There goes Citi...

[ProdigalJunkMail]

http://money.cnn.com/2009/02/27/news/companies/citigroup/index.htm

sP

[geckosfeet]

1. They are converting the preferred shares that treasury already owns to common shares.

I am not sure how this improves anything for the American citizen who is footing the bill here.

The deal will convert preferred shares that Treasury already holds in the bank for common shares, a shift that is designed to better protect shareholders against future losses and improve the embattled bank's capital base, which in turn will hopefully allow it increase its lending.

I thought that in the event of a bankruptcy, preferred shares were gauranteed to get some return, while common shares are write off. Is this a move to clear the balance sheet before bankruptcy?

The Federal Deposit Insurance Corp. considers a bank to be critically undercapitalized if the tangible equity-to-asset ratio is 2% or less. Citi's ratio hovers around 1.5% now.

Has City gotten word that the FDIC is circling like a vulture?

[ProdigalJunkMail]

2. it is about voting rights and replacing most of the board n/t

[Buns_of_Fire]

5. Common stock is voting stock. Preferred stock is non-voting.

But I do think Preferred stock owners get paid off first in the event of liquidation.

Either way, it looks like We The People now own a bank or two or three or a couple hundred. I'm reveling in my new status as an international financing maggot magnate. (I think I'll add it to my now-worthless resume, just for the hell of it.)

[KharmaTrain]

3. About Time...More To Come

I love watching the wingnuts get all frothy over the concept of "nationalizing" the banks. But its fait accompli. When you ask for billions to save your ass, you better be prepared to lose control. All those billions mean this government is a major shareholder in virtually every bank. The move is happening quickly and quietly and is the only way to put a "floor" on the collapsing credit market.

[Myrina]

4. Ok so if, essentially, i'm bailing Citi out with my tax dollars ...

... then they need to get off my ass about my mortgage, because I've 'already paid them' - just not in the typical way, right?

I mean, really -- we the taxpayers are GIVING (at maybe 5%, at the most) these companies money so they can LOAN
it back to us, at a profit? Find me some logic and justice in there. Please?


:wtf: