CITI: Same Lie, Different Company

see also 153 Countrywide Sweetheart Loans to Fannie and Freddie Officers

Editor’s Note: The big news is not that the government is selling the last of its shares in Citigroup, the big news is that they are telling us that this is the last of the bailout, while trillions of dollars are still out there in taxpayer money or guarantees or loans much of which still supporting Citi. We all want to believe that the pain is gone — but saying it just doesn’t make it so.

The fact remains that the a few banks started this incredible grab for power and wealth, succeeded, and now instead of being broken into pieces like Teddy Roosevelt did, there are fewer banks with more power than they ever had. This is not going unnoticed around the world. Obama is presiding over another disaster and this time he won’t be able to blame Bush.

Treasury to Sell Last of Its Stake in Citigroup

Vikram S. Pandit, chief executive of Citigroup, thanked the Treasury on Monday for its support.Jin Lee/Bloomberg NewsVikram S. Pandit, chief executive of Citigroup, thanked the Treasury on Monday for its support.

8:30 p.m. | Updated

Citigroup is finally wriggling free of Uncle Sam.

Two years after the financial giant was bailed out by the federal government, the United States Treasury is selling its remaining shares in the company.

The move, announced late Monday, largely ends the remarkable federal rescue of Citigroup, whose downfall came to symbolize all that was wrong with Wall Street. It also represents another milestone in the postbailout era.

While the government would retain a vestigial interest in Citigroup after the offering, the sale would effectively free the giant company from modest federal pay restrictions and lift a cloud that has hung over its chief executive, Vikram S. Pandit. “We are very appreciative of the support provided by the U.S.T. during the financial crisis,” the company said in a statement, referring to the United States Treasury.

Emboldened by strong investor interest and recent initial public offering of General Motors, another bailed-out giant, the Treasury announced Monday evening that it would start selling 2.4 billion shares of Citigroup common stock. The deal was expected to be priced at $4.35 a share, a 2 percent discount, according to a person briefed on the transaction who asked for anonymity because the deal had not yet closed. All told, that means that taxpayers will reap about a $12 billion profit on the Treasury’s multibillion-dollar investment in Citigroup.

While the final accounting of the government broader bailouts will not be known for years, major banks and the Detroit automakers have emerged from the rescues far faster than many had expected. The government remains deeply entangled in the mortgage giants Fannie Mae and Freddie Mac, but officials are mapping out plans to wind down the investment in the American International Group, possibly through a stock offering early next year. [Editor’s Note: This is bullcrap. It misleads the reader into thinking that we are making progress when we are not.]

Proceeds from the Citigroup sale would be the single biggest profit yet from the government bailout programs. Few saw such a quick windfall two years ago. Many doubted the wisdom of using taxpayers’ money to rescue Citigroup, which was devastated when the home mortgage market imploded. Citigroup was the biggest user of several of emergency support programs that the Federal Reserve put in place during the crisis.

But federal officials, worried that the failure of Citigroup might cascade through the financial system, ended up injecting $45 billion into the company in the autumn of 2008, and creating an enormous insurance policy covering potential losses on more than $301 billion of real estate assets. [Editor’s Note: More bullcrap: Citigroup went to the Fed window 174 times over 13 months taking down hundreds of billions in “loans” on non-existent assets.]

In return, the government assumed ownership of nearly a third of Citigroup. It also secured a small piece of potential profits through securities known as warrants.

After several big banks repaid their bailout funds, Citigroup officials began pressing the Treasury to allow their company to do the same. Last December, Citigroup was allowed to return $20 billion of its bailout funds, and the government announced plans to unwind its remaining $25 billion common stock investment.

A bungled stock sale forced the Treasury Department to delay its initial offering for Citigroup until April, when the government began to sell its nearly 7.7 billion shares. Through October, the government had sold about 5.3 billion shares to private investors, at an average price of just over $4 apiece. With dividends and other payments, that meant the government had fully recouped its initial $45 billion investment.

As interest in the Citigroup shares picked up, Treasury officials began plotting a larger stock offering for several months but kept bank officials in the dark about their plans. On Monday morning, the Treasury informed Citigroup that it planned to sell the remaining 2.4 billion shares all at once. Morgan Stanley, which had handled the previous stock sales, is leading the offering.

7 Responses

  1. I have been reading this blog almost daily for over a year. Thanks to everyone! Thanks to you Neil.
    Important Reuters article about LPS Dec 6

  2. Hmmmm — Citigroup acquired Ameriquest Mortgage Company and Argent Mortgage – and other subsidiaries. But, Citigroup settled – as they are the successor in interest – in the massive class action — In Re Ameriquest – in which attorneys reaped over 7 million and class members are being paid – $20 or $30 in the settlement — with no action/recourse for foreclosure fraud.

    Neat little package Citigroup — what else have you concealed???. What else is up your sleeve???

  3. The government continues to lie to us as Neil pointed out. Do not believe them either! Remember your roots–always question authority. Sheep do not think, they just follow. Also remember, do not believe any of the political parties either. They are liars also. Analyze everything with your own brain. Do not adhere to any party. Objectivity and the ability to think will save you. Don’t believe the F!$%&*+ media either. Many are owned by people who do not want you to know the truth. In the media environment today, lies are ok. When did that happen? Journalism was part of the checks and balances. What happened to that? Think with your own brain.

  4. GEORGIA RESIDENTS, If you are like me & in foreclosure even though you are not behind on your payments. Contact me & lets compare notes.

    BAC is targeting anybody with a mortgage. They have ruined my credit, even though I have proof that I have made all of my payments. I did not even do the HOME MODIFICATION SCAM!!!! I have people peeping in my windows!!! What the HELL is happening to this COUNTRY!!!! I bet the Congress people wouldn’t like it if they were being treated like us common folks are being treated!!!!!!!!!!!!! I WILL LEAVE MY HOUSE OVER MY DEAD BODY!!!!!!!!!!!!!!!!!!

  5. “Make the lie big, make it simple, keep saying it, and eventually they will believe it” Adolf Hitler 1939

  6. The United States is acting like a Bully in the playground that has gone out of control.

    The United States is making too many enemies.

    Bullies always loose. America please wake up and grow up.

    G-d Bless America.

  7. All the lies are for our own good!

    Our country has become one big Ponzi Enron.

    Indict them all!

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