US Set To Make $8 Billion Profit From Citigroup Bailout

Washington Post:

Among the banks that rule Wall Street, Citigroup got a bailout that was bigger than the rest. Now the company is about to pay a king's ransom for its federal rescue.

Read the whole story: Washington Post

Comments

[mfyourmomscalling]

05:34 PM on 03/29/2010

MORE GIGANTIC LIES

[BradKnSF]

02:32 AM on 03/29/2010

I have read some comments here that imply the authors believe Citi must be profitable -- to which I would reply that they do not know how to read a balance sheet. I am sure most people do not look but this information is publicly available. They are raking in money for sure, but are at the same time hiding a BIG mess in their books.

If I am correct, the US Govt should get out while the getting out is good. The stock price could yet go a good deal higher -- as many stocks seem to have gone well above a reasonable value -- but that is an uncertain gamble. Unless there is some unforeseen and dramatic improvement in the world economy, at some point, Citi will no longer be able to hide the bad debt that continues to accumulate. Watch out below. Citi continues to be a risk of failure -- the evidence can be seen in the stock price.

I too believe the true cost to the US taxpayer does not include any payoff by AIG to Citi, so anyone who criticizes the idea of an $8 billion profit is probably at least technically correct even though the US is making a profit on the stock purchase. In the world of stock ownership, pri

[BradKnSF]

02:33 AM on 03/29/2010

In the world of stock ownership, profits are good.

[BradKnSF]

02:38 AM on 03/29/2010

By the way, the stock price rising due to the US govt planning to sell their stock is completely irrational. It's like saying: "Hey someone's going to sell $50 Billion of stock -- so let's pay $60 Billion for it instead".

[Bruce vain]

11:54 PM on 03/28/2010

Thats an 8billion dollar profit folks..that's a net GAIN...sheesh give the man some credit.........

[bayviking]

07:34 PM on 03/28/2010

Bailout Taxpayer Cash cost, at least $45 billion. Opaque transfers of "toxic assets" from Citicorp and other key fraudsters, far more but ill defined since mark to market accounting rules have been suspended. This means the true market values of mortgaged Real Estate is not being counted. Probably about $27 trillion at risk from all bailout recipients. Citicorp's piece of that is not clearly defined. Larger than that is the derivatives market, probably on the order of $284 trillion.

I've got it, lets lead with a story that the US Government stands to make $8 billion, as if that makes any of the bailout right.

[Fortescue]

02:12 AM on 03/29/2010

I don't pretend to understand economics to a huge extent, but wikipedia has 2009 global GDP at $70 trillion and currency at $57 trillion, so I'm wondering if your $284 trillion is some thing that you've simply made up.

[maxhardon]

06:00 AM on 03/29/2010

Unfortunately the figure is not made up. The total value of the derivative market is estimated to be at 600 trillion. This is what the government is guaranteeing these firms in case they make another bad bet. Sounds crazy and it is.

It is however hard to determine just what part of this belongs to Citi. The Fed reefuses to release infos about what bank has parked which bad assets to what amount. This is a big secret. Bloomberg has a lawsuit running to make them release this info, which the Fed is fighting tooth and nail

[sonofsamphm1c]

12:18 AM on 03/30/2010

The notional value is not made up. What it means, on the other hand, is total fiction as presented. For instance, mark-to-market has not been suspended. It was altered.

At one point the notional value of all known derivatives was 1.46 quadrillion dollars. This, basically, is no big deal.

[DesertDawgAlpha]

06:19 PM on 03/28/2010

Does this government windfall mean that Citibank executives, who obviously must have been doing some great work to generate the profits, should get big pay again?

[CB5]

05:56 PM on 03/28/2010

PS I think this also show Americans how profitable banks can be....

And how much power they have!

[Carolyn LeBeauf]

05:34 PM on 03/28/2010

The president will get all the taxpayers money back. So please be patience we have a man with a brilliant brain working for us now.

[Darkswan]

10:42 PM on 03/28/2010

no, he just speaks on tempo and you get hypnotized

he'll never pay back the toxic trillion, but ohh what a speaker!

[spinns17]

01:28 PM on 03/28/2010

can we still come there with pitch forks ?

[mrspiffy]

11:43 AM on 03/28/2010

The TARP deal was a trade...plain and simple. Goldman probably advised the gov. They'll make money on most of these.
http://yieldpig.blogspot.com/

[sonofsamphm1c]

03:04 PM on 03/28/2010

I think the only actual loss so far, of any significance, is CIT, which around 2.3 billion.

By my calculation, the outstanding TARP loan balance, all TARP programs, at the end of February was 204 billion. The vast majority of that is:

Banks - 72 billion
AIG - 47.5 billion
Auto - 76 billion
PIPP - 5.5 billion

There are significant commitments, but so far they are unfunded.

[jelyfish]

08:15 AM on 03/28/2010

This is just plain disingenuous. US Govt owns an incredible amount of their stock still (or did last I checked). This also does not take into account the AIG backdoor bailout.

But mostly this is just a trick with accounting (mark to model). The 2000 lbs gorilla in the room is that Citi still holds most of its toxic assets. Actually, probably more toxic assets than when the bank collapsed.

So since we still have a major stake (US govt) in Citi and they are upside down because of toxic assets. If (which the govt is trying to do) we sell our stake in Citi group we will still be on the hook for all the toxic assets because of "Too big to fail". (Disingenuous! Meant to fool you.)

[Tkevan]

12:15 PM on 03/28/2010

Forget it. Most here don't understand we're getting paid back with our own money. 401k's and Retirement Trusts that invested in Citi, fees and rates paid on loans is where the money is coming from. When Citi crashes again, and it will, that $8b is going to look like pocket change.

[LunaPark]

02:09 PM on 03/28/2010

I think the treasury backed the toxic assets, so really it is the taxpayer that holds them.

[what is is]

07:01 AM on 03/28/2010

all stock market boats were lowered in the loan freeze crash of 2007-08, including banks and retirement funds, but banks got tarp cash to leverage and buy up these lowered firesale items which increased their real assets, retirement funds did not profit as such.

So now since they are paying back some profit for the smoking leverage gun they were lent, does any body else see what's wrong with this transfer of wealth great train robbery success being spun as good for we the people?

plus crypto news recently reported that recent hcr legislation is the biggest transfer of wealth from the rich to the poor in 4 decades. ceo bonanza pharma sell out .....huh?

we either need some new wrioters or some new readers. i'll let you decide.

[maxhardon]

03:49 AM on 03/28/2010

What did Alan Greenspan say - "a billion dollars is just not that much money anymore". It's tmie we hit these banks up for some real money, not jist chump change.

[wingsabre]

02:06 AM on 03/28/2010

We should at least use this as leverage for financial reform.

[wingsabre]

02:04 AM on 03/28/2010

I would wait till the housing market improves, or wait till October to sell Citi. It makes no sense why we're selling now, when we could earn an even bigger profit, and pay down our debt even more.

[Carolab]

11:44 PM on 03/27/2010

The Saudis want to buy it.

[ErnestineBass]

01:40 AM on 03/28/2010

The Saudis already own close to a third of it anyway.

I'll celebrate once the check clears...

[spinns17]

01:29 PM on 03/28/2010

ya that oil is not going down ha .lol