The Citi Bailout: What Do You Believe?
By Adam Shapiro, FOX Business Network correspondent
It all boils down to one simple question: do you believe them?
The numbers count, but nothing is more important than the faith of consumers, investors and citizens to believe statements from Citigroup and the US government about the most recent bailout to save the financial system, western civilization and “Big Nick’s” on New York’s upper west side (which serves the best burgers north of “Times Square” and to my knowledge has not asked for a bailout). Trust me, Big Nicks is a part of this, but regarding CITI and Uncle Sam, do you believe them? Standing outside CITI Group headquarters on a cold New York day and listening to all of the experts – remember it was the experts who got us in to this mess – my answer to the question is no, and I hope to be proven wrong.
The 306 billion dollar FDIC insurance plan to save CITI covers a pool of trading account assets, which CITI says totals 458 billion. (See slide 17 from the CITI Town Hall Presentation given Nov. 17)
Here is the problem: the same trading account assets are 520 billion at JP Morgan Chase and 429 billion at Bank of America. So, will they now knock on the bailout door? What is different about those trading assets at CITI compared to the assets at JP Morgan Chase and Bank of America? Do you believe the FDIC, FEDERAL RESERVE and US TREASURY – which issued a joint press release saying, “With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy”? What do they know that we don’t about those assets at other banks? Or, do you think they will have to step in to help JP Morgan Chase and Bank of America?
CITI insists that its future losses will not exceed 29 billion dollars and that the FDIC will not have to spend one penny to save them. Really? Do you believe them? Just last week CITI said, “CITI has a very strong capital and liquidity position….” Really? Then why did CITI just get an additional $20 billion from the US Treasury? Did CITI fail to understand its own exposure, or did they simply forget to include the $29 billion in potential future losses from the nifty Nov. 17 town hall pep talk that CEO Vikram Pandit gave CITI employees. It was at this time he notified them that CITI was cutting 50,000 jobs. Great way to motivate the troops. Seriously, can you believe this stuff is happening?
Finally, this deal does not address the $1.2 trillion off balance sheet assets that CITI insists pose no threat. (Add loads of sarcasm here) REALLY? We’ve heard that before, and remember 667 billion of that off-book asset are mortgage backed securities. CITI CFO Gary Crittenden says “CITI has enormous capacity to absorb credit losses.” Those off balance sheet assets “are likely not to have a significant impact on CITI over time.” But FOX Business anchor Alexis Glick asked Crittenden what guarantees CITI could give us that those 1.2 trillion wont impact CITI’s balance sheet, and that was a question he did not answer. So, do you believe them?
Which brings me to Big Nick’s on New York’s Upper West Side. I am really hungry, and a Big Nick’s burger right now would be a lot easier to swallow than what the FDIC, Federal Reserve US Treasury and CITI are serving the American public.
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When the story hits, FOX News is there. With bureaus across the world, there isnt any news that gets by FOX News. 
I think this bailout is as bad as the others. When are they going to bailout the American people.
If the CEO can not run their business better than I can run my home, why should we bail them out? Let them go bankrupt and get re-organized into a profitable business. Better yet, fire all the upper management and let the stockholders vote in someone that knows what they are doing.
Just my humble opinion.
I think the management of citigroup should be investigated first they try to “BUY” and loot wachovia but are thwarted by Wellsfargo”s buyout of Wachovia, , now a few weeks later not only are they not qualified or able to aquire another bank, they need a bail out? hmmm sounds like we have failed bank robbers in charge of Citigroup now they are trying tax payer robbery and will succeed with the help of our government who should be jailing them not bailing them.
I think the stock was deliberately driven down, so the bank can get their share of the bailout money. Unfortunately when it is reveiled who did what to munipulate the stock, nothing will be done to them. In the meantime Citi will use the goverments money to buy out even more competition. The shady side of Capitolism at its finest.
No, I don’t believe them and really don’t know anyone who does. To be honest, I don’t think they care. This bailout issue has gone over the top and I’m curious to see where it ends. I hope I’m still alive when the truth about all this comes out. It’s snowballing and no amount of constituent pressure will stop it.
Do I believe this?? No. I don’t believe Wall Street and I certainly don’t believe anything my government is telling me. I’m not going to believe any of them until I see the people responsible for this “doing the prep walk”. Too big to fail? That’s never true. It’s not true about people or institutions. And its certainly not true about our government.
The American people are becoming slaves to their government. When we get the bill for all this “bailout” business our government is doing, we’ll find ourselves working for the government and not ourselves. Sadly, I think most American’s think that is how it should be. They are more than willing to let the government take care of them. Of course, it may not be the American government we find ourselves working for and taking care of us. It may be whichever government has lent us the most money.
Well, we’ve always been told that the USA was a great experiment. Guess the experiment isn’t working out so good right now. Our future generations have a very sad life ahead of them.
I feel like all the rich people/big businesses are getting bailed out and small businesses like mine are not even being thought about. Maybe THEY think that these people will help us. I don’t think so. They take care of #1 and that still does not help me or any of the other tax payers that are not getting bailed out. CITI should have to stop the Met’s Stadium advertising of 500 million dollars if they need the tax payers to bail them out. I am sick of this word bailout. Greed. The banks are also responsible for giving these bad loans. I was going to buy a house last year, but the bank kept trying to place me into a bad loan that I would not be able to handle. It’s there fault for changing the rules to make more money. I did not take this loan because I am not stupid about finance. It finally hit them in the face, but I have to help bail them out when my company is hurting just as bad. Thanks for giving our tax money to the rich. Think they are thinking about how they can help my business? NOT! I really have more to say, but I have to figure out how I am going to bail my company out without a gov. bailout. QUESTION: Do these bailouts have to be paid back when business picks back up. If not, please let me know how I can get one of these great loans. I need a couple of billions dollars too…
By now, I don’t believe CitiBank, anybody in the Bush Administration, the incoming Obama Administration or Congress when it comes to this entire bailout business. I’m deathly tired of their confiscation of my money, not theirs, to protect their butts from bad decisions while standing in front of cameras and telling us how they’re trying to help the public.
Stop stealing my money and let me take care of my kids and myself.
Even more ridiculous than bailing out the U.S. automakers.
Citi is a MULTINATIONAL company. There are branch offices right here in Brno, Czech Republic that employ Czechs, not Americans.
Why should U.S. taxpayers bail out Citi? To save Czech jobs?
With as far reaching as Citibank has it’s hands into things from housing, student loans, credit cards, etc. Why don’t we let Citi go under? FDIC would guarantee the savings and checking accounts. The loans would be zeroed out and all of their current customers would have more disposable cash. This would take a change to the street as quick as anything and be no less random than anything coming from Paulson and the Congress.
I for one think this is something that should not be happening. Why should we be bailing out private companies who made poor choices.
Where is my bailout? I could use one. I say let the US give back to the taxpayers the money that is being sent to private companies that have been stealing from the people form many years.
I just need 26,000 for my bailout and let me tell you that is a small price to pay for putting my family back in the black.
Having read the above on CitiBank and listening to the Fox News Channel where I heard that CitiBank is supporting a stadium with tax payer dollars, I felt compelled to offer the following. FIRST, I am horrified that their bailout was used for the stadium. I AM NOT IN FAVOR OF THEM GOING THROUGH WITH THIS!Where is the common sense regarding these bailouts. The tax payers should be able to vote on a subject such as this.
I also believe that all these bailouts will serve other purposes than to help all of their clients. Common sense in the election, on selecting officers of the White House committees, forwarding tax payer money to those, so called, in need. How about the company taking all of their employees on an expensive and lavish trip! My family is in need as well. Where is our help coming from! You said it, “no where”. We citizens work so hard for every dollar we have; and it has done us in. A small portfolio to help my husband and myself (72 and 70 years old), has fallen so low that each night we go to sleep feeling that investing might might not have been the ‘way to go’.
Help all of us, please! Use common sense when making decisions! The land of opportunity and freedom is letting us down, in my opinion.
Thank you for hearing me out. I/we just love Fox News.
Well, it’s “WHO YOU KNOW!”. This is all outrageous. The USA is owned by foreigners and we should be paying off our debts and own ourselves before we bail out companies who thumbed their noses at change and our own furture needs. These companies mismanaged their money and now want more to pour down the same rathole. Until they restructure their companies and pay themselves a normal paycheck, then they shouldn’t receive any handouts. My business is struggling and I wouldn’t think of asking for a handout. What I don’t understand is why one person should be paid $36M when the company is failing, and even if it weren’t failing, why does any one person need that much money?
This is just PLAIN MADNESS! First the Corporate Executives should be investigated and criminally charged! Citibank just thoughtn that they would jump on the band wagon with all the other criminals in the Corporate world. This makes me sick. Whay are the taxpayers going to have to bail out these crooks? Citibank is part of the problem that got America in this economic situation through their greed and fraudlent interest rates. How is it that they can afford Wachovia and now they are going under?
What is next?
If Citibank is allowed to pay the NY Mets $400 million to name a Stadium, there should be prison terms handed out all around. 1 of 5 Citi Employees may lose their jobs, and we are still talking about naming rights on a stadium? Have we lost our minds? Or just our hearts and souls?