Government could acquire a 36% stake in Citigroup - ( Preferred shares to be converted to common)

[JohnWxy]

http://news.yahoo.com/s/ap/20090227/ap_on_bi_ge/citigroup_rescue

The U.S. government will exchange up to $25 billion in emergency bailout money it provided Citigroup Inc. for as much as a 36 percent equity stake in the struggling bank, greatly increasing the risks to taxpayers as voter unhappiness about the broader bailout program rises.
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The swap of $25 billion of preferred shares into common stock will expose the government to the same risks facing other holders of the bank's common stock. Shares of Citigroup and many other financial companies have plunged as the sector undergoes its worst crisis in seven decades.

[jwirr]

1. Why isn't anyone using the anti-trust laws to break these huge banks

down into smaller healthier units. Similar to what we did with AT&T in the 70s. I would rather have a small local bank that is stable than a bank that is teetering on the brink of disaster. If it is too big to fail then it is too big.

[Joanne98]

2. Ronald Reagan said no.

[w4rma]

3. This sounds bad on the surface. The TARP money seems to be for bailing out shareholders. (nt)