Decline and Fall writes…Citi is carrying about $3.3tn in assets on and off their balance sheet. What is $20bn in preferred to that? Indeed, what is loss mitigation on $300bn of assets to that? This looks to me a bandage built to buy time for a bank circling the drain, not the surgery and recovery needed to heal the patient. That opens a line of speculation. If Citi won’t be allowed to fail, why isn’t the deal enough to put its safety beyond doubt? There are several possible reasons, but I’d sadly suspect first that it is because the government is in a bit of denial, still does not comprehend the seriousness of what is happening and just how many multiples of its capital Citi has frittered away. And it is probably getting plenty of help in that delusion from Citi itself, whose executives have unfortunately demonstrated either their lack of comprehension or the depth of their malevolent predatory drive from the start. More
Sphere: Related ContentTags: $3trillion in assets, Citigroup, Paulson, TARP funds
