Monday, November 24, 2008

Citi "Rescued". In case you haven't heard, news came in overnight that the US Gov't has agreed to bailout part 2 for Citigroup. The deal involves a $20 Billion cash infusion (on top of the $25 Billion last month), over $300 Billion in loan guarantees, and a potential additional $15 Billion kicked in by the Treasury and FDIC should Citi see further devaluation in the junk paper the gov't is guaranteeing (oh, like that won't happen). In return the taxpayers receive preferred stock with an 8% dividend, warrants if things get worse, and one less bank failure to roil the financial markets. So, who's next?
U.S. Approves Plan To Help Citigroup (NY Times)
Citigroup Faces Further Loses, Share Dilution (Bloomberg)

2 comments:

  1. pessimism is at a high, even in your comments. Sooner or later, one of these events will signal the bottom of the crisis. This could be the action that finally begins to add stability to the financial markets.

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  2. Wow. I pride myself as being optimist, and I try to keep it as positive as possible. I'm not saying that the plan won't work. I'll readily admit that I am a bit grouchy about all the taxpayer money flying out the window.
    You are correct that it is always darkest before the dawn.

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