Bend Over, Citigroup, It's Time for a Checkup

Thursday, December 17, 2009 , , , 1 Comments


Citigroup Inc's Vikram Pandit endured a brutal capital raising episode this week in an effort to win the bank's freedom from close government oversight, but the bank's CEO may have won less than he hoped.

In a blow to both the No. 3 U.S. bank and the Treasury, Citigroup sold $17 billion of shares at $3.15 apiece, below the $3.25 price at which the government bought its Citi stake.

The share sale, part of a $20 billion capital raise to help repay funds from the Troubled Asset Relief Program, was meant to reduce the government's say over compensation and other matters at the bank.

But the sale went poorly enough that a key element of Citigroup's plan to extract itself from the government's clutches did not happen: the U.S. government did not sell the up to $5 billion of shares it hoped to shed at the same time as the bank's offering. The government holds 7.7 billion Citigroup shares, now equal to about a quarter of the company.

Let's stop this madness and just unwind Citigroup. Surely anyone exposed to their malaise has long since fled from $C U Next Tuesday's not-so-promising future, no? If they were "too big to fail" at any point, they should now be considered too fail to continue and shut down like a crack den in the ghetto.

So the real question here is: what happens when the crackheads are also the SWAT team?

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


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