U.S. Agrees to Raise Its Stake in Citigroup

The Treasury Department said it would vastly increase its ownership of the struggling company.

Comments: 125

  1. Hmmm. We give Citi Billions equal to several times over their entire market worth. We get 30 - 40%?

    Hey, Geithner - I've a nice Bridge in Brooklyn. An historic landmark. Its cheap. I'll sell it to you for a mere Billion.

    Bloomberg would probably even sell it to you for less.

  2. This move just raises more questions and provides no answers. Even as this third bailout is being arranged, it is almost common knowledge that Citigroup will require more. Is it right for the taxpayers to be used in an effort to protect those investors owning preferred stock? Is this effort just to postpone nationalizing the bank? Is the end result of unregulated banking either nationalization of banking or the collapse of banking? The only clear fact in all of this is that greed is extremely expensive.

  3. What affect does this have on retiree's pension and health benefits?

  4. US taxpayers already have paid Citibank more than 100% of Citibank's market value.

    The correct percentage of public ownership is 100%, not 40%.

    Place Citibank in receivership. Put Citibank executives--all of them--on unemployment lines. Purge assets of Citibank stock speculators (quaintly referred to as "shareholders"). Now.

  5. Today’s Citigroup article by Eric Dash and today’s Op-Ed piece by Paul Krugman both make interesting reading.

    The Dash article says that taxpayer money currently invested in preferred shares in Citigroup will be converted to common shares in Citigroup, paying over double the current market price for common shares – another huge give-away of taxpayer money. Note also that if the taxpayer investment becomes based on common shares, bank nationalization (that the Administration is currently resisting so strongly, and in which shareholders would be wiped out) would result in the taxpayer investment also being wiped out. This would create an enormous financial impediment to the bank nationalization option advocated by so many people today. In addition, the Administration is talking of additional billions of dollars of no-limit financial support for the Citigroup bank holding company (note, not just Citibank).

    Paul Krugman's column says that "The administration’s refusal to get tough on the banks may be deeply disappointing" but he otherwise supports most of the far-reaching changes in economic policy advocated by the President.

    So let me get this straight. The Administration has proposed a courageous and radical shift in economic policy including more taxes on the rich, and major investments in energy, health and education. However, powerful members of the Administration's economic team (with strong ties to the financial industry) want to continue to bailout irresponsible bank executives and bank shareholders with taxpayer money and to game the system to prevent bank nationalization because the taxpayers' bank investment would be wiped out.

  6. Only hope is the administration is not throwing good money after the bad. It's such a tough call! Alternative: Do not let the stupid banks get that big. After 1929th crash banks were kept to size and they were limited to the State they operated, but during Reagan years they lobbied hard and said they can not compete with the foreign banks thus all those limitations were lifted. And now, not only themselves went in down flames but also took the World Finance System with them.

  7. I trust that the Fed will control a majority of the Board and have the right to object to any management decision made by its officers. I also trust there will be no retention bonuses and no salary that exceeds $1,000,000. The public will not tolerate any bailout that favors Citi management.

    As far as the Joint Venture with Morgan Stanley is concerned, the Fed should have a veto power over any management decision made by the joint venure since both members have been bailed out by the Fed. The retention bonuses announced by the proposed joint venture should not be permitted.

  8. A few years from now, these US initiatives into helping and guiding Citi and others would shine as great leadership or seen as foolhardy. A lot depends on the length of recession, real estate prices, credit availability, character of the bank management, interest rates, international events and how world perceives the US leadership.

  9. I think we should allow regulation by the states instead of having very weak regulation by the federal government. Even if the federal gov writes new legislation there isn't manpower for regulating the giants. These large banks have done nothing for us. Volker says to limit them but doesn't really have the people to check on them. Personally I'll take my credit union over any of these big giants.

  10. Yonkers, New York

    27 February 2009

    Even a 40% government stake in Citigroup will eventually prove insufficient to stabilize the bank and make it a viable institution.

    Sooner rather than later there is a very good chance that because the consensus is that this is a bank that "cannot afford to fail," the government will inevitably need to raise its stake even beyond 50%.

    At that precise point, of course, the government will have the controlling interest in the bank.

    At that precise point, of course, the nationalization of Citigroup will have become a fait accompli.

    The opposition to the nationalization of the U.S.'s big banks, at that precise point, will have become moot and academic. But nationalization need not be permanent, however; it has to be only temporary under certain criteria.

    Mariano Patalinjug

  11. Although I agree with the moves that the Obama Administration has made so far (stimulus package, budgetary priorities, mortgage relief), I'm not convinced that shifting taxpayer money from preferred shares to common shares is the way to go.

    It is a good thing that they are doing it on a matching-fund basis, thus getting private investors to pony up some of the money, but I don't see how this solves Citigroup's problems. After all, they're just shifting money from Tier 1.

    I'm afraid that Obama is not being bold enough in getting in front of this banking crisis. We risk dragging out sluggish economic growth, as in Japan's case, if we don't clear some of these bad banks from the landscape.

  12. Based on this article, I see no upside for Citigroup's stock resulting from Treasury converting preferred stock to common. When an investor buys a stock, its sends a signal that future earnings are expected to increase. I don't beleive that the market believes this to be the case with Citigroup. The government will have to come up with another incentive to get private capital into Citigroup. That incentive will have to address the perceived risk from Citi's underlying toxic assets. This may be against the grain, but Treasury is not in a position to send the appropriate signals to investors. Unfortunately, the alternative may be politically infeasible.

    Alton E. Drew

    www.altondrew.com

  13. Every single share the US government throws a bid at has the effect of price manipulation. In doing so, the government artificially raises demand for Citibank shares and drives up the stock price for the Zombie bank. It’s is basically a subsidy to the investor, who would be wise to use it as an opportunity to exit their market investment in a stock that should have gone to zero a long time ago.

    Treasure continues to reward bad banks and the investors who supported them. The US government is literally shifting money to the investor from the taxpayer who will be burdened with the debt of the effort, deepening risk, and more outrageously, the effort charges the taxpayer an interest rate for the cost of doing so! So much for consistency of transferring wealth from rich to poor within the Obama administration…

    I say throw the senior managers and the investors under the bus and let the Zombie banks die!

  14. Aren't we past the point where sugar-coating Citibank's collapse is counterproductive?

    Its management was allowed to create a financial Frankenstein of parts and destroy the bank's core value.

    Why let anyone forget why the collapse of banking happened? Are we still so afraid of the power of GOP political assaults -- of its lies -- that we're afraid to call the result of its policies what it is?

    The loudmouthed drunk has already left the table, and left the rest of us to pick up the bill.

    "Nationalization" is the word and Citibank is already there, so let's just face facts and call it what it is.

    We've been living with lies long enough.

  15. There is a deal for a "third bailout" of Citigroup.

    You have got to be kidding!

    By the way, how's that new Citi ball park coming?

  16. All the bonuses for the past five years should be reclaimed. There were no profits.

  17. While execs are collecting bonuses, the credit card companies they have mismanaged are issuing to customers new terms and conditions, raising finance rates, etc., I don't understand why those of us who have been making timely payments are being punished. If finance rates on credit cards and other debt were adjusted down, it would encourage more people to continue paying and not simply walk away.

  18. The American taxpayers are being taken for another ride. First , the bankers through greed and stupidity created a mess which has already created untold losses ( collapse of stock markets, property prices , etc ) and difficulties ( job losses, etc. ) for the average citizen.

    Now their tax moneys are being used to bail out these banks at terms dictated by idealogical considerations. " Nationalisation " is such a dirty word that the U.S. government is going to buy common stock at inflated prices so that it will not end up with 100 % of Citibank and thus "nationalise" it.The realty is that with the amoumts pumped in, the Government should own 100% of the bank.

    Why should the American taxpayers pay for the shares at inflated prices , take the risks of losing all that money and yet not benefit from the full upside if and when the bank does recover from the current crisis.

    WAKEUP Americans , what we are seeing are plutocrats at work !

  19. Good grief, why dont we just open the doors and let Citi and BofA and the Big 3 and anyone from Wall Street who wants to, just waltz in and take all the cash they want? Hey, it's only money, right?

    In case anyone in DC missed the memo: THESE GUYS GOT THEMSELVES INTO THIS MESS. WHY ARE WE GIVING THEM ALL THIS INSTEAD OF MAKING THEM FIGURE OUT WHAT TO DO ON THEIR OWN???

    Truly, keep this up, and if I owe any taxes come April, I may just send a little note to the IRS telling them that I need a little bailout too. And it wont be tax evasion, it'll be TAX DENIAL.

  20. As Josef Ackermann, head of Deutsche Bank, remarked: he, and presumably all foreign banks, will be happy to hire American talent when earnings caps are imposed from Washington.

    Gypsies, tramps, and thieves.

    You can butcher your business sector. But you can't root out human nature.

  21. So let me get this straight, and someone help me out if I have this wrong. The government, MY government, YOUR government, OUR government will now own 40 percent of this bank. The same bank that has gotten BILLIONS of our hard earned dollars. AND what do I get and maybe you? hmmmm I opened my citibank credit card statement yesterday and was informed that my interest rate will now be 29 percent due to the "economic times". ARE YOU KIDDING ME?!? We gave them and other card companies billions of tax payer dollars and now this and NO clause in there that prohibits them from gouging you and I like this!??

    Why is there no legislation being passed NOW to stop this?? Are you effected? CALL YOUR REPRESENTATIVES NOW!

    POWER TO THE PEOPLE!

  22. "Details remain murky, but the government has agreed to convert its investment at a price of as much as $5 a share, more than twice the value of Citigroup’s $2.46 closing share price on Thursday."
    Why is the government subsidizing existing shareholders by investing at a price above the market? A control premium is hardly appropriate bailout.
    And should the government be forced to inject more, it will be diluting its own shares.
    Also ignored is the unfettered support of the bondholders.
    I believe that these banks may need to be taken over, assets & liabilities restructured, and the operations broken up to reduce the risks being too big to fail.

  23. We're paying more than double yesterday's closing price per share?

    For the first time in history, Welfare Queens have actually been spotted, and as Ronald Reagan told us, they are driving expensive cars: they are the bankers of Wall Street, lining their pockets with Middle Class tax dollars handed to them by Geithner, Summers, and company.

    Shame.

  24. In the former Soviet Union the operative line was "You pretend to work and we pretend to pay you." For Citibank it is "You pretend you are solvent and we throw real money down the rathole."

    Even if the government thinks the institution is worth saving, there is not a single high level executive who should not be shown the door, today, without any severanc or benefits. The managers successfully ruined the private shareholders, and they are now doing the same to the taxpayers. It's hard to say, but any middle level government bureaucrat could have done better than the brightest people in the world.

  25. Be responsible, live within your means, invest in your children's & family's future, then have the Federal Reserve create another bubble & ROB YOU BLIND.

    Please help me Federal Government, I lost all my customers deposits gambling on mortgage backed securities, can you rob the younger generation and reimburse me?

    I desperately need to renovate my office and MUST have this $86K area rug, a $35K toilet & a $1400 garbage can.

    When the revolution is over, we will have a sound Constitutional monetary policy and politicians that actually represent the people & defend our United States Constitution.

  26. A TOTAL rip-off. Let them go bankrupt.

  27. I've heard President Obama repeatedly speak about taking tax breaks from companies that ship jobs overseas. Fine.

    Well, what is the difference between these companies and the financial companies tax payers are bailing out with billion of dollars in loans? AIG, Bank of America, Citi Group all have been moving jobs overseas for years -- it jobs, call center jobs, anything to help the bottom line.

    Double standards continue to come from federal government.

  28. It looks like the top priority in all of this is to protect management and the shareholders.

  29. An educated public is an essential ingredient of a free society. Ambitious governments would have far greater difficulty implementing schemes that undermine liberty and prosperity were they faced with an informed and vigilant population.

    Not one aspect of the bailouts or stimuli address our monetary policy which is responsible for creating these “Bubbles”.

    Free Markets should be steering this ship, however to get to a truly Free Market we would have to reject the interest rate being monopolistically dictated by a single private central bank, the Federal Reserve.

    The public will continue to be robbed by inflation and devaluation of personal property and life savings unless we demand a Constitutional monetary policy.

    Had our government operated strictly within it’s originally created Constitutional boundaries, this financial system collapse & 9/11 would not have happened.

    I PROTEST that I OR MY CHILDREN should be held ACCOUNTABLE for any citizen’s or private business’ own INDEPENDENT, irresponsible decisions & behavior!!!

    What makes this a free country?

    Because the idea of the government forcing one group of citizens to surrender their time invested labor for the benefit of another group of irresponsible, private businesses & citizens is NOT my idea of a free country! That is TYRANNY!!!

    No where in the Constitution does it require one group of citizens to surrender their labor for another group of citizens.

    REVOLUTION.CAMPAIGNFORLIBERTY.RONPAUL2012.

  30. Depositors should withdraw all funds from Citigroup, not ncessarily to punish them, but to show their distrust of a company that has to borrow $45,000,000,000 just to HOPE to stay alive. If private investors won't put their money with them, why should you? Only the Government is that much of a sucker. But they play with other peoples money (yours); the private investor plays with his own. That should tell you something.

    Only when the private investor goes in to the banks, without matching government funds, should you be willing to leave any reasonable amount of money with them.

    Under the mattresss, the most you could lose is any increase in the cost of living, a miniscule amount compared to losses in a 401k or any other type of investment.

  31. If this gambit works in easing credit and facilitates an economic revival then the increased tax revenues will more than make up for it.

  32. So when Obama said, in the address to congress, we wouldn't be rewarding the irresponsible, he wasn't speaking about banksters. Bank criminals will be rewarded with an endless string of bailouts. I wonder why he left that little detail out.

  33. "Against all enemies both foreign and domestic"

    I think the domestic enemies are winning.

  34. This would be the company run into the ground by former President Clinton's treasury secretary. What, I thought all of this was George Bush's fault. I'm confused...please explain why we are blaming former President G. W. Bush for the deregulation of the former Clinton administration.

  35. Reward management that took risk without regard to consequences; (Robert Rubin) who took out

    more than $100,000,000,00 since leaving Treasury to become senior "advisor" at Citi.

  36. How sad. Citigroup is dead, stop trying to revive the dead patient.

    Citygroup has trillions in counter party agreements. You can keep feeding the Beast and won't makea bit of difference. Ultimately, it will fail and the taxpayer loses several hundred billion dollars.

    At the very least the taxpayer should have gained 100% ownership of Citigroup. At the time of the last $20 Billion infusion, it was equal to Citi's total market valuation yet, we got a 5% stake.

    Please stop raping, plundering and pillaging the National Treasury.

    Why don't you try nationalizing the Federal Reserve.

  37. I feel so much better now that I own 36 percent of nothing rather than 8 percent of nothing.

  38. Democrat Bob Rubin destroyed a great American institution and pocketed over $100 million doing it. Rubin chaired Citi's Executive Committee and was the driving force (when he was Clinton's Treasury Secretary) behind the deregulation that allowed Citi to expand into the toxic assets. Why did the government overpay for its 36% stake in Citi? Because Rubin proteges Summers and Geithner are the decision makers. I think Summers and Geithner should be investigated to see how much influence Rubin had over this bailout of Citi.

  39. Now that the taxpayers own a huge chunk of Citibank; maybe the New York Mets, and New York City, should cancel the $20 million naming rights to Citi Field. $20 million is a drop in the bucket considering the billions of dollars involved, but is is a not an expense that should be borne by the taxpayers.

  40. I am actually happy that the government is taking over Citigroup because now I know my deposits are safe regardless of FDIC. My accounts are now REALLY backed by the US government. On the other hand, if I were a competitor bank are they at a competitive disadvantage because the government has stated that Citibank is too big to fail?

  41. I am starting to think that I am really stupid for continuing to pay my credit card bills. My taxes are being used to throw cash at a completely failed bank. That same bank, and all the others, keep raising the interest rates on our credit cards. Does anyone else recognize the moral perversion of this? And the CEO of Citi is keeping his job? Does any elected official in Washington have any common sense?

  42. At a time when bailout trillions seem so readily available is anybody verifying that the financial institutions and companies like GM are telling us the truth?

    By certifying the public reports that collectively depict a corporation's financial status, the independent auditor assumes a public responsibility transcending any employment relationship with the client. . . . The "public watchdog" function demands that the accountant maintain total independence from the client at all times and requires complete fidelity to the public trust.

  43. The effective acquisition of Citbank by the government, raises some intereresting possibilities.

    For example: if 1) the US now owns/controls Citibank; and 2) Citibank in turn controls, say, PEMEX, through loans, defaults; while 3) PEMEX controls/finances/owns Mexico; then 4)does the US now own Mexico? 5) Or, say, its oil?

    To be sure, the Mexican constitution technically forbids such foreign ownership of a national treasure; the heart of the Mexican economy. But various funds and trusts have at times been set up, that back up loans, using Mexico's oil revenue.

    Odd isn't it, that just when gas prices are going through the roof, and the US needs oil ... it suddenly ... acquires controlling interest in banks that in turn ... have claims against Mexican oil.

    Amazing coincidences are happening all the time, I guess.

  44. Researches find that providing patients with severe chronic illnesses with more intense health care in the last two years of life—increased spending, more tests, more procedures and longer hospital stays—is not associated with better patient outcomes. Well, we're witnessing one such case right before our eyes. Does anyone expect a different outcome?

  45. Let's see...

    A few months after the first bailout I received a letter from Citibank advising me that they were raising the annual apr on my credit card even though I had never made a late payment and have an excellent credit record. When I called to complain, the customer service representative told me that they were forced to do this in order to remain competitive and viable.

    Now, I'm being told that the government will use my hard-earned tax money to purchase Citibank shares at an inflated rate to prevent it from failing altogether.

    Why am I, a middle-income worker with no ties to the finance industry, paying (quite literally)for this company's greed and incompetence?

  46. What are some of these readers thinking about? Citi is a great ship of banking and commerce. It had fallen into the hands of economic pirates, fools and knaves who for their own misguided self-interest and as a result of blinding greed have recklessly run this gread ship of banking and commerce onto the rocks and it is taking water fast. Some standing on the shore, armed with ignorance and talking points, who have little idea of the importance and usefulness of this great vessel, call out to let Citi sink even as it is clear that the pirates, fools and knaves will be unpacking their lifeboats and heading for their yachts. Don’t these readers understand that the existence of such a vessel of banking, once purged of those blinded by greed, cannot be easily replaced and that Citi can become a flag ship in the recovery fleet. Let giant banks die, don’t bail them out? Herbert Hoover tried that idea. Who will they blame when these folkd do not like where that road leads.

  47. The handwriting is not on the wall, you're seeing an enormous flashing orange billboard! Here's the most likely scenario for what will happen to this country if Obama and the Socialists aren't stopped very soon.

    Probably the most recent close parallel is Cuba, after it was taken over by Castro. Look at what is already happening in this country,

    investors no longer have faith in the Banking, Housing, or Automotive Industries, which are now being propped up for a short time only by the government, and will meltdown when the bailouts stop, with the government then taking them over, and the stock and bond markets are in free-fall. Who would want to invest in this climate?

    Investors and business owners can already see what the future looks like with Obama and the Socialists in control, and they are responding to it right now, their actions constitute a vote of no confidence, they're voting with their feet, getting out of the markets, laying off workers, moving jobs overseas. With no investors, and higher taxes, businesses and service industries cut back, close, or move overseas, causing mass unemployment. Before long, shortages of products and higher prices will begin. Looks like the Medical Profession is next in line. The wealthy investors, business owners, engineers, doctors, etc. will cut their losses and move to a more welcoming country.With mass unemployment, a destroyed financial system, loss of the tax base, etc., where will the money come from to fund this new socialism, or provide a strong military to defend against the countries that have been waiting for America to show significant weakness? With the military retreats and cutbacks planned by this administration, and the damage to our economy, our allies will realize that we cannot be relied upon to defend them from attack, and form new alliances, excluding us. If we cannot provide foreign aid to the countries we've been helping, many of them may fall to communism or hardline Islamic domination, and if we are attacked, we may be going it alone, with countries that might normally support us deciding that if we've sunk so low, it may be best if we lose. Look at Cuba, see the future.

  48. Let them fail and get them off the backs of the American people.

    Obama's been in office roughly a month and he's already trampled on the Constitution by bombing Pakistan without declaring war and he continues the Bush bailout. Thanks for nothing.

  49. The man who petitioned Obama for the position of Commerce Secretary NH Senator Judd Gregg is interesting. Judd Gregg's family money trekked through a long journey via Indian Head Bank (receiving 100% on the $ for unsecured loans on the PSNH bankruptcy thanks to Bankruptcy Court Judge Yankos) through various and sundry bank buyouts--finishing in either BOA or Citicorp, I think. You'd have to track it. I don't have the time. What are the Gregg children employed at/in?

  50. Hey, Obama!

    Please buy 38% equity in ME at 35% premium! - I could use the "capital infusion".

  51. Ok is this the last we will hear that Citigroup needs capital? Somehow I doubt it. Nationalize the bank clean up its balance sheet and get it over and done with. This drip, drip, drip is precisely what will extend the recession we find ourselves in.

    Also if they are "too big to fail" why were they allowed to be so reckless with the company?

  52. RHE and Mariano are right - receivership.

  53. "This transaction — which requires no additional investment from U.S. taxpayers — does not change Citi’s strategy, operations or governance."

    If Citi's CEO really said this, this guy should be taken out and caned for even thinking something so profoundly stupid, much less actually saying it.

  54. I really do not care about the emergency steps the government takes on the banks. There will be some mistakes, and trail and error corrections.

    I want to see a new, more responsible financial system and regulatory system.

    Investment banking is an essential function for a growth-oriented market economy, but no investment bank should be allowed to make trading, especially of exotic derivatives, a more important profit center than underwriting securities and advising on mergers and acquisitions.

    Any entity that makes corporate loans should be brought under bank regulations governing corporate loans. Hedge funds must be regulated.

    Bonuses, legitimate as a concept, are obnoxious in practice because they are based on short-term and manipulated results. Legitimate bonuses must be based on long term performance and must have claw-back provisions.

    Better yet, set up a new regulatory system based on product-type, not on type of corporation. This will enable regulators to be expert and vigilant.

    If complex derivatives are still allowed, they should be sold on standard contracts that specify exactly how the rating was assessed and with guarantees of minimal performance. Buyers could be refunded or sue for false claims and promises unfulfilled for reasons of deliberate falsity, incompetence, or mismanagement. Wall St was a better place when lawyers, not MBAs, ran it.

  55. I am wonder why the Obama Administration has totally ignored something like US$10 to US$16 -trillion- (this is not a misprint) in liquidity held by American citizens and businesses outside the USA at Offshore Financial Centers (OFC's) as a means to reduce the tax burden, a practice that is done through legal tax loopholes in the Internal Revenue Code. Why don't the Obama Administration either 1) fix the system of taxation so this "offshored" money returns on an incentive basis or 2) offer a major tax amnesty program to return the money back to the USA? That US$10 to US$16 trillion returned to the USA would provide a -gigantic- liquidity boost, so big that our economic crisis would end literally in a matter of -days-.

    However, such a plan should be paired with massive reforms in the equities market, especially raising the minimum margin requirements from 5% to at least 15%, which will drive out the "make a fast buck" speculators in favor of longer term gains. The experience with the price of crude oil zooming up and down like the express elevator at the Empire State Building in 2008 should have been a warning sign such speculation ends up hurting everybody except the traders.

  56. Looks like nationalization in small doses to me. So we now have a national banking system (BofA, Citi), national insurance company (AIG), national mortgage companies (Fannie, Freddie). Now, we just need to get student loans under control (Sallie) and credit carts (how about American Express). This would give us the core of a nice government owned financial system that always works, has nice fees, nice interest rates, etc.
    Pandit thinks he's still in charge? Well, if it makes him perform well, let him think that he is.

  57. Has anyone noticed how the most powerful proponent for the minimum regulation of Wall Street for the last 25 years, from Clinton's Treasury Secretary to chief Economic adviser to candidates Kerry and Obama, and until recently chief honcho at Citigroup, Robert Rubin, has been allowed to slink unscathed off the stage?

  58. Why don't we just take over the bank altogether and get it over with. Because it seems like this bank will never be able to hold it's own and that is a fact.

  59. This is still a massive zombie bank. Nationalize it and sell off the pieces or welcome to 1990s Japan 2.0.

  60. And the foxes are still running the hen house? This is the best talent? Ludicrous! Why hasn't the management layer been reomved with no Golden Parachute and sent to jail for fraud? Put chimpanzees in charge. All they require is lots of food and a place to sleep -- they don't shop at Tiffany's or Sothbey's.

    Remember Nancy R's "Just say no." Exactly what is going on -- where is the restructuring - closing branches, selling giant office buildings?

    When will someon simply admit it is all hot air, but that money has been diverted -- sometimes to things that have value. Assigning responsibility and prosecuting people for fraud, seizing their assets as in Enron -- and Wall St. brokers who pushed the stock should be implicated in this -- woiuld go a long way towards insuring that this kind behaviour doesn't occur again in a few years. Let's see therre was the S&L crisis-- some Bush person was involved there, Enron, and now the Big Chill. Whatever. The teenagers who are in charge in DC prefer the lobbyist paid for perks to adult behaviour.

  61. Too big to fail means the bank is too big and the regulators should've broken them up years ago. No business should be too big to fail. There should be no more Citibanks. No more Chases. No more Bank of Americas. Each of these should be broken up, and everyone should be allowed to collapse if they so manage.

  62. Obama could insist there is no movement to nationalize the banks, but action speaks louder than words. He is engaged in Orwellian doublespeak, which ironically Liberal Democrats generally deny they ever do themselves but accuse Republicans of doing.

    CEO Vikram Pandit is thoroughly incompetent; does anyone deny this? Nevertheless, he and the cohorts he brought in are allowed to keep their jobs, and are likely overpaid: WHY? Is this supposed to instill confidence in Citigroup?

    At this point, is Citigroup -- as well as others, like Bank of America -- still considered too big to fail?

  63. Hmm, why doesn't the government wait until the results of the so-called "stress test" applicable to Citigroup and other banks are known? If Citigroup fails the test and does not have the ability to survive, it would be a very poor investment decision and a waste of our taxpayer dollars.

  64. To the Honorable President of the United States,

    Mr. President, this bank is NOT to big to fail. This bank for years has been a near criminal enterprise, if not in fact.

    This bank has repudiated all of its agreements and fraudulently charged exceedingly and ever increasing interest rates. Now you are investing in this enterprise and then at the same time begging for more foreign ownership.

    Nope. The American people have had enough of this bank and its minions. That means all of its shareholders will have to bear the brunt of failure...not the American Treasury.

    Close the books on this institution. It has failed, it cannot be resucitated, and it is high time to flush the toliet. Send a message to the other failed banks that cleaning up their balance sheets is not the purview of the American taxpayer. Make it So!

  65. What happened to the stress test? Sudden heart attack?

    I though the President was going to be very clear on conditions before releasing funds.

    The title says: "US agrees..." Who? I want names so, we, the people, can hold them responsible.

  66. this move smells really bad - the corpse of city is cold and dead and getting ripe and obama is forcing the taxpayer to give it wallet to common stock resuscitation. its like the old monty python rountine about the dead parrot - its an ex-bank, its deceased, its stiff as a board, - obama says , no its not, its just sleeping. sorry mate, its dead, not just really dead but really most sincerly dead.

  67. So, we the taxpayer paid $45b for 36% of Citi that is now worth less than $10b. What a deal we are getting.

  68. My, my, my! Just look how much the word 'nationalize' has cost us in jobs and taxes. Right wing propaganda has really changed our language: regulate, welfare, government, the Democrat Party (remember, it used to be the Democratic Party). Then of course there was the Nixonian 'at this point in time' not to mention 'importantly' as an adjective as in 'more importantly'. Enough is enough! Nationalize, temporarily, those banks that need it. And 'more importantly' dismember some of the monsters they have become.

  69. I agree with Adam G, #15. For all the money we as taxpayers have given the banks, for all their foul management and blind greed, what happens when the employment has closed around the country as it has since September and one is currently out of work. It is feasting time for the banks if credit card payments are late - they move those rates up to 30% in a flash - for being a month late with payments. Don't think for a second the banks don't realize how much money they can get out of us, credit card holders, now. How is this justified - the banks put us into this mess and now we are to be slaughtered? Let Citi fail.

  70. let me thnk again... govt paid several times (remember stock price without bailout) the price of citibank assets and yet it gets 40% stake?

    and top management stays :)

  71. "Yet it does little to address the bank's underlying problem,"

    Exactly. How does pumping money while not addressing the underlying problem constitute good policy? It's frankly outrageous, cowardly and corrupt. We now own Citigroup. Without our money, THEY WOULD CERTAINLY COLLAPSE. The "stress test" concept is insulting, because it will not be transparent and based on verifiable numbers. It's insulting. We must force Obama and Geithner to find the courage and the integrity to represent OUR INTERESTS, NOT THE INTERESTS OF THE EXECUTIVES OR SENIOR BOND HOLDERS. Only receivership will give us the transparent access to the books that we unquestionably deserve. THEN, and only then, can we deal with the underlying problem of the toxic assets, and wipe them out, while forcing senior bond holders to take haircuts on their investments, instead of dumping all of the costs on taxpayers.

  72. The onliest bank that seems to be 1/2-way stable is Wells Fargo. That figures. In the ol' west, it had to survive under the harshest conditions: bandits robbing their stage coaches, passengers kidnapped for ransom, offices blown up to get at miners' gold in the safe.

    Pres. Obama should turn all the "too big to fail" banks over to Wells Fargo. Let them hire a "super-sheriff" who will form a posse of citizens to string all the thieves up. That will learn them.

    Hell, Prez, what you need is a new sheriff in town!

  73. Meanwhile, while at one hand the banks and financial institutions are getting bailed out to the tune of $trillion; they are busily lobbying Congress to prevent them from changing the bankruptcy laws to allow modifications of primary home mortgages. There are some in the House and Senate saying that changing the law "will hurt mortgage lenders". This comment cam from a DEMOCRATIC Senator and some leading DEMOCRATS in the House; along with some of their REPUBLICAN allies. The last report on this by the AP yesterday was that the only modification that might get passed in the housing bill will be to subprime mortgages only.

    As the taxpayers are taking over these banks debt slowly and leaving them to go about as business as usual; the average American citizens is going to end up with nothing and the banks with everything. Do you honestly think that when Congress tries to re-regulate the financial industry that they will succeed? Congress is so heavily influenced by the financial industry that whatever bill comes out will be even weaker than what is in place now. In the end, the financial institutions will get away with some sees as a criminal act and the American citizen will be holding the bag.

  74. Preferred Shares in Citibank Par value 50 such as C-I were trading at $10.00 yesterday. Now they are trading at $18.

    Citibank is not getting any more money. Tier 1 capital used to be the needed measure. TCE is something the government dreamed up because it was dissatisfied with its TARP investment and to justify stealing from the common shareholders. As a cover The Government is also letting other preferred shareholders steal from the common shareholders.

    Preferred dividends in Citibank are not cumulative and need not be paid so long as common dividends are not being paid. Citibank should have simply suspended all common dividends and stopped paying the preferred. This is what contract law prescribed. I guess the law does not matter.

    Citibank is not getting one additional dollar. The government is just taking from one class of shareholder and giving to another. And STUPID financial newscasters call this a "bailout". The government's TARP investment of preferred if valued similarly to the other preferred stock was worth about 20 cents on the dollar.

    The Fifth Amendment to the Constitution says 'nor shall private property be taken for public use, without just compensation.'

    I am a Citibank shareholder and I feel my Fifth Amendment rights have been violated.

    Meredith Whitney is correct. Bank stock is uninvestable. The stock market is uninvestable, at least so long as Geithner is there.

    And Pandit does not care about shareholders. All he wants is to retain his cushy job. Any stock options he has will probably be rewritten at a $1.00 strike price.

    The loss in goodwill is being using to justify their theft. I guess the reason the government does not want to stop the manipulative shorts is that they are in cahoots with them. Drive down the stock price. Then you can use this to insist that goodwill be written down.

    The manipulative shorts are the government's henchmen.

  75. It appears unfair to expect that private investors have significant resources to invest more of equity capital in the banks- particularly when the banks report such huge losses.Private investors run away when they see that their monies go into bottomless pits.Private investors have neither the resources nor the intention to invest more.

    Banks like Citi thought that their liabilities (read bonds and deposits ) were free equity ,felt no obligation to repay them or keep them in trust, should in the normal course be punished by liquidation- saving the banks is a prime need in public interest. The least the Government should do is to own the banks by exchanging all that it has paid so far into common voting shares and have the banks run by a group of responsible people from domestic communities.

    Banks do not need any more creative intelligence or fancy products or large corporates to interact with. It needs commoners to understand the people problem and start basic commercial lending- home loans, small business loans etc et el.They have to go back to the fundamentals which can only be done by diligent people and not by business graduates from large schools. It is time to recruit basic graduates and train and employ them to do basic lending and the banks cannot be revived any other way.

  76. Government has to cut exagerate salaries and wages to all executives, directors and managers in order to

    really demonstrate responsibility.

  77. At this point, why should anyone believe Citi will not ultimately collapse? We is the government stringing this out at taxpayer expense?

  78. So the government bought preferred shares when they were higher and worth more. Now the price has gone down and they want to convert it to common stock at a price the "press" calls a "premium" to another days close.
    Preferred shares collect a dividend before common shares; 9%. That's a return to die for. By converting to common shares the government forgoes their return for loaning the money to the bank. The government then puts the shares back in the marketplace where old money will buy back the shares of common stock indirectly the government just paid a higher price for and sold at a discount. The banks will rebound the old money will then own the banks like they always have and the US government with tax payers get nothing back.

    Oh I almost forgot taxpayers get the fake promise of liquidity. Banks will not lend when real interest rates are negative. Printing more money like government is doing with there fiscal spending will make interest rates more negative.

    In a negative real interest rate environment,it pays to borrow money not lend. It's funny how the government is doing the lending and the private institutions are borrowing.

    Who's really in charge here?

  79. For way, way too long, we allowed ourselves to be lulled into complacency by the siren songs of the free market zealots and the mythology that there is such a thing as a "bank that is too big to fail."

    The phrase is a lie--and a damnable one, at that.

    The sheer size of these banks--which in earlier, more prudent times would have never been acceptable to the anti-trust division of the Justice Department--did not mean that they could not fail.

    But that we could not afford to let them fail.

    And that is why we can not after this crisis passes--allow them to survive as the bloated behemoths that they are. It's time to resurrect Teddy Roosevelt's trust busters.

  80. Nationalize them and install new management.

  81. Who are the Citigroup shareholders? How many people are direct or indirect investors? How many of them know it?

  82. This is it America, you are paying for your own destruction.

    The banks are bleeding and bleeding an already critically wounded patient.

    There will be no miraculous recovery.

  83. Please stop the charade. This is awful. The Obama administration needs to bite the bullet and take over these cesspools of corruption and incompetence: Citigroup, Bank of America and the other zombie institutions clean and break them up. Then full criminal investigations should follow. There has been massive fraud committed by these arrogant so called masters of the universe, and until there is accountability our system will continue to rot.

  84. This smacks of more cronyism. Until the President dumps the Paulson/Summers/Rubin cabal that initiated or fostered the problem under Bill Clinton, and "W" the U.S. taxpayer will continue to bail out their buddies in the "too big to fail" banks.

    Our great grandchildren will be paying for this short-sighted manipulation that failingly tried to stop a market correction that is long overdue.

    PLEASE contact your Representative and Senators in Congress. Let them know we taxpayers don't want more bailout for cronies until the people who caused this mess by deregulating the banks are on a train (not private jet) our of Washington. Summers, Rubin and Paulson must GO!

  85. Reading the comments posted here I am surprised at how narrow minded so many of them are. Do you all realize what is at stake if citibank and the other major financial institutions fail? The answer is: absolutely everything! All of our jobs, the luxuries we all enjoy, the entire US economy. A healthy credit system is the lifeblood of our economy. Without the ability to borrow money all companies, large and small, will eventually fail. Whether the current credit crisis was caused by greedy bankers, foolish regulators or short sighted American consumers does not matter. If we punish the bankers by allowing the financial institutions to collapse we will all suffer. If we nationalize the banks we run the very serious risk of driving investors away and further weakening our credit system. Simply put, there are no easy answers. Our economy is extremely complex and everything is interconnected. Whether we like it or not, our fate depends on the financial health of these banks.

    As Americans, we have been living at the top of the worldwide food-chain for decades and there is no guarantee that that will continue. Our standard of living is a privilege, not a right. We are not entitled to anything and unless we stop all of the finger pointing and recognize that we are all in this together we will collapse as a nation.

  86. While being easily willing to admit that it's been a while since Economics 101 was a part of my life, this caught my eye, "Be responsible, live within your means, invest in your children's & family's future, then have the Federal Reserve create another bubble & ROB YOU BLIND." It's funny because yes, as broke as the Reagan years left me (how's that for dating your participation in this thing?), seems to me that consumer debt was rising to, and if this thing eats our lunch as some seem inclined to let it do, well, the Kids that everyone likes to talk about, that some love to hide the sheer inadequacy of their decrepit mewlings behind, yes, Bobby Jindel, I mean you, well, there won't be anything for them anyway. Most likely.

  87. Dear Kevin,

    The money that the Federal government is pouring into these criminal, insolvent banks could have gone to feeding and sheltering it's citizens in the coming depression. Now, people's very ability to even survive will be at stake because there is NO MORE MONEY!!!!!!!!!!

  88. This is an incredible gamble, both financially (with taxpayer money) and politically for the Obama administration. Any and all politicians, including the president, who have taken contributions from the financial industry should be required to recuse themselves from giving away taxpayer dollars to these failed institutions. The ties between our government and the financial industry demonstrate an essential ethical weakness in our capitalistic/democratic system.

    They should no longer be called banks since they don't have any money and don't lend any money. They are just shells of bankrupt large companies and the administration is rewarding people at the top of these institutions who facilitated that failure.

  89. We are on the edge of a precipice the likes which has never been seen before in history. This IS the big one, a depression that is far worse that the crash of 1929 and *everything* we are doing right now will make it worse. I model these things. Take a look at GDP and debt, just to take one trend line. Throughout history, whenever debt is greater than 50% of GDP we experience a "recession". Once before, in our history, we had a debt level of 100% of GDP. It is, today, nearly 200% of GDP. From 2000 to 2008, personal and government debt grew from 48% (meaning we were in a minor recession when Bush took office) to 190% of GDP. Since the first of this year, we have added 20% to that! Worse, our foreign policy for the past eight years, continuing right up to today, has been based on a global economy, where politicians trade jobs, factories, and technology for acquiescence or support - literally buying friends. As of 2003, the trend lines show that we had "outsourced" or displaced, by foreign "guest workers", and in the process discouraged an entire generation of our best college students from majoring in mathematics, engineering or the sciences, we have squandered so much of our basic technical knowledge, that we lack the very means to invent our way out of any calamity ... and THIS IS a calamity. Worse, banks and financial institutions are inner-connected to such a degree that the collapse of one major institution will lead to other banks and financial institutions collapsing like dominos. It is problematic whether one of two major German banks, or a the last major private British bank, or one of our banks, will start this, but one will. The conservative governments' (and Obama is a financial conservative) refusal to take over these banks leaves them completely exposed. The fools in Washington and Berlin and London and Hong Kong actually think they will have time, that existing mechanisms, will enable them to detect a major failure in time and prevent it's spread. They do not and the result will be, likely in late March, a complete economic collapse that has a better than even chance of destroying this country. My bet is that Geithner is so incompetent that he doesn't even see this coming and, even if we manage to dodge that bullet, there will be another one and another that we will not avoid. Now, this is a world wide mess, so governments across the globe are going to fail. Nearly every government in Eastern Europe, the Balkans, will collapse into anarchy, as will Russia, Germany, Britain, France, China... Out of this mess, you will see wars and dictators and demigods, starvation, disease, and death on a level never experienced before in human history.
    - Mike Brooks 02/27/2009

  90. While a forced majority of independent directors is great news - part from being mere common sense - one item was notably absent in the article describing the quid pro quo of the deal: an agreement on how Citi was going to lend going forward.

    I do hope there was an agreement of this kind (as opposed to praying/hoping/assuming...)

    And there was even a bit of humor: investors worried about Citi's performance now that the U.S. has heavily invested in it. And this is because - why?

    You could read for years that Citi was viewed as a rudderless behemoth, too large to manage, too much into everything to do any one thing well. And investors worry about performance NOW. That's funny. And it explains why Citi is where it is. Shareholders asleep at the wheel.

  91. "Investors are also worried that Citigroup’s performance could suffer."

    They lost $28 billion in 2008. Unless the government forces them to buy GM, they can't do much worse.

  92. The article asserts that “Investors are also worried that Citigroup’s performance could suffer”. That is like a drunk who has just crashed his car worrying that the tow truck operator might be a poor driver. Must we be subjected to this free-market propaganda, even when it is clearly delusional?

  93. for starters why does the leader (VP) of citi after all the mis adventure keep his job?

  94. The Obama economic team I fear is becoming the Japenese version of Bernie Madoff. Keep dishing us this song and dance. Everyone knows this is money thrown out the door just desperately trying to keep the illusion that free market capitalism works. Citibank raised my credit cards rates from 4-15%, and as I am a grad student, I had a balance and no income to pay it off. I had to choose to opt out, which damaged my credit. Had I ever been late? overlimit? No. the fact that my tax dollars are helping these mafia Madoffs enrages me. Nationalize now!

  95. I used to work for Citibank.

    This is their comuppence. They've treated their non-executive staff like trash for years.

    I hope the upper management and executives all end up in homeless shelters. Be sure they take Sanford Weill and John Reed with them. In fact, put Reed and Weill first in line, at the soup kitchen.

  96. Imagine, buy a share of Citi for the equivalent of 4 first class postage stamps, and get some change.

  97. What I find most insulting about this whole thing is, not only do they recieve a multi-billion dollar bailout (that we'll be paying for), they also have the gall to simultaneously raise the APR on customers across the board. It's criminal!

  98. there are two sets of rules in our country.

    one set is for them, and the other is for us.

    and the winner is .....?

  99. Hmmmm..who worked out this horrendous deal??? Was it Geithner; or Rubin; or, perhaps Greenspan; I can see Weill laughing his pants off...oh by the way, what ever happened to Reed??? Probably hiding with millions (in secret UBS accounts) somewhere in the Pacific.

    White collar crime does pay after all...

  100. Insist on Citi coming clean and stop this agonizing march to failure. We will know when they have been honest when investors trust to put their money in their hands. It does absolutely no good to not acknowledge they still have rotten debts on their books.

    As to credit card charges, we need to demand that a USURY law to protect the very people they need to have trust again be effective NOW.Not 2010.

  101. I am getting tired of people calling Citigroup a zombie bank, a trash bank. a useless bank. Enough is enough. Before this crisis they were the biggest company (in capital terms) in the world. They revolutionized checking accounts, CODs, ATMs, and theirs and other banks' loans allowed you to buy a house.

    There ARE people out there that still want to buy a house. They can't do that without a loan. To the people who want these banks to die, you obviously don't understand the need for liquidity in an economic system.

    And those who want to wipe out all shareholders? My mother is an employee, mid-level. Part of her pay IS her stock, and she is not allowed, by company law, to sell it. Can you save her further heartbreak and consider allowing her to keep the pay in stock that she earned from a long lifetime of work? It's called an incentive, people. An incentive for her and other employees to keep Citigroup as a working, viable company, with stock that has value.

  102. Can we at least get a list of the major shareholders of Citigroup for our money? I think we should at least get to know who it is we are bailing out!

  103. It is so very reassuring to learn that there is "no change in Citi's strategy, operations, or governance" (see press release). I guess that means that we can expect Citi to continue to lose billions of dollars annually -- just by following the same strategy, with the same operations, and under the same governance as before! Yes, that will make everyone feel so much better.

  104. The problem we face is that the economy will not get better but will go down even further. We have a problem we third rate communication system for the US as the major tier one providers only thought of spending on mergers and not on their primary mission. They could of improved the communication and instead we have not enough bandwidth at different periods of day. This is at the level of economy today and the new ideas of cloud computing can't operate as there is not enough bandwidth for this function. We can thank them for helping to put the US in these problem. The President inherited this problem and the major tier one providers now have to spend billions of dollars which they used to pay for the mergers. The question do they have the cash to bring us out of the problem of their making. There ads indicate that they have enough bandwidth but the Internet shows that they are short every day. We are running at 100% of capacity at this level of the economy. Maybe they can explain why they spend the money on mergers instead of building of the communication system instead allowing it to become a third rate level as we now have. This is also the limiting factor which we face in our communication and also why rural America will have a better communication system then the major cities have. These are questions that should ask them so we can improve the communication system so it can handle the economy which we need grow to. This will allow stimulus package to work unless they tell us they have no money to bring the communication to a first rate because they spent all their money on mergers. Then we should also ask what was the FCC doing during this period. These are questions we should ask as this will tell what to expect from the stress test on the banks. These are the proper questions we must ask as will answer what will happen to our economy and also the banks. I really don't know the answers but to solve any problems you must ask the right questions as this will solve the problem and I think this will come away to move forward for our economy.

  105. I see everyone complaining, but no answers that would satisfy American taxpayers. But the answer is rather simple.

    Everyone with a Citi credit card stops making payments. The bank would be insolvent in weeks, if not days. The federal government would be forced to take over Citi. And we don't start paying our credit cards until all the top management are gone, the shareholders have been wiped out and the Obama administration clearly understands that we are watching and want these stupid smoke and mirrors activities to stop.

    We have the INTERNET, the single most powerful voice in the country. Now, let's learn how to use it to create change we really can believe in.

  106. Most of us have heard the story of King Solomon, a man known for his wisdom and his discernment in administering justice. One account of his skill comes to us in a story in which we have three archetypes: the greedy, dishonest woman; the loving mother, and the wise king. Each woman claims ownership of a baby and Solomon must decide who is the true parent. Solomon says he will split the child down the middle and give each one half. The real mother, not wanting her child to be harmed, tells Solomon to give the child to the (greedy, dishonest) woman. Solomon sees this as an act of love and knows she is the authentic mother.

    The story of Solomon conveys universal themes relevant to today. Imagine Obama as Solomon; the Economy as the baby; the greedy, dishonest claiming to be parent, the Banks; and the compassionate, authentic creator of the child as We The People.

    The Banks would sooner see our Economy destroyed than give up control of its interests. And We The People must relinquish our Economy to the greedy and dishonest in order to save it. Right now, it looks like Obama is turning over the baby to the wrong parent. Where oh where is his wisdom and discernment?

  107. By trading preferred stock for common stock, in a failing enterprise, the effect is to bail out current owners of preferred stock, i.e., those whose investment should fail, with taxpayers monies. This is true of course only if Citi fails completely, but without changes in plans or leadership, I won't bet on its survival. Sticking it to the taxpayer once again. Disgusting.

  108. At this point we need the Treasury Department to value realistically the toxic assets of all major banks, certainly prior to any further approved bailout money.

  109. I don't know how many people understand this latest sellout of taxpayers' money by the treasury.

    Instead of holding the original preferred stocks, which will give the taxpayers dividends, and higher claim of assets in case citi go bankrupt (a.k.a Buffett's style of investment with Goldman, though at less favorite terms), the government today elects to convert the preferred stocks to common stocks at a lose for $3.25 (vs citi today price of $1.60). Furthermore, the common stock is not paying any dividends, and will rank lower in seniority in claim during bankruptcy.

    What a raw deal to the taxpayers. What a gift to the shareholders and private investors.

    Where is Hank Paulson? George Bush, please come back!

  110. Why is it so hard to understand that giving the same inept management more money is sheer madness?

    Unless the management goes and fresh blood takes over - and I don't mean more of the same type of greedy idiots - there is no hope for them to get it right and maintain a creditable business.



  111. Let them sink. Distribute the *billions* to the real heroes in all of this: *taxpaying*, *hardworking*, *consumers*.

    What happened to the much trumpeted, long running Corporate America "survival of the fittest" slogan?

  112. So instead of getting us out of Iraq in 16 months, which is what Obama promised on the campaign trail, we're talking three years. THREE YEARS!! That's the agreement the Bush administration signed with Iraq months ago. So Obama is simply following through on Bush's administration.

    What a joke!! Just another reminder that what candidates say on the campaign trail and what they do when it's time to put their words into deeds are two different things.

    The military industrial complex wins again!!!

  113. Agree that the basic problem in the US is the financial institutions are intertwined and if Citigroup were to fail this would creat credit crisis far, far worse than the Lehman fall.

    But - although I am generally a conservative - the real problem is that we have no manufacturing, no factories, no real production of merchandise.

    We cant have enough jobs or money if we import everything for a fraction of the price of unit production in America. We are sending our money to our foreign partners that manufacture everything in the US who then lend the money back to us -- creating a massive accounts payable to our foreign partners. And we have no good jobs since we send everything to be manufactured out of the USA.

    We dont manufacture (only assemble) all computers in the US. We dont manufacture cars in the US - its mainly assembling them (and even GM & Chrysler). Textiles and clothing are manufactured out of the US. We dont manufacture in the US even the food we eat.

    The only answer is Quotas - we must limit the amounts of imports allowed to come into the country. This will spur competition and technology in the US.

    Yes - this may cause inflation but inflation, high interest rates, and rationing is on its way anyways because of the run on the Dollar which is on its way (look at East Europe) and its coming soon.

  114. Outrageous that anyone from management is keeping his or her job. Fire them all and ban them from the securities business or serving as a director or officer of a public company for life in the US. Heads must roll. ALL of them.

  115. ' . . .the government will increase it's stake to 36%, . . ." isn't that, the government will increase the tax-payer's stake to 36%? Where did the government suddenly get money?

    When are the people going to wake-up and insist on stopping these massive give-aways to the failed thieves, or to insist on following the honest workable Swedish model, or ot insist on just nationalizing for life all of these corrupt units?

    The GDP as reported in the NYTs just shrank more than expected and everyone is faux agahst, yet they cannot be so stupid to not know that the United States in falling deeper into a Depression that has been going on now for a year.

  116. Making the bail outs palatable by announcing increments of tens of billions is like selling heaven to a sinner for a mite. It only works as a belief, an illusion, a hallucination.
    The reality is that responsibility has been transferred as credit, to be paid at a later date by those who have been injured by the sinner.

  117. if i wanted to be a shareholder of citi i would have bought the stock myself. i suppose the reason i didn't buy any stock is because i'd be better off throwing my money in a dumpster and lighting it on fire. citi is done for, and our inept politicians are taking the rest of us along for the ride. where in the constitution does it even allow the feds to take my money and invest it in a private company against my will? can't seem to find that language anywhere.

  118. I hail from India.I am surprised at the fears of many Americans on Nationalisation of loss making Banks.In this connection,I would like to cite the example of India.In 1969,against vehement protests,the then prime minister,Mrs Indira Gandhi nationalised majority of the private banks,and she nationalised the remaining major private banks in 1980.The present world economic crisis has not affected them.Whereas one of the biggest private bank,which blindly followed the American business practices,giving a go bye to sound and basic banking principles is fast losing the confidence of the peopls.In addition during the last decade a few private banks which were about to be closed down were merged with nationalised banks to protect the customers'money.I think banking experts in the U.S should study the Indian example and see whether it works out in Ameerica.Lakshmi kanth,Overlandpark.

  119. It looks like Citigroup wrote the agreement and had Geithner sign it. It's obvious Geithner is in the tank for the big banks and this agreement proves it, as if there were any doubt.

    The most critical cabinet position at this time is Secretary of the Treasury. President Obama, are you listening? Admit you made a big mistake and correct it before we are all financially ruined.

  120. Whoopie! I expect my mailbox to be full of offers of a CITIBANK credit card (at 19+ percent interest.) Fortunately I learned from the jump in credit czrd interest in the 70's to remain paid-up.

  121. I find it hard to believe that this is the same country that threw Martha Stewart in jail.

  122. How strange a man's not quitted of all hope,

    who on and on to shallow stuff adheres, whose greedy

    hands for hidden treasure grope, and who is glad when

    any worm appears. (Faust)

    No Society is safe in the hands of its clever people.

    (Lancelot Hogben, 1895)

  123. When our economy slows down big government is necessary to get the wheels moving again. But when times are good government should step back and allow the booming businesses to float the government with an equal boom in tax income.

    Capitalism will inflate itself until a bust and then start over. This is certainly not the last economic downturn we'll see. Innovation will surely create job loss in the future. This is a natural cycle by which Republicans are out of touch with the current state of affairs, and Democrats will be out of touch in the future. Must they cling to their ideologies?

    "State interference is an evil, where it cannot be shown to be a good." - Oliver Wendell Holmes Jr

  124. can someone explain how the 3.25 price tag is determined, obviously, they back into this price point to achieve 36% ownership. What can be the justification, yesterday's close is $2.46, what could fource a preferred holder be willing to convert at higher than current market price? US government is subsidising Citi, but why other preferred holders?