Citigroup Bailout To Make US Taxpayers $12.3b Profit

[Purveyor]

Source: Guardian UK

US taxpayers are likely to make a $12.3bn (£7.75bn) total profit on their bailout of financial group Citigroup, according to government officials.

The US treasury expects to net $312.2m on Monday when it sells the rest of its stake in Citigroup. The government holds 465.1m warrants in Citi that entitle it to purchase common shares in the banking group.

The warrants, which it is auctioning, represent the remaining part of the US government's $45bn investment in Citi during the financial crisis.

Taxpayers are expected to end up with a $12.3bn profit on the bailout, made under the troubled asset relief programme (Tarp). The treasury sold its 34% stake of common shares of Citi last year.

"As we exit our investments in private companies and recover taxpayer dollars, it's clear that the cost of the Tarp programme will be a fraction of what many had once feared during the depths of the crisis," said Tim Massad, the treasury's acting assistant secretary for financial stability.

Read more: http://www.guardian.co.uk/business/2011/jan/26/citigroup-stake-sold-by-us-government

[WCGreen]

1. Yep, it was a controversial move on the part of the government that

actually worked out.

Except, of course, if you look behind the screen and see all the nasty shit these banks did and continue to do to their individual customers.

[w4rma]

2. That money was conned fair and square from regular Americans. (nt)

[KansDem]

3. I'll take my cut in $10 and $20 please...

Man, I love being a "capitalist!" :D

[unblock]

4. frankly, all this talk about MAKING money off these bailouts scares me shitless

outrage about LOSING money would be far better for future good governance. these types of bailouts should be viewed as odious, and political, moral, and economic grounds. if they're REALLY, REALLY necessary, perhaps they're necessary evils, but they should be seens as VERY last resorts.

the more the press goes about saying how we actually MADE money off (a selected subset of) the bailouts, the more they seem harmless or even a good idea, which only makes them MORE likely to happen in the future.


our government and the corporate world are already far too intertwined to make direct government investment in private enterprise remotely normal.

[BobbyBoring]

9. frankly,

I think your right. What really pisses me off is the fact that all the things Summers said would happen if we didn't cough up 800 billion happened anyway. Credit would freeze up if we didn't pay up. Well guess what? Credit is about as frozen as it can get.
The bail outs of the financial enabled the banksters to perpetrate the largest heist in history FROM US! If i was to get back the 100K or so that they cost me, I would be happy about US making a profit but I don't think WE will ever see anything but more of the same~

[unblock]

10. actually, credit is (slowly) thawing, and the bailouts helped -- somewhat

the credit markets really dried up around august 2007, long before anyone heard of the housing crash or the financial meltdown or the great recession. but you pretty much had to work in the financial markets to really see what was happening; it wasn't really big in the popular press.

the government took many steps to help, some of them more wise and effective than others. some of them propped up markets that would have collapsed entirely, others simply dumped money into a giant pit that would show no change until the pit was completely full. in other words, there was some good done but also enormous waste.

what is certain is that the disaster would have been FAR worse had the government done nothing.
what is also certain is that the recovery could have been FAR better had the government done something better.
what is also certain is that the whole mess could have been avoided had the government not gone so loopy in terms of deregulation and saying ok to any consolidation, no matter how ill-advised.

[No Elephants]

11. credit is (slowly) thawing this far down the road is not how the bailout was sold.

Paulsen said it HAD to be done almost overnight and Congress did it in under 2 weeks.

In theory, that was why we did not have time to put conditions on those bailed out--bc we had to make sure credit KEPT flowing.

That was what we supposedly paid for--no hiccoughs in the flow. Instead, well over a year later, we are still talking about credit slowly thawing.

As far as our making a profit on the bailout as a whole, I just don't believe taxpayers will beat banksters in our plutonomy.

For one thing, Google "hidden costs bailout."


For another thing, as one of my former partners was fond of saying, "Figures lie and liars figure."

[unblock]

12. i agree paulson, bernanke, et al. oversold the upside

but in truth the real motivation for the bailout was not to get credit actually flowing, but to stop the freefall and restore confidence that in the viability of the banks, and they achieved that, in no small part by lying.

had they really wanted to get credit flowing again, a far better way would have been to set up new banks as government sponsored entities like fannie mae, with CLEAN balance sheets. another way would have been to provide specific government guarantees or to purchase financial products directly. they actually did this for certain products. but instead, for the most part, they simply tried to fill the hole the banks dug for themselves, which they knew would take years unless they threw even more staggering sums of money at the problem.

in short, they if the goals was stabilization and stagnation (for the economy, the financial sector, AND government itself), they chose the perfect plan, and surprise, surprise, it worked. makes you wonder if that wasn't the goal all along.

[onethatcares]

5. that is great news, now

when can I expect my part of the profit? I only need about 70K to pay off the house and 2nd mortgage. That would free up enough cash to take an island vacation for me and my main squeeze. A check, money order, or three suitcases of 20s is my preferred method of payment.

[nalnn]

6. Someone check my math

Isn't that something like $41.00 for every man woman and child in the U.S? I know we don't all pay taxes, but I don't know that number.

[Myrina]

7. Please apply my share of profits to my Citi Mortgage principal ...

... in lieu of a dividend check. Thank you.

Oh wait ... we're not getting any of that money back? Hmmm ....

[jwirr]

8. So in this trickle down economy how much do we each get from that?

:sarcasm:

[1896educational]

13. The reason people are angry with TARP

has nothing to do with profit, and everything to do with the fact that assistance was promised to the millions of Americans suffering from mortgage and financial problems, and very few of them got it. The banks got help, and they survived, but that aid never trickled down to the general public who is still screwed.

[naaman fletcher]

14. Short-sighted view

What is the long term cost to the integrity of the economy of bailing out crooks? It's a LOT bigger than this profit.