COMMENTS: A Share of the Crumbling Citi

"The government is stopping short of taking full control of Citigroup," announced CNBC's Scott Cohn on NBC as the $45bn that the Treasury Department disbursed to the bank from its TARP program was converted into 38% of its common shares. CBS' Anthony Mason (no link) called it "an accounting maneuver" to reduce Citigroup's debt, increase its capital and strengthen its balance sheet. ABC's Sharyn Alfonsi noted that Vikram Pandit, Citigroup's boss, is still on the job. "He has agreed to be paid only $1 this year and still some taxpayers are asking if he is worth it."

ABC's Alfonsi went down the list of the CEOs of the ten giant financial firms that received most of the TARP bailout: "All still have their jobs." Contrast that with Scotland and Switzerland, where the bosses of the bailed-out RBS and UBS were fired. Unidentified economists justified the government's reluctance to oust executive failures to he thus: "If there is even an appearance that the government is involved in the day-to-day operations of a bank, investors will be spooked and the stock will crumble."

Crumble? CBS' Mason pointed out that those shares of the Citi that we taxpayers purchased cost $1.50 each.


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