Citigroup Bailout is a GO

[Psyclist]

Monopoly money

In that case, I'll take the hotel at 301 Park Avenue, NYC. lol

[NewC]

Im putting a hotel down on Oriental Avenue.

[Scorpius]

From George Washington's Blog:

Nobel economist Paul Krugman:

"A bailout was necessary — but this bailout is an outrage: a lousy deal for the taxpayers, no accountability for management, and just to make things perfect, quite possibly inadequate, so that Citi will be back for more. Amazing how much damage the lame ducks can do in the time remaining."

• Economist and former labor secretary Robert Reich:

"This is not a particularly good deal for American taxpayers, but it is a marvelous deal for Citi. In return for all the cash and guarantees they are giving away, taxpayers will get only $27 billion of preferred shares paying an 8 percent dividend. No other strings are attached. The senior executives of Citi, including those who have served at the highest levels in the US government, have done their jobs exceedingly well. The American public, including the media, have not the slightest clue what just happened."

• Economist Paul Kedrosky:

"So far I'm not impressed"

• Financial advisor and analyst Yves Smith:

"Note key element of the deal is that the Federal government will guarantee $300 billion of Citi assets, a much bigger number than had been leaked earlier, with a rather convoluted loss-sharing arrangement, but the bottom line is that Citi is at risk for at most $40 billion. Citi also gets a $20 billion equity injection, on slightly more onerous terms than the initial TARP investments, but still more favorable than Warren Buffett's investment in Goldman. Oh, and it appears there will be NO management changes."

• Washington Post financial writer James Kwak:
  

"The third goal should have been getting a good deal for the U.S. taxpayer, but instead Citi got the same generous terms as the original recapitalization. 8% is still less than the 10% Buffett got from Goldman; a cap on dividends is a nice touch but shouldn’t affect the value of equity any. By refusing to ask for convertible shares, the government achieved its goal of not diluting shareholders and limiting its influence over the bank. And an exercise price of $10.61 for the warrants? It is justified as the average closing price for the preceding 20 days, but basically that amounts to substituting what people really would like to believe the stock is worth for what it really is worth ($3.77)."

Now, from other sources:

Eugene A Ludwig of the WSJ loves the bailout, as he spun it positively in his opinion piece titled Thumbs up for the CitiGroup Bailout: Treasury gets back to cleaning up bank balance sheets

Newsweek also seems to cherish the idea, as evidenced in their spin cycle: Stocks Soar on Citi Bailout, Obama Picks

The world's stock exchanges also seem to love this deal, as global exchanges appeared to have surged bullish on news of the deal.

Well, of course they did - Citi is a global bank. Many of it's shareholders are foreign, and many more dived in before this sweetheart deal.

Where the hell does all this money come from? Valid question, yes?

It is of critical importance to note that government does not produce anything. The only resources that government has come from those who do produce in the economy. Government collects and redistributes resources through means such as inflation and taxation. Good government then should be obligated to be good stewards of these resources. However, what we truly see (or most people do not see, sadly) in these bailouts of failing companies, is that government is confiscating resources (money) from the productive members of the economy and giving it to those who are not producing, those who are failing. In so doing, government is subsidizing companies with unsustainable business models. In short, the government is preventing the resources of these failed business models from being liquidated and made available to other companies that would put them to better, more productive use. That is how free enterprise and free markets work, which I have stated many times - we do not have. An essential element of a healthy free market, is that both success and failure must be permitted to happen. However, what government is doing with these bailouts is reversing the rewards normally associated with free markets. We see the profits (wealth) from healthy and successful entities being given to those which should rightfully fail. How this is supposed to be good for our economy is beyond me. Neither can we borrow our way, nor print our way out of this delima.

This will not and can not work. It is time to quit hoping beyond hope, quit pretending that these entities are 'to big to fail'. They are sucking us into a black hole of debt which can never be filled. We need to cut our losses and get this nation back on course toward a true free market economy. There is way too much at stake for us to continue down this road. So far, these bailouts for AIG, Bear Stearns, Fannie and Freddie, and the TARP funds amount to around $1.5 trillion. Come one people - that is butt load of money, especially considering that our GDP is $14 trillion. When we consider that the Federal budget is $3 trillion, it is clear that this additional amount will significantly cut into our future lifestyles. This already amounts to an extra $5,000 that every person alive in this country needs to somehow produce just to keep up. We quite simply have to reject corporate cronyism and socialism and allow the natural regulations and incentives of a truly free market to pick the winners and losers, not the bullied and bribed decrees of bureaucrats and politicians.

[metfan1971]

Bailing out the Mets and Central American banks.


The Citigroup bailout;



So US taxpayers are effectively bailing out THE WORLD.
.

The Mets are just another creditor. They sold Citi advertising rights long before any bailout was contemplated or needed. If Citi goes bankrupt (as it should), it can get out of the deal. Then the Mets would be free to name the stadium JP Morgan Chase Field, probably at a somewhat lower (but still somewhat hefty) price.

[Emperor Dragon ARX]

If we're using monopoly money, I'll buy the states of Alaska, Arizona, Nevada, Edwards AFB, and Colorado for $19,999,999,999,999.99

[NewC]

I didn't know George Washington was a blogger. Dude is up with the times it seems.

[Scorpius]

NewC - with all that input from the noted leftists and that long gray pony tail, he's clearly an old hippie.

[candygirl]

So how much is CitiGroup CEO going to pocket with his bonus, benefits, ect?

[Trance]

WaMu CEO took the bail-out, and then gave himself a $20 million package