Monday, February 23, 2009

More Bailout Money for Citigroup

Citibank. Bank of America is next.

I have been writing about these banks going down BEFORE they ran to Treasury and Hank Paulson last September. Remember? It was when John McCain took the infamous step to "suspend his campaign" for the good of the economy. And while taking the high road, McCain was laughed at in the end.

Now Citigroup needs more money. It is getting really tired and really old to continue to throw money at these financial institutions. I like many other millions of Americans are viewing this skeptically. Why? If we are going to be a capitalistic society, when managers make horrible decisions the end result is that the company goes under. This is applicable to these banks.

I have been tepid for saving these banks, but as my brother said last night, " we don't have to save them. They put themselves in this position...." Words did not ring truer.

Citigroup Inc. is in talks that could see the U.S. government take a bigger stake in the beleaguered bank, according to reports.

The Wall Street Journal said taxpayers could own as much as 40 percent of the ailing lender’s common stock. Citing sources familiar with the talks, the newspaper also said Citigroup executives hope discussions with U.S. officials will result in a government stake closer to 25 percent. The administration of President Barack Obama has not indicated whether it supports the plan, the report said.

A source familiar with the Citigroup situation told Reuters that talks were ongoing between the bank and regulators that could increase the government’s stake. The New York Times described the talks between Citigroup and U.S. regulators as “active.” read more here....

If we are owning 40% of Citibank, isn't this close to nationalization? And if so, why do we need stockholders who are benefiting from the influx of our cash? I have no problem with nationalization, with the understanding that the bank must work to get back on its feet, but let's not try to hide the real story here. WE, the taxpayers are keeping these banks afloat and since we are throwing more cash at these banks where is the money coming from? China, again?

Just open questions that need to be put on the table.

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