By notjustdirt ( February 23, 2009 at 12:36 pm) · Filed under Geithner, Wall Street, bailout, banks, congress, economy, fdic, bailout, banks, citibank, congress, fdic, Geithner, government, Wall St
Tell the White House and Congress this is not how a free market system works. We don’t prop up businesses that are poorly managed and operated and have failed on their own. We don’t support Board of Directors, CEO’s and the shareholders that empowered them who have failed in their mission. They made their decisions and they need to be accountable.
Bankrupt companies go to bankruptcy courts. They go through restructure and new owners take over the parts of the businesses that work and scrap the parts that don’t.
We should not be taking lousy deals just so incompetency can contiue to exist and bring the rest of the economy down with it.
Write the White House and Congress: www.demoskratos.com
Source: Watch Video
From The Business Insider, Feb. 23, 2009:
So Citigroup (C) has proposed that the US taxpayer and other preferred shareholders convert up to $75 billion of preferred stock into common stock, thus bolstering the company’s tangible equity and putting it in less desperate need of a complete takeover.
And what will the US taxpayer get for this preferred stock conversion? 40% of the company for some of its $45 billion of preferred, say reports. The reports add that Citigroup’s goal here is to keep the US’s ownership under 50%, so this won’t be a de facto nationalization.
Well, that’s nice for Citigroup…and another ream-job for taxpayers.
Citigroup’s common equity is currently worth $10 billion. If the US were to convert all $45 billion of its preferred at the current stock price, it should end up with 80% of the company, not 40%.
For the US to convert $45 billion of preferred to common and only get 40% of the company, Citigroup’s existing common equity would have to be valued at $65 billion, not $10 billion, and the conversion price would have to be about $10 a share. Or the US would only be able to convert $4 billion of its $45 billion, which wouldn’t help Citigroup’s tangible equity ratio much.
So is that what Citigroup is trying to do here? Persuade the US goverment to convert to common stock at a price miles above the current trading price, screwing the US taxpayer yet again?
Or does Citigroup have some other secret plan up its sleeve whereby it can take up to $75 billion of debt (preferred stock) off its books and not end up diluting its current shareholders 90%?
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By notjustdirt ( February 8, 2009 at 10:17 pm) · Filed under CBO, Stimulus Bill, banks, congress, economic stimulus, economy, budget office, CBO, congress, economy, recession, stimulus
Here’s the whole article and not just excerpts that the Congressional Budget Office (CBO) claims that they predict recession will end in 2009.
There are major assumptions they are making about public vs. private capital in both the near and long run.
But then again, the very same CBO that advised Congress on the condition of the economy was showing signs of stress but fundamentally sound in 2008 was clearly wrong (page 13, paragraph 2 in this linked PDF also from the CBO office published in the beginning of 2008).
Then some other government agency advised Congress that the US is in a recession since December of 2007 but only realize that in December of 2008. A whole year late!
Real geniuses in Washington the GOP ignored previously. Suddenly with Obama in the White House and Democrats the majority, Republicans are now clinging onto these previously ignored governmental advisory agencies every printed word.
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By notjustdirt ( February 8, 2009 at 9:44 pm) · Filed under Stimulus Bill, congress, congress, house of representatives, paulson, senate, stimulus, TARP
At least it’s cheaper per page and we know the money will go to more people versus just a handful of financial institutions.
And what’s with the page number theatrics again? Are the Republicans unable to read lengthy documents? Do Republicans want the 3 page memo from Hank Paulson ?
Further, it’s interesting that when Republicans controlled both the House of Representatives and Senate to pass spending and legislation between 1995 and 2006, no one said a peep about regulation or the national debt which grew from $4.7 trillion to $8.7 trillion. In addition, during the last 3 Republican White House administrations (Reagan, G HW Bush, G W Bush), the national debt always increased.
When former President GW Bush handed the keys to President Obama, he was also giving him nearly $11 trillion of US National Debt. (Look up Jan 20, 2009 – day of Inauguration)
Now that the Republicans are the minority fighting to keep their jobs, they are suddenly so concerned about spending these days when they themselves are history’s big spenders (see previous link). The Obama administration is trying to save the economy which based on every statistic is in a major recession with the distinct possibility of going into a depression. All I hear is Republicans making the same old pitch that didn’t work for years and decades.
Brain washed propaganda or ignorant of facts, blind to the truth and reality? Either is bad for America. Time for an attempt to move in another direction.
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