Late this evening (or morning now) the deal reached between the government and Citigroup became official. Rumors had been swirling all weekend, but now we find out just how far our government is willing to go to save the banks built too big to fail.
From Bloomberg News:
Of course conservatives are trying to drag out a fight to save millions of autoworkers jobs for $25 billion, but hardly a peep is heard for $306 billion in guarantees for loans and securities. Oh and a mere $20 billion of straight cash that virtually doubles the current market value of Citigroup, pegged at $20.5 billion at the end of last week. I hope this helps them save some of those 52,000 layoffs from going through, but I doubt it goes to doing good for the workers who have been punished for the executives' greed. People like Charles Prince should go to jail for their recklessness and stripped of the wealth made from the risky deals that brought misery to us all.Nov. 23 (Bloomberg) -- The U.S. government agreed to protect $306 billion of loans and securities on Citigroup Inc.‘s books against losses, as it seeks to shore up investor confidence in the bank.
Citigroup will, as a fee for the guarantee, provide preferred shares to the Treasury and Federal Deposit Insurance Corp., the regulators said in a statement. The government will also inject $20 billion into the bank from the Treasury’s $700 billion Troubled Asset Relief Program.
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