(no subject)
From The Stranger (Jonathan Golob)
Why Citigroup Deserves To Die
Federal regulators announced late Sunday night that the government had approved a radical plan to stabilize Citigroup in an arrangement in which the government could soak up billions of dollars in losses at the struggling bank. President Bush said on Monday that more such rescues could be arranged if they became necessary.
....
The complex rescue plan calls for the government to back about $306 billion in loans and securities and directly invest about $20 billion in Citigroup. The plan, emerging after a harrowing week in the financial markets, is the government’s third effort in three months to contain the deepening economic crisis and may presage other multibillion-dollar financial rescues.
Nominally, in my posts this would be the time where I make a nicely reasoned discussion of the negatives and positives of the latest action. I can't. I'm apoplectic-consumed with rage beyond rational thought.
Citigroup is eponymous for the sort of financial bullshit that sank all of us-the entire fucking global economy-into what is increasingly likely to be a decade- (or decades-) long period of abject misery. I. Cannot. Even. Start.
In 1998, the formation of Citigroup unilaterally ended the Depression-era Glass-Steagall act. That's right, this fucking financial monstrosity simply decided a cornerstone of American financial regulation shouldn't exist, and acted accordingly.
At a dinner in Washington in February 1998, Sandy Weill of Travelers invites Citicorp's John Reed to his hotel room at the Park Hyatt and proposes a merger. In March, Weill and Reed meet again, and at the end of two days of talks, Reed tells Weill, "Let's do it, partner!"
On April 6, 1998, Weill and Reed announce a $70 billion stock swap merging Travelers (which owned the investment house Salomon Smith Barney) and Citicorp (the parent of Citibank), to create Citigroup Inc., the world's largest financial services company, in what was the biggest corporate merger in history.
The transaction would have to work around regulations in the Glass-Steagall and Bank Holding Company acts governing the industry, which were implemented precisely to prevent this type of company: a combination of insurance underwriting, securities underwriting, and commecial banking. The merger effectively gives regulators and lawmakers three options: end these restrictions, scuttle the deal, or force the merged company to cut back on its consumer offerings by divesting any business that fails to comply with the law.
The lawmakers-led by professional Republican asshole Phil Gramm triangularization expert Rubin and President Clinton-moved out the way.
It took a decade for the repeal of these protections to crater the economy.
And now they want a bailout. The same fucking management team, the same collection of self-important idiots.
Let me tell you something. I could pick 20 random people off the street, hand them a billion dollars each, and I'd be confident they'd create a better bank than these shitheads. And if these random men and women fucked up, I'm absolutely certain their collective mistakes would total less than $300 billion. Starting a bank, particularly an inept and greedy bank isn't that fucking hard.
In comparison, the shitty management teams running other U.S. companies-the airlines, the auto companies, the energy companies-are pure amateurs at colossal fiascoes. Even the guys who green-lit the AMC Gremlin? Better at their fucking jobs.
http://www.livejournal.com/editjournal.bml?journal=neverwakeme&itemid=156157
Citigroup attempted to cover up their losses-their own epic fuckups-through the government financed purchase of Wachovia. Only Wells Fargo's last minute bid revealed their latest deceptive depravity. The morons at Citigroup couldn't even build a headquarters successfully.
Nobel Laureate Krugman agrees with me.
And here is what Robert Reich, a former Secretary of Labor, has to say:
If you had any doubt at all about the primacy of Wall Street over Main Street; the utter lack of transparency behind the biggest government giveaway in history to financial executives, and their shareholders, directors, and creditors; and the intimate connections the lie between Administrations - both Republican and Democratic - and the heavyweights on Wall Street, your doubts should be laid to rest.
...
This is not a particularly good deal for American taxpayers, but it is a marvelous deal for Citi.
....
Meanwhile, more than a million workers in the automobile industry, along with six million homeowners in danger of losing their homes, and a millions of Americans who depend on small businesses and retailers for paychecks, are getting nothing at all.
Why Citigroup Deserves To Die
Federal regulators announced late Sunday night that the government had approved a radical plan to stabilize Citigroup in an arrangement in which the government could soak up billions of dollars in losses at the struggling bank. President Bush said on Monday that more such rescues could be arranged if they became necessary.
....
The complex rescue plan calls for the government to back about $306 billion in loans and securities and directly invest about $20 billion in Citigroup. The plan, emerging after a harrowing week in the financial markets, is the government’s third effort in three months to contain the deepening economic crisis and may presage other multibillion-dollar financial rescues.
Nominally, in my posts this would be the time where I make a nicely reasoned discussion of the negatives and positives of the latest action. I can't. I'm apoplectic-consumed with rage beyond rational thought.
Citigroup is eponymous for the sort of financial bullshit that sank all of us-the entire fucking global economy-into what is increasingly likely to be a decade- (or decades-) long period of abject misery. I. Cannot. Even. Start.
In 1998, the formation of Citigroup unilaterally ended the Depression-era Glass-Steagall act. That's right, this fucking financial monstrosity simply decided a cornerstone of American financial regulation shouldn't exist, and acted accordingly.
At a dinner in Washington in February 1998, Sandy Weill of Travelers invites Citicorp's John Reed to his hotel room at the Park Hyatt and proposes a merger. In March, Weill and Reed meet again, and at the end of two days of talks, Reed tells Weill, "Let's do it, partner!"
On April 6, 1998, Weill and Reed announce a $70 billion stock swap merging Travelers (which owned the investment house Salomon Smith Barney) and Citicorp (the parent of Citibank), to create Citigroup Inc., the world's largest financial services company, in what was the biggest corporate merger in history.
The transaction would have to work around regulations in the Glass-Steagall and Bank Holding Company acts governing the industry, which were implemented precisely to prevent this type of company: a combination of insurance underwriting, securities underwriting, and commecial banking. The merger effectively gives regulators and lawmakers three options: end these restrictions, scuttle the deal, or force the merged company to cut back on its consumer offerings by divesting any business that fails to comply with the law.
The lawmakers-led by professional Republican asshole Phil Gramm triangularization expert Rubin and President Clinton-moved out the way.
It took a decade for the repeal of these protections to crater the economy.
And now they want a bailout. The same fucking management team, the same collection of self-important idiots.
Let me tell you something. I could pick 20 random people off the street, hand them a billion dollars each, and I'd be confident they'd create a better bank than these shitheads. And if these random men and women fucked up, I'm absolutely certain their collective mistakes would total less than $300 billion. Starting a bank, particularly an inept and greedy bank isn't that fucking hard.
In comparison, the shitty management teams running other U.S. companies-the airlines, the auto companies, the energy companies-are pure amateurs at colossal fiascoes. Even the guys who green-lit the AMC Gremlin? Better at their fucking jobs.
http://www.livejournal.com/editjournal.bml?journal=neverwakeme&itemid=156157
Citigroup attempted to cover up their losses-their own epic fuckups-through the government financed purchase of Wachovia. Only Wells Fargo's last minute bid revealed their latest deceptive depravity. The morons at Citigroup couldn't even build a headquarters successfully.
Nobel Laureate Krugman agrees with me.
And here is what Robert Reich, a former Secretary of Labor, has to say:
If you had any doubt at all about the primacy of Wall Street over Main Street; the utter lack of transparency behind the biggest government giveaway in history to financial executives, and their shareholders, directors, and creditors; and the intimate connections the lie between Administrations - both Republican and Democratic - and the heavyweights on Wall Street, your doubts should be laid to rest.
...
This is not a particularly good deal for American taxpayers, but it is a marvelous deal for Citi.
....
Meanwhile, more than a million workers in the automobile industry, along with six million homeowners in danger of losing their homes, and a millions of Americans who depend on small businesses and retailers for paychecks, are getting nothing at all.