Citigroup going on 3rd bailout

[Lou337]

Feb. 27 (Bloomberg) -- The U.S. government ratcheted up its effort to save Citigroup Inc., agreeing to a third rescue attempt that will cut existing shareholders’ stake in the company by 74 percent. The stock fell as much as 37 percent.
The Treasury Department said it would convert as much as $25 billion of preferred shares into common stock provided private holders agree to the same terms, the government said in a statement today. The conversion would give the U.S. a 36 percent stake in the New York-based company

http://www.bloomberg.com/apps/news?p...rdg&refer=home

That's the Treasury department getting that 36% stake btw.
Stock is at $1.55

[Thorn777]

I always found Citigroup a despicable bank, but they are important due to the many US pensions stalled there, right?

[Scar Face]

Their collapse is inevitable. God Obama is an idiot.

[CDMan477]

No worries. It appears this years revised budget as well as 2010's will approach $7 trillion now. The government can start bailing out European banks at this point.

[Thorn777]

No worries. It appears this years revised budget as well as 2010's will approach $7 trillion now. The government can start bailing out European banks at this point.

Cool, can they also bail-out me?

[Hookah Smoking Caterpiller]

Cool, can they also bail-out me?

me too, I spent all my money when I was drunk of vodka and fags, surely thats a better way to waste it than by fanacial nonsense

[Lou337]

I guess they can bail you guys out. Your kids will end up paying for it though, at interest.

[Hookah Smoking Caterpiller]

I guess they can bail you guys out. Your kids will end up paying for it though, at interest.

those s? They deserve to pay!

[Gelgoog]

yeah! nationalizing banks! one step closing to socialism!!! WOOOO......

[JP226]

I really am at a loss as to why. We know what works and doesn't work. Whether it's Hayek or Samuelson they all understand the basics. They understand how supply and demand works, they understand the effects of most variables. They may have thei twists on their theories and diverge on business cycles, but there is a line. I can not figure out why they are spending so much. Economists aren't idiots and they typically aren't ideological. We may have our theories but we're statisticians too. Numbers are important to us. So why?

[Lou337]

I really am at a loss as to why. We know what works and doesn't work. Whether it's Hayek or Samuelson they all understand the basics. They understand how supply and demand works, they understand the effects of most variables. They may have thei twists on their theories and diverge on business cycles, but there is a line. I can not figure out why they are spending so much. Economists aren't idiots and they typically aren't ideological. We may have our theories but we're statisticians too. Numbers are important to us. So why?

The why I think is answered in another article:

“That’s the heart of why these companies are trading where they are,” Friedman Billings Ramsey & Co. analyst Scott Valentin said in an interview. “Technically, if you mark-to- market the entire balance sheet, most of these banks are insolvent.”

http://www.bloomberg.com/apps/news?p...biE&refer=home

BOA missing ~40 billion in devalued loans

[JP226]

mark to market is an excuse to make up

[Lou337]

I wouldn't be surprised if the bailout numbers were made up. Maybe they're cooking the balance sheets.

In other news, two banks failed today.

http://www.fdic.gov/bank/individual/.../banklist.html

[JP226]

I wouldn't be surprised if the bailout numbers were made up. Maybe they're cooking the balance sheets.

Of course, that's the very essense of mark to market. Since the fed (Gov) is jumping in on the derivatives companies can literally make up a value based on mark to market. Who's to say how much a derivative is worth weeks before it matures? If it were me, I'd say a 50 dollar future is worth fifty million in my book two weeks prior.

[Lou337]

How nice. I remember reading somewhere, relatively not too long ago, that Bernanke is still aiming for 2% inflation. I usually look at the official numbers and double them just for accounting foolery. Same with unemployment. One thing that's always struck me as odd is that the government doesn't consider people who give up searching for work as unemployed. It's like they disappear from their records knowing the numbers are still there.

[JP226]

How nice. I remember reading somewhere, relatively not too long ago, that Bernanke is still aiming for 2% inflation. I usually look at the official numbers and double them just for accounting foolery. Same with unemployment. One thing that's always struck me as odd is that the government doesn't consider people who give up searching for work as unemployed. It's like they disappear from their records or something.

That's typically a safe rule of thumb. Alot of these values we can use them as floors. If the unemployment rate is 8 percent, we know it's atleast 8%. It's all guess work and too much of the economy is operated on that idea.

Inflation though is a little different. We know how much money we are printing and we have an idea, a rough one though with the CPI, of the growth in prices. I would necessarily double it, but I would still play the floor game. 5% inflation, well we know it's atleast 5%.

[Lou337]

What is your favorite school of economics JP?

[JP226]

I'm actually a a follower of the chicago group and monetarists. But I do give way to the austrians.

[Lou337]

I like Mises as well. I wonder what Keynes would think of this current crisis. Sometimes I just imagine them debating for fun.

[Da Skinna]

Best interests rule economists decisions too?