has exposed.
Forget about a good deal for equity holders. It’s the BOND HOLDERS who are making out in all these deals. Even in the Lehman bankruptcy, the Fed turned around and bought AIG and propped up all the insurers. Has anyone lost money on these bonds yet?
I want to hear bond holders scream and cry at the unfairness of it all. THEN, and only then, will I know the chips are falling on the guilty.
bump
That 12 year old would likely do better at this point with economic theory.
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