Tuesday, March 16, 2010


"There is no US government guarantee to protect the largest financial firms, a Treasury Department official said, as a congressional watchdog criticized the $45 billion in government aid provided to Citigroup Inc. ... 'There is no "too-big-too-fail" guarantee on the part of the US government,' Mr. [Herbert] Allison said. ... 'The market clearly perceives that there is a too-big-too-fail guarantee,' Ms. [Elizabeth] Warren said. 'That gives Citi an advantage in raising capital. ... That is very valuable to Citi.' ... 'I do not understand why it is that the [US] government cannot admit what everyone in the world knows, which is that in that week that Citigroup was a failing institution,' Mr. [Damon] Silvers said. Citigroup Chief Executive Vikram Pandit, also appearing before the panel, said the bank owes a 'large debt of gratitude' to taxpayers for aiding the firm", Michael Crittenden and Matthias Rieker at the WSJ, 5 March 2010, link:

This is a joke. Can't Uncle Sam ever stop lying? Citigroup should be closed.


Anonymous said...

Maybe we should call all the monetary and debt guarantee tricks the "Rubin" put... since they become such refined tools under the ex Vampire Squid Chair...

Secretary Tim grew up learning how to apply the "Rubin" put "forcefully" and early in a crisis.

Problem is that we have the same crisis over and over...

Sovereigns and banking systems load up on debt (encouraged by their silver tongue ibankers) growth slows... indebted party defaults... foreign debt holders scream... some multinational (private, public or sovereign) restructures and guarantees the debt... and the debt markets march on.

Wash, rinse, repeat.

Just think of Citi as the washing machine. Just a way to process all the debt. Over and over.

Central banks need their Citigroups.

Anonymous said...

break 'em up

caps on size, scope and geographic area of operation in the future for any banking entity

otherwise, you wind up with a cancer that spreads

happen? doubtful

so, what to do - root for creative destruction? tit, meet wringer.