Citibank Bailout May Leave You Holding the Bag in More Ways Than One
Citigroup Bailout Leaves Shareholders in the Cold
Citibank Bailout Prevents Citibank Bankruptcy ... For Now
WMDT ABC reports that $20 billion from the $700 billion bailout package will indeed be invested in Citibank. In return, Uncle Sam - and you and I - receive $7 billion of "preferred shares." But wait, there is more!
The Washington Post reports that in addition to the bailout funds, Uncle Sam will also take on the role of protector against future losses. While Citigroup would have to eat the next $29 billion in losses it shows, the United States government will cover "most of the losses beyond that amount."
Wagging tongues assert that what is needed, really, is Citibank bankrupt, but the Citibank bailout in addition to the prior investment of $25 billion that Uncle Sam already dropped into Citigroup, may halt this process.
Citigroup Bailout and Its Effect on Shareholders
The Citigroup bailout is not as favorable for shareholders as early estimates had hoped. This Citi bailout package is supposedly going to require a curtailing of executive level pay, but it most certainly decreases share dividends to $0.01/share/quarter for a period of three years.
Citibank Bailout Rewards Bad Behavior
Citibank business practices have been making headlines over the last decade, most notably its 2004 short sale on the European bond market and its theft of funds from 53,000 credit card customer accounts.
Lest you forget, it was Citigroup's 1998 lobbying efforts, as reported by Open Secrets, that paved the way for banks to get involved in other forms of business such as insurance. Citibank lobbyists were also front and center when bankruptcy reform was discussed, and consumers currently hoping for Chapter 7 relief know how much more difficult this process has become.
Beholden to politicians, Citibank has heavily investment in the American political process, favoring the Democratic Party with $2,248,481 versus the Republican Party which only received $1,483,884. This totals $3,736,915 in overall political donations that perhaps could have been better spent protecting the company from its impending losses.
Citibank Bailout May Not Halt Layoffs
There is no word if the Citigroup bailout will prevent the loss of more than 50,000 Bay Area jobs the San Francisco Chronicle reported on last week.
Sources: http://www.wmdt.com/topstory/topstory.asp?id=3981; http://www.washingtonpost.com/wp-dyn/content/article/2008/11/23/AR2008112301665.html; http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN2636973720080826; http://www.opensecrets.org/orgs/summary.php?ID=D000000071&Name=Citigroup+Inc; http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/17/BURD146AIA.DTL
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16 Comments
Post a CommentI got a letter from Mobil/Citibank that they were raising my interest rates do to the economy as my tax dollars bailed them out once I will not help bail them out again while the people running them get their big bonus good by Mobil and Citibank my card is cut up.
I got a note from Sears/Citibank. Due to the economy we're jacking up your interest rates! I bail them out once with my tax dollars and they want to shaft us again. I also had a Citibank card that I closed after 20 years. They wouldn't negotiate a rate despite my good record.
I am not a homeowner but unfortunately have an account with Sears/Citibank. I don't owe anything but they keep putting late charges and other fees onto my account. As soon as this is resolved, I am closing this account--bye bye Citi and I'm hoping for your soon demise.
I honestly think that they would be more willing to work with us if we were behind on our mortage.I can't take picking and choosing which bills to pay to every month any more. After we paid our last payment we had $10 in our checking account for 2 weeks. I refuse to claim bankruptcy and let our house go into foreclosure.
Bottom line is that Citibank is not willing to help their customers. If any one else has any other suggestions they would be greatly appreciated.
have made our mortgage payment every month. It has been after the due date but before 30 days so it doesn't affect our credit. I begged them for a load modification and we were denied. The paperwork shows that we are in the red every month for $600, yet we make too much money. We were then offered an option to put a couple payments at the end of our mortgage. Would you believe that they told us that we don't make enough money? How contradicting is that? We even tried to refinance but they will not accept my husband's unemployment salary, which is understandable.
We have been in our little 2 bedroom house for 10 years. We also have 2 kids, a boy, and a girl. We do not have car payments because our cars over 8 years old. We live very modestly. We are not looking for a handout, just a break on our interest rate until my husband goes back to work. You try to do the right thing and you get penalized for it. I honestly think that they would be more willing to work with us if we were behind
We have a mortgage with Citimortage and my husband was laid off 8 months ago. We have made our mortgage payment every month. It has been after the due date but before 30 days so it doesn't affect our credit. I begged them for a load modification and we were denied. The paperwork shows that we are in the red every month for $600, yet we make too much money. We were then offered an option to put a couple payments at the end of our mortgage. Would you believe that they told us that we don't make enough money? How contradicting is that? We even tried to refinance but they will not accept my husband's unemployment salary, which is understandable.
We have been in our little 2 bedroom house for 10 years. We also have 2 kids, a boy, and a girl. We do not have car payments because our cars over 8 years old. We live very modestly. We are not looking for a handout, just a break on our interest rate until my husband goes back to work. You try to do the right thing and you get penalized for it. I
My house is financed through CitiFinancial. I got behind on payments and they rode my ass. Now I am getting caught back up and tried to get them to give me a better interest rate to help me out a bit. Answer from them was NO. It's not like I am asking for a handout like they did. Can they just help a little???
=)
Dang, I didn't know they were stealing off of people's cards, my wife has one. Ah, maybe too late now, but it's time to get out those scissors! Thanks for this. ..... Plus doing the math is always so sad ..... Take 300 million Americans and if Citibank gets, let's say, $60 billion, that is $200 for each and every one of us ..... ~~~ mike ~~~
What a mess and it is only going to get bigger. Well reported post. Roberta Baxter