U.S. Plan to Aid Citigroup Said to Be Near Approval

[Chris]

U.S. Plan to Aid Citigroup Said to Be Near Approval

It was unclear on Sunday night exactly how the Citigroup arrangement might work. The government and Citigroup executives were combing through Citigroup’s books and trying to determine the level of losses that it would be willing to bear.

Another question is whether any additional government money for Citigroup, which has already received $25 billion under the initial rescue plan, would come from the $700 billion industry bailout that Congress approved in October or from other sources, like the Federal Reserve or the Federal Deposit Insurance Corporation.

Regulators were discussing various terms of the arrangement on Sunday, including whether the government would receive preferred stock or warrants, instruments that give holders the right to buy stock. Preferred stock would be more beneficial to taxpayers because Citigroup would pay dividends on those shares; warrants would be more attractive to Citigroup’s existing shareholders because they would not immediately dilute the value of their investments as much as preferred stock.

(more...)

The line starts here... get it while the getting's good.

[Chris]

Here's the newest headline from CNN:

U.S. government says it will provide protection for Citigroup assets and invest $20 billion, according to CNNMoney.com

NEW YORK (CNNMoney.com) -- The U.S. federal government on Sunday announced a massive rescue package for Citigroup, saying it would guarantee more than $300 billion in company assets, while injecting an additional $20 billion in capital into the embattled bank.

In exchange for the assistance, the government would get an additional $7 billion stake in Citigroup. The bank would be prohibited from paying out a dividend of more than a penny per share and would face restrictions on executive compensation.

The plan comes just days after the company's stock plummeted over fears about its exposure to toxic mortgage assets.

[Chris]

Best headline...

Citicorp to receive $306 billion fed backing + $20 billion more from Crap Sandwich


I like how they do this shit in the middle of the night when nobody's paying attention.   
 

[rich_t]

Once the Feds bailed out AIG then passed that $700 billion boondoggle to bail out the mortgage companines...

Who didn't see this coming?

I knew that once they opened that gate it would be a flood.

Any takers on how low the DOW will go in the next 6 months.  I suspect it will hit 5000 or below by then.

[djones520]

where the hell are they getting all this money from?  We keep hearing about how huge the defecit is, but they had an extra trillion dollars just sitting around for an event like this?

[Chris]

That's what chaps my ass about this.  Democrats have been complaining abut the military budget since forever, but their President voted to increase the national debt by 10% overnight by voting for this bailout.  Washington is full of idiots, and i'm out of beer.

[rich_t]

where the hell are they getting all this money from?  We keep hearing about how huge the defecit is, but they had an extra trillion dollars just sitting around for an event like this?

Check your wallet.  What is in there is the money that the Feds have kindly let you keep.

What they let you keep will be reduced during the Obama depression.