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U.S. Agrees to Citigroup Bailout (Guarantees $300 billion in toxic assets)
Wall Street Journal ^

Posted on 11/23/2008 8:43:14 PM PST by mathwhizz

The federal government agreed Sunday to take unprecedented steps to stabilize Citigroup Inc. by moving to guarantee close to $300 billion in troubled assets weighing on the bank's books, according to people familiar with details of the plan.

Treasury has agreed to inject an additional $20 billion in capital into Citigroup under terms of the deal hashed out between the bank, the Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corp. Treasury officials will charge a higher interest rate for the capital injection -- 8% for the first few years -- than it has charged to dozens of other banks now borrowing money under the government's the $700 billion rescue package approved by Congress last month.

In addition to the capital, Citigroup will have an extremely unusual arrangement in which the government agrees to backstop a roughly $300 billion pool of its assets, containing mortgage-backed securities among other things. Citigroup must absorb the first $37 billion to $40 billion in losses from these assets. If losses extend beyond that level, Treasury will absorb the next $5 billion in losses, followed by the FDIC taking on the next $10 billion in losses. Any losses on these assets beyond that level would be taken by the Fed.

Citigroup would also agree to work to modify -- if possible -- troubled mortgages held in the $300 billion pool, using standards created by the FDIC after the collapse of IndyMac Bank.

The government is not expected to require any management changes, as that was seen as potentially being too destabilizing.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Breaking News; Government; News/Current Events; Politics/Elections
KEYWORDS: acorn; bailout; bank; banking; bankinglist; banks; bernanke; betrayal; bushbailout; bushlegacy; bushsellout; citi; citibank; citigroup; constitutionalcrisis; credit; epicfail; failure; fdic; fed; federalreserve; financelist; financialcrisis; giveaway; moneylist; paulson; sellout; socialism; treasury; ustreasury; zombiebank
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To: ConservativeMan55

Treasury took on only 5 billion.

Well 5 billion is 5 billion.. but it isn’t 300 billion. People need to understand what comes out of their pocket versus what comes out of private companies pocket.


21 posted on 11/23/2008 9:10:27 PM PST by Almondjoy
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To: St. Louis Conservative

Based on Obama’s picks so far, I doubt it. The socialists... oops, I mean, libs, would rather destroy this country with socialized healthcare than use good common sense during these difficult economic times.


22 posted on 11/23/2008 9:11:34 PM PST by NinoFan
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To: mathwhizz

Give us your poor, your tired, your weak, your hungry...

...your crap loans, your garbage stock, your bankrupt corporations


23 posted on 11/23/2008 9:12:51 PM PST by autumnraine (Churchill: " we shall fight in the fields and in the streets, we shall never surrender")
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To: umgud

They should have let them go under!

Every dollar they print for a stimulus or bail out is stealing from me and the people agreeing to them should be brought up on grand theft charges and put in prison!


24 posted on 11/23/2008 9:13:43 PM PST by dalereed
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To: mathwhizz

Prince Alaweed bin Talel is a major stockholder in Citigroup. I suspect that the Saudis have applied major pressure to make this happen.


25 posted on 11/23/2008 9:16:00 PM PST by kabar
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To: mathwhizz

That’s it....I’m not paying for anything else. My government is to stupid to let a bad penny go...The inmates have taken over the asylum....


26 posted on 11/23/2008 9:16:29 PM PST by Issaquahking (Obama won the election, and America lost!)
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To: mathwhizz

why would there be changes when rubinites are and will be running the federal show (paulson, benrnancke, geitner, summers)


27 posted on 11/23/2008 9:16:43 PM PST by rickylc
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To: mathwhizz

Great...throw the money down the invisible banking toilet, but don’t bailout real workers. Washington bailing out its own.


28 posted on 11/23/2008 9:17:09 PM PST by madison10
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To: mathwhizz
200 billions stimulus
700 billion bailout
300 billion for citigroup
WTF is going on here? We the tax payers are going to be buggered and BEGGARED with all this $$ they are throwing out.

Unless they are planning to monetize the debt ... we're all dead meat.

29 posted on 11/23/2008 9:18:59 PM PST by Centurion2000 (To protect and defend ... against all enemies, foreign and domestic .... by any means necessary.)
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To: dalereed

This is insane. Pretty quick you’d think the populace would revolt at their dollars bailing out everybody but them. You and I have to live within our means or face the consequences, but our gov’t keeps giving away our money. My kids and grandkids may never forgive this generation who prematurely bankrupted them.


30 posted on 11/23/2008 9:28:25 PM PST by umgud (I'm really happy I wasn't aborted)
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To: Prokopton

I lost money too.
How about my bailout?
I want free taxpayer money too!


31 posted on 11/23/2008 9:33:11 PM PST by OldArmy52 (Change a Socialist can believe in: Vote Obama. Your dog and dead Gramma did.)
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To: PAR35; TigerLikesRooster; bamahead; AndyJackson; Thane_Banquo; nicksaunt; MadLibDisease; ...

The Money, Banking, and Financial Markets Ping List.

"Money, not morality, is the principle commerce of civilized nations."
—Thomas Jefferson

FR Keywords: moneylist, bankinglist, financelist

Please tag all relevant threads with the aforementioned keywords.

This can be a very high-volume ping list at times.

Ping list jointly pinged by rabscuttle385 and TigerLikesRooster.

To join the ping list:
FReepmail rabscuttle385 with the subject line add  moneylist.
(Stop getting pings by sending the subject line drop moneylist.)


32 posted on 11/23/2008 9:33:28 PM PST by rabscuttle385 ("If this be treason, then make the most of it!" --Patrick Henry)
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To: Uncle Ike; RSmithOpt; jiggyboy; 2banana; Travis McGee; OwenKellogg; 31R1O; Ken H; Gritty; ...
*Ping!*
33 posted on 11/23/2008 9:33:50 PM PST by rabscuttle385 ("If this be treason, then make the most of it!" --Patrick Henry)
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To: mathwhizz
If there are no taxes left to be paid since we all become broke or jobless and all countries stop investing in us because the value of the dollar becomes worthless and we face Weimer Republic - at what point is the U.S. technically heading here: US Bankruptcy
34 posted on 11/23/2008 9:36:50 PM PST by Lilpug15 (I'm Moving to Alaska...You can Keep THE CHANGE!)
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To: rabscuttle385; All; NormsRevenge; Grampa Dave; SierraWasp; tubebender; Marine_Uncle; ...

Obama in the act already...GM, Ford and Chrysler up next!


35 posted on 11/23/2008 9:37:49 PM PST by Ernest_at_the_Beach (No Burkas for my Grandaughters!)
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To: mathwhizz
Marketwatch:

U.S. agrees to bail out Citigroup: WSJ

*************************EXCERPT****************************

A similar assistance structure was used successfully in the 1990s, with funding from private investors, to rescue Mellon Bank, now called Bank of New York Mellon Corp.

36 posted on 11/23/2008 9:40:45 PM PST by Ernest_at_the_Beach (No Burkas for my Grandaughters!)
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To: mathwhizz
So about a trillion and a half dollars later and we have:

Nbr of changes made to ensure this doesn't happen again: 0

Nbr of perp walks: 0

Nbr of congressional hearings: 0

Nbr of times this will happen in the future: Infinite - It works!

Charming ;(

And of course nobody in the Fed govt will have any idea where THIS $300 billion goes either.

Banks are laughing their asses off over this. THey got the feds cowed and the banks are just sitting on all this fortune and investing it in a better opportunity, earning far better earnings than they were this time last year.

37 posted on 11/23/2008 9:41:49 PM PST by ConservativeCompendium.net (We need to amend the US Constitution. We the People --> We the Politicians.)
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To: mathwhizz

So, how much of he Bush bailout/sellout money is left?


38 posted on 11/23/2008 9:42:16 PM PST by XR7
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To: hercuroc
Madness?


39 posted on 11/23/2008 9:46:27 PM PST by downwdims (If Peace is the answer it must be a stupid question)
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To: mathwhizz; All
PDF File containing the details from the Treasury :

Treasury Department statement

40 posted on 11/23/2008 9:47:33 PM PST by Ernest_at_the_Beach (No Burkas for my Grandaughters!)
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