U.S. seeking up to 40 percent stake in Citigroup: report

[girl gone mad]

Looks like markets and futures are up big on this news.

U.S. seeking up to 40 percent stake in Citigroup: report
http://www.reuters.com/article/newsOne/idUSTRE51M0J120090223

HONG KONG (Reuters) - The U.S. government may end up holding as much as 40 percent of Citigroup's common stock, the Wall Street Journal reported on its website, citing sources familiar with the plans.

But Citigroup executives hope the talks with U.S. federal officials will result in a stake closer to 25 percent, the Journal reported.

The lender is discussing with U.S. officials a scenario in which a substantial portion of the $45 billion in preferred shares held by the U.S. government, amounting to a 7.8 percent stake in Citigroup, would convert into common stock, the newspaper said.

U.S. stock futures turned positive and Treasuries fell after the report.

A Citigroup spokesman in Hong Kong declined to comment.

Citigroup officials also hope to persuade private investors that have bought preferred shares -- including the Government of Singapore Investment Corp (GIC), Abu Dhabi Investment Authority and Kuwait Investment Authority -- to also convert their preferred shares into common stock, the Journal reported.

[rwheeler31]

1. Why this is a crap bank?

[MercutioATC]

2. WHY would we trade preferred shares for common shares?

I realize we'd get a much bigger stake, but the common shares would be completely worthless if Citi goes under.

15% recovery on 7.8% is still a lot better than 0% on 40%.


Stupid, stupid, stupid.

[girl gone mad]

3. There's only one answer to that.

Treasury has been captured.

[MercutioATC]

5. No kidding. This scares me more than the recession in general.

We're breaking up our country bit by bit and feeding it to these idiots.

[DJ13]

4. It would be cheaper to nationalize

Our politicians need to stop trying to keep the greedy bank executives in their jobs and just work on solving this crisis as fast as possible.