Treasury announced this morning that it would be
bailing out Citibank exercising its option to convert $25 billion of preferred stock in Citigroup to common stock at a value of $3.25 per share. Since shares closed at $2.42 yesterday, this seemed rather generous. At the current price of $1.55 per share, it seems positively extravagent. As Felix Salmon
points out, this is a gift worth about $13 billion to Citibank.
Henry Blodget
notes Vikram Pandit saying:
In many ways for those people who have a concern about nationalization, this announcement should put those concerns to rest.
Which sounds sort of like "Well, after we got the diagnosis, he stopped being so concerned about dying. My, doesn't he look
natural laid out like that? And such pretty flowers!"
Remind me again, why was it so important that Tim Geithner become the new Secretary of the Treasury?
Thorley, because NotMyPresident said so, that's why. Do not question The Messiah, or his annointed ones!
"Well, after we got the diagnosis, he stopped being so concerned about dying. My, doesn't he look natural laid out like that? And such pretty flowers!"
Probably the funniest thing I've read all day...
Nick
Man, fuck the bankers. No further comment.
I think we can conclude from this deal that Citigroup is definitely less than alive. It will live (undead) off of government capital until it is eventually dismembered.
Actually BasicCanuck,
Megan said it was so important to have Geitner.
Is she now NotYourHostess?
Fucknut
"I think we can conclude from this deal that Citigroup is definitely less than alive. It will live (undead) off of government capital until it is eventually dismembered."
Then who's going to finance the extended warranty on my new Chevy? I'll have to take out another home equity loan. Oh, wait...
I'll cash in my stocks. Oh, wait...
Obama administration has successfully make more and more people to believe that big government spending is important, by deliberately postponing the implementation of Financial Stability Plan/Bank Rescue Plan. The later the implementation of such plans, the better to convince people that big stimulus spending, big government intervention is necessary.
It is nonsense to postpone the implementation of Financial Stability Plan/Bank Rescue Plan, if there is such a plan, and if the government intends to increase capital in the banks if these banks are concluded to need government capital after stress test. In other words, Obama administration can commence the Plan before the implementation of stress test. With or without the stress test, Obama administration will increase sharehodlings in banks which need capital.
The earlier implemenation of Financial Stability Plan, the sooner the economy recovers. The less demand for big government.
The later implemenation of Financial Stability Plan, the longer economy suffers, and the better for the case of big government spending.
Zombie Banks/PINO's (private in name only) are dangerous now--they'll be motivated to do some wild things and they know they're too big to fail.
Why again are we bailing out failure?