Citigroup

[Echewta]

http://www.businessweek.com/news/2010-03-29/u-s-treasury-plans-to-sell-citigroup-common-shares-in-2010.html

The Treasury will dispose of its 7.7 billion common shares of New York-based Citigroup over the course of 2010 using a “pre-arranged written trading plan,” the agency said yesterday in a statement. The Treasury’s stake had a market value of $32.2 billion as of yesterday’s closing price, for a paper profit of $7.2 billion.

I have no idea if BuisinessWeek is a leftist or rightwing publication but here you go.

[EN[i]GMA]

Get money get paid.

[travesty]

yes but it will the profit actually go back to the treasury and be used to buy down the debt that we took on with TARP and reduce the amount of currency in the system so that we can at least, however futily, try and stave off the impending inflation bomb? Somehow I doubt it, it's probably going to get used to bring down the price tag on Obamacare or whatever project he has in mind next.

[jabumbo]

they should use it to tell shitibank mortgage to get a better payment processing system and to stop trying to rape everyone with their pay-for-biweekly payment plan.


oh, and travesty, you should re-read that post so it actually makes sense in the english language

[travesty]

Sorry Ms. Kravopil, should be "Yes, but will it....."

[RobMoney$]

They made billions on BoA as well.

[RobMoney$]

Chewy's entire article:



U.S. Treasury Plans to Sell Citigroup Common Shares in 2010

By Michael J. Moore and Rebecca Christie
March 30 (Bloomberg) -- Citigroup Inc.’s largest shareholder, the U.S. Treasury Department, is planning to sell its 27 percent stake this year in what could become the biggest profit for the bank-bailout program.
The Treasury will dispose of its 7.7 billion common shares of New York-based Citigroup over the course of 2010 using a “pre-arranged written trading plan,” the agency said yesterday in a statement. The Treasury’s stake had a market value of $32.2 billion as of yesterday’s closing price, for a paper profit of $7.2 billion.
The sale would finish the recovery of $45 billion given to Citigroup from the Troubled Asset Relief Program and bring the Treasury closer to President Barack Obama’s goal of recouping “every single dime” of taxpayer money put into the bank-rescue fund. Citigroup, ranked third by assets among U.S. lenders, took infusions from the $700 billion TARP fund in late 2008 as waning confidence almost triggered a run by depositors.
“This certainly puts a new and improved luster on Citi,” said David Dietze, president and chief investment strategist at Point View Financial Services, which owns Citigroup shares. “They’re still deemed a kind of ward of the government, and the mere fact that they’ll be able to dislodge this unwilling assistor underscores that they have gotten to some minimum standard of health.”
Morgan Stanley
Citigroup fell 13 cents, or 3 percent, to $4.18 yesterday in New York Stock Exchange composite trading. The shares have gained 26 percent this year.
The Treasury hasn’t made any projections about profits from the sale, which will be an “at-the-market offering,” Meg Reilly, a spokeswoman for the Treasury, said in an e-mail. Morgan Stanley is advising the Treasury on the sale, and the contract with terms of the agreement will be posted within 48 hours, Reilly wrote.
The announcement “is good news for the taxpayer and further proof that the Troubled Asset Relief Program worked as intended,” Senator Judd Gregg, a New Hampshire Republican, said in a statement yesterday.
The Treasury plans to sell a specific share of Citigroup trading volume on a regular basis without trying to time the market, Treasury Secretary Timothy F. Geithner said yesterday in an interview on CNBC. “We don’t want to be in the business of owning a share in a private company a day longer than necessary,” he said.
The Treasury will likely sell shares on a given day equal to 5 percent to 10 percent of typical daily trading, which the market is probably “ready to absorb,” Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia, said in a Bloomberg Television interview.
Gradual Disposal
“Selling this thing at $4, the government is going to make a lot of money,” Miller said. “If we get to the summer and the stock is down at $3, I think the government will continue to sell as long as the market absorbs it. The government just does not want to own the equity of these companies.”
A gradual sale will likely be better for existing shareholders than one large offering, said Anton Schutz, who manages $225 million of financial stocks at Mendon Capital Advisors Corp. in Rochester, New York, including Citigroup shares. The bank is “under-owned” by the biggest investors, which should bolster demand, he said in a Bloomberg Television interview.
“Many institutions are sitting on the sidelines, waiting for the big government sale so they could buy it at a discount,” Schutz said.
September Conversion
In September, the Treasury converted $25 billion of its Citigroup holdings into common shares at $3.25 each. Citigroup repaid the remaining $20 billion in December, and the Treasury agreed to hold off selling the common shares for 90 days. That lockup expired March 16.
Citigroup has cut the size of Citi Holdings, the portfolio of businesses and assets Citigroup Chief Executive Officer Vikram Pandit has tagged for disposal, by $351 billion since the first quarter of 2008. The bank plans to move another $61 billion of assets from Citi Holdings to Citicorp this quarter.
The bank still has work to do in defining a vision as it shrinks, Elizabeth Warren, who leads the Congressional Oversight Panel for TARP, said yesterday.
“I can’t quite get my arms around the business plan,” Warren said in a CNBC television interview. “Citi has not finished reshaping itself.”
What’s Excluded
The plan announced yesterday doesn’t include trust preferred securities or warrants for Citigroup’s common stock. The government owns $5.3 billion in Citigroup trust preferred securities yielding 8 percent annually as well as warrants that allow it to buy the bank’s stock. It also holds warrants to buy more common stock, which the Treasury demanded from TARP recipients to compensate taxpayers for the risk of providing bailout funds.
Standard & Poor’s equity analyst Matthew Albrecht raised his recommendation on Citigroup shares to “buy” from “hold,” saying the government’s sale wouldn’t put “undue pressure” on the stock. Albrecht increased his share price estimate to $6 from $4.50.
The potential gain from the Citigroup sale may eclipse the amount raised in the auction of TARP warrants tied to Bank of America Corp.’s bailout, which generated $1.57 billion earlier this month. A similar sale of JPMorgan Chase & Co. warrants in December raised $950 million.
The Treasury has received $13.7 billion in interest and dividend payments through its rescue programs, according to a report from the department this month. That includes at least $2.8 billion from Citigroup, according to the report. The eight biggest U.S. banks by assets have all repaid at least part of their TARP funds.
“This is clearly a positive development for both the company and for the government and taxpayers,” said Richard Staite, a London-based analyst at Atlantic Equities LLP. Citigroup and its industry will benefit if they’re “able to show that the government investments through TARP did generate profits for the taxpayer.”
--With assistance from Betty Liu, Jon Erlichman, Peter Eichenbaum, David Henry and Adam Johnson in New York. Editors: Rick Green, William Ahearn
To contact the reporter on this story: Rebecca Christie in Washington at rchristie4@bloomberg.net; Michael J. Moore in New York at mmoore55@bloomberg.net.
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net; Rick Green in New York at rgreen18@bloomberg.net.


Interesting that Bush's name is somehow not mentioned,
but the Obama administration is as if they were the ones who made this happen.

Travesty's right on. Unfortunately, Obama will piss this TARP money away too, instead of being returned to pay down the deficit like Bush originally planned.

[Burnout18]

not suprising, but i want to see if they make anymoney off the money given to gm and chrysler. i doubt it

[valvano]

imagine the capital gains taxes the govt would have paid had they had to work under the same rules as normal investors....

[yeahwho]

Chewy's entire article:



Interesting that Bush's name is somehow not mentioned,
but the Obama administration is as if they were the ones who made this happen.

Travesty's right on. Unfortunately, Obama will piss this TARP money away too, instead of being returned to pay down the deficit like Bush originally planned.

That is a strange mindset, do you think Obama wants credit for a collapsed economy or do you think Obama should mention Bush was in office when the economy collapsed? Both have been involved in TARP, for the good of the Country, what was the other choice? This is about financial crisis and hopefully relief.

As the article states;

The sale would finish the recovery of $45 billion given to Citigroup from the Troubled Asset Relief Program and bring the Treasury closer to President Barack Obama’s goal of recouping “every single dime” of taxpayer money put into the bank-rescue fund. Citigroup, ranked third by assets among U.S. lenders, took infusions from the $700 billion TARP fund in late 2008 as waning confidence almost triggered a run by depositors.

Overall this is a glimmer of good news for the US economy and the TARP program, as far Bush/Obama are concerned one was in office while the economy cratered another is in office after it cratered.

If you want I can help you out since the media isn't playing it up right, Bush's brilliant maneuvering may bring the US Government to a break even mode after a multi-billion dollar raping of the US citizenry by one of the largest financial institutions to ever exist on Earth. Yet other pesky problems remain (http://bailout.propublica.org/main/timeline/index).

[yeahwho]

For me and that is just me I look no further than the wonderfully brilliant Elizabeth Warren (http://www.youtube.com/watch?v=3dH07-hlXEA) whenever I want to know anything about TARP, she is the congressional oversight person and if more citizens listened to her, we would all be better off.

It's not a Republican, Democrat, Libertarian, Green problem anymore, it's a citizens problem today. Unfortunately people are not heeding her message.

She is the very brightest of the brightest on the TARP.

[RobMoney$]

That is a strange mindset, do you think Obama wants credit for a collapsed economy or do you think Obama should mention Bush was in office when the economy collapsed? Both have been involved in TARP, for the good of the Country, what was the other choice? This is about financial crisis and hopefully relief.


As the article states;

The sale would finish the recovery of $45 billion given to Citigroup from the Troubled Asset Relief Program and bring the Treasury closer to President Barack Obama’s goal of recouping “every single dime” of taxpayer money put into the bank-rescue fund. Citigroup, ranked third by assets among U.S. lenders, took infusions from the $700 billion TARP fund in late 2008 as waning confidence almost triggered a run by depositors.

Overall this is a glimmer of good news for the US economy and the TARP program, as far Bush/Obama are concerned one was in office while the economy cratered another is in office after it cratered.

If you want I can help you out since the media isn't playing it up right, Bush's brilliant maneuvering may bring the US Government to a break even mode after a multi-billion dollar raping of the US citizenry by one of the largest financial institutions to ever exist on Earth. Yet other pesky problems remain (http://bailout.propublica.org/main/timeline/index).


Please reread my comment again.
You seem to be responding to things I made no reference to at all? (not that that's unusual for you.)

[yeahwho]

Will I am on topic and you actually do say;

Interesting that Bush's name is somehow not mentioned,
but the Obama administration is as if they were the ones who made this happen.

How am I supposed to correctly respond to your query?

Tell me how is it interesting that the media did not mention Bush...

And how is the media wrong or right on Obama? You said it I'm responding.


On another note since we're discussing Banks here is another great column by Elizabeth Warren from yesterday:

Banking on hypocrisy
By: Elizabeth Warren
March 30, 2010 05:05 AM EDT

Banks or families? (http://dyn.politico.com/printstory.cfm?uuid=ACA33BE0-18FE-70B2-A8778278A4F4B4EF)

For almost a year, the big banks and the American Bankers Association have presented that choice to Congress. Lobbyists argue that meaningful consumer protection will jeopardize the safety and soundness of banks, telling lawmakers that they must decide between the two.

While American families have made clear that they overwhelmingly support the reforms that a new consumer financial protection agency will produce — like clear, understandable terms and conditions for consumer credit products and accountability for the big banks — the lobbyists have made equally clear their plan to kill the agency.

ABA lobbyists now aggressively insist that separating consumer protection and safety and soundness functions would unravel bank stability. Yet just a few years ago, they heatedly argued the opposite — that the functions should be distinct.

In 2006, the ABA claimed to act on principle as it railed against an interagency guidance designed to exercise some modest control over subprime mortgages. It criticized the proposal for “combin[ing] safety and soundness guidance with consumer protection guidance, creating confusion that is best addressed by separating them.”


The ABA went on to argue that the “marriage of inconvenience between supervision and consumer protection appears to blur long-established jurisdictional lines.” And then: “ABA recommends that the safety and soundness provisions relating to underwriting and portfolio management be separated from the consumer protection provisions.”

Read that again: The ABA in 2006 said that policymakers should separate safety-and-soundness and consumer protection — exactly the opposite of its position today.

This 2006 memo illustrates the ABA’s real consistency — consistent opposition to meaningful reform.

If there is a smoking gun in the battle over financial regulatory reform, the 2006 ABA memo is it.

In the memo, the ABA also argued that: 1) the proposed guidance “overstates the risk” of so-called nontraditional mortgages; 2) the nontraditional mortgages were not “inherently riskier” than traditional mortgages; and 3) the nontraditional mortgages “simply present different types of risks that may be well-managed by prudent lenders.”

So much for the ABA’s expertise on what increases the riskiness of banks.

The ABA’s efforts to block rules over subprime mortgages contributed directly to the economic crisis. They also offer irrefutable proof that bank lobbyists will say anything to block meaningful reform.

If saying down is up and up is down — or, for that matter, that the CFPA’s consolidation of seven bloated, ineffective bureaucracies into one streamlined agency will create more bureaucracy — then the ABA lobbyists are willing to say it.

They were just as willing to argue against the integration of safety and soundness and consumer protection functions in 2006 as they are willing to argue for the integration of safety and soundness and consumer protection functions today — so long as it derailed any meaningful consumer protection.

The lobbyists’ consistent theme is unmistakable: They oppose meaningful rules in the consumer credit market.

The above is just a snippet, she is reaching out to us, to all of us yet many are listening to those paid by these lobbyists to propel speaking points. It is insane.

[RobMoney$]

Will I am on topic and you actually do say;

Interesting that Bush's name is somehow not mentioned,
but the Obama administration is as if they were the ones who made this happen.

How am I supposed to correctly respond to your query?

Tell me how is it interesting that the media did not mention Bush...

And how is the media wrong or right on Obama? You said it I'm responding.



Yeah, that comment is a knock on the authors of the article for not mentioning the Bush admin.

Your reply was:
That is a strange mindset, do you think Obama wants credit for a collapsed economy or do you think Obama should mention Bush was in office when the economy collapsed? Both have been involved in TARP, for the good of the Country, what was the other choice? This is about financial crisis and hopefully relief.

Now I ask you, was my comment directed at Obama?
I didn't make reference to what he may want credit for, or what he would like mentioned in the article.

I was only knocking the authors lack of mentioning Bush.

[yeahwho]

It's all good....


The banking lobbyists are paying out cash and working in droves to get better house odds than casinos right now and I'll be goddamned if they haven't just about done better as far as having a captive audience via my paycheck each month.

We're being warned but it seems as if that warning is going to be muted.