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Slouching Towards A "Temporary Takeover" Of Citibank

By Big Tent Democrat

It appears that Treasury Secretary Tim Geithner simply will not bite the bullet. NYTimes:

[T]he Treasury Department announced on Friday that it would vastly increase its ownership of the struggling company. After two multibillion-dollar lifelines failed to shore up Citigroup, the government will increase its stake to 36 percent from 8 percent.

Under the deal, the Treasury Department has agreed to convert up to $25 billion of its preferred stock investment in Citigroup into common stock, giving taxpayers more risk, but more potential for profit if the company recovers. The Treasury will convert its stake to the extent that Citigroup can persuade private investors, including several foreign government investment funds, to go along. . . . The Obama administration deliberately stopped short of securing a majority or controlling interest in Citigroup . . . Taxpayers, after pumping more than $45 billion into the bank, have become Citigroup’s single largest shareholder. The government will not put in any additional money for now, but some analysts believe Citigroup may require more down the road.

This is simply ludicrous. Bite the bullet now Geithner. "Temporary takeover" of Citi is inescapable. Start fixing the problems now.

Speaking for me only

Full post as published by TalkLeft on February 27, 2009 (boomark / email).