Citicorp Payback To Net US Gov $8 Billion
By irisheyes
@irisheyes (4370)
United States
March 28, 2010 9:38pm CST
If you recall, this was in many ways the worst of the bailouts. Citigroup was so wobbly that the government had to re-structure their $45 billion loan so that the US goverment bought 27% of their stock in return for $25 Billion. To the right, It proved that the feds wanted to run the US banking system & this was the worst loan of all. When the President assured that he had no itention of getting into the banking business, the opposition had a field day.
Well, Citigroup is ready to pay back and they are setting things up with the feds. The $20 billion in TARP money will be repaid and the government will be selling its shares in citigroup stock. At today's rate, it is expected to go for $33 billion. That's a net profit of $8 Billion. To further sweeten things, every major player on Wall street is offering to underwrite the deal for next to nothing in return for the prestige of handling this one.
Most economists felt the outcome of this deal would predict the success or failure of the bailouts and it's hard not to see this as a victory for the Obama administration although I'm sure some of you will. So, what do you all think of this?
3 responses
@irisheyes (4370)
• United States
29 Mar 10
Payment in full plus $8 Billion. Pretty nice interest, I'd say.
@bobmnu (8157)
• United States
29 Mar 10
The big fight that is still raging over the TARP Monies is will it be used to pay down the Debt it created? Several bill have been held up by the Republicans trying to force this issue to a head. The Law that passed Congress and signed by President Bush said that the monies paid back would go to debt reduction. It is presently being held and some administration officals have indicated that it could be used to bail out more business or spent to help the economy. If this faction wins out then the American People get shafted again.
@irisheyes (4370)
• United States
29 Mar 10
But it's starting to look as if they may not have been shafted the first time. How can they already be getting shafted again? The Citigroup buyout was one that economists thought would be an indicator of the success or failure of the entire first wave of buyouts and it appears to be ending well.
@laglen (19759)
• United States
29 Mar 10
Whether this ends well or not, I dont think the government should have been involved. If you gave me that kind of money, I would hope I could turn a profit. sheesh! I am glad that they are getting on their feet, but at what cost? What ticks me off the most, is that it is our money they like to spend and are doing it with out our consent or blessing.
