To: FlameThrower
Under the agreement, Citigroup Inc. will absorb up to $42 billion of losses on a $312 billion pool of loans. The FDIC will absorb losses beyond that. Citigroup has granted the FDIC $12 billion in preferred stock and warrants to compensate the FDIC for bearing this risk. Ummm...I'm not real sure about the math on that one. ;)
11 posted on
09/29/2008 5:45:51 AM PDT by
Mr. Jeeves
("One man's 'magic' is another man's engineering. 'Supernatural' is a null word." -- Robert Heinlein)
To: Mr. Jeeves
Looks decent. A $270 Billion insurance policy with a $42 Billion self-insured retention for $12 billion premium. If the value of the loans falls below 85% then the insurance applies.
To: Mr. Jeeves
Sounds like a ‘steal’ when the FDIC (taxpayer) pays off $270 billion of the banks bad loans. Citi gets the goldmine, the taxpayer gets the shaft.
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