Federal Government expected to make $12 Billion from final sale of Citi shares

[gateley]

The Federal government is divesting its ownership in Citi bank, and the final sale of shares is expected to make the taxpayers $12 Billion from the bailout purchase done in 2008. / snip

http://www.examiner.com/finance-examiner-in-national/federal-government-expected-to-make-12-billion-from-final-sale-of-citi-shares

The commentator on CNN said it's about a 26% return in two years -- not bad!

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1. A 26% return? Citi received almost $400 billion in federal assistance

How is that a 26% return?

[gateley]

2. From the link:

http://www.examiner.com/finance-examiner-in-national/federal-government-expected-to-make-12-billion-from-final-sale-of-citi-shares

Citigroup received $45 billion in taxpayer support late in 2008 in one of the largest bailouts undertaken by the government as it struggled to contain the worst financial crisis to hit the country since the 1930s.

The Treasury Department said late Monday that it had struck a deal to sell its remaining holdings in Citigroup common stock, about 2.4 billion shares. With the proceeds of the sale, priced at $4.35 a share, the government will have realized $57 billion on its bailout package for the big bank.

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4. But that article is bullshit. They got almost 400 billion

alot of it was in the form of the US government guaranteeing the assets of citibank, almost $300 billion worth. That doesn't count?

[gateley]

6. Don't ask me, I'm not an economist - I don't even know what "guaranteeing

the assets means" - does that mean actual money given to them?

Anyway, I was just printing the article and repeating what the CNN guy said, as I said in my OP.

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9. I udnerstand, my issue was with CNN not you

and I'm not economist either. But when someone gurantees 300 billion dollars of your assets when you are crashing and burning that's worth something.

[gateley]

10. What does that mean -- the "guarantee"? Do you know? Did that affect us

in any way? And if you don't know, no big deal, just curious. :hi:

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11. It didn't affect us because luckily citibank didn't go under. But that kind of insurance isn't cheap

and it has value. To pretend that insuring 300 billion worth of assets from a failing bank isn't worth anything as CNN has done in this case is disingenuous.

And if you don't count that we should have gotten far more than a 26% return by this time. Because of the actions the government took the stop price for citi went up 1000% within a matter of months which many investors got. And we are sitting here bragging about a 26% return in 2 years.

[gateley]

12. Well, if it's something you're interested in, believe me, don't rely on my "reporting"

of their take on it. By the time I look down to my keyboard and hit 'post' most of it is already becoming fuzzy in my brain.

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13. I tend to do the same sometimes, I think I just did now

I keep repeating CNN, but the article you posted was from the examiner :p.

[gateley]

15. Ha! Yeah, I thought I'd be slick and actually find something in print because

invariably when I post "I just heard on ...." I get the response: Link?? Should have looked a little more to see if CNN had something. Oh, well, I DID hear it on CNN!

[bushisanidiot]

3. Where's your link for that $400 billion? Not Drudge, I hope

"The Treasury invested a total of $45 billion to bail out Citigroup in 2008 and 2009 during the financial crisis. The company paid back $20 billion in preferred stock, while another $25 billion was converted to 7.7 billion common shares held by the Treasury"

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5. Is the new york times okay with you?

http://www.nytimes.com/2009/01/04/opinion/04lewiseinhornb.html

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Weeks after receiving its first $25 billion taxpayer investment, Citigroup returned to the Treasury to confess that — lo! — the markets still didn’t trust Citigroup to survive. In response, on Nov. 24, the Treasury handed Citigroup another $20 billion from the Troubled Assets Relief Program, and then simply guaranteed $306 billion of Citigroup’s assets. The Treasury didn’t ask for its fair share of the action, or management changes, or for that matter anything much at all beyond a teaspoon of warrants and a sliver of preferred stock. The $306 billion guarantee was an undisguised gift. The Treasury didn’t even bother to explain what the crisis was, just that the action was taken in response to Citigroup’s “declining stock price.”

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[Ichingcarpenter]

7. Citi Bank should have gone down the tubes

It is owned partially by Saudis.

It is and was corrupt and no one was arrested.

[gateley]

8. No one is EVER arrested! It makes my blood boil. Didn't know that about

being partially owned by Saudis.

[PBS Poll-435]

14. I *heart* this thread.

I really do.