A report by a US government watchdog into the rescue of Citigroup quotes Mr Geithner as saying: “What size and mix of business do you classify as systemic? … It depends too much on the state of the world at the time. You won’t be able to make a judgment about what’s systemic and what’s not until you know the nature of the shock.”
Darrell Issa, chairman of the House of Representatives supervisory committee, said Mr Geithner’s “candid acknowledgement that it is not possible to measure what’s ‘systemic’” was “concerning”.You bet your ass it’s “conerning”—what exactly is Tinny Timmy trying to pull here? Because it’s impossible to think that Geithner is putting on the Wishy-Washy Show for no ulterior motive.
This reaction from the U.S. Treasury secretary came because of a recent report outlining the bailout of Citigroup back in 2008.
Citi was on the brink of collapse—depositors were yanking funds, counterparties were covering themselves, while its stock price fell from $22 to less than $1 in a matter of weeks—and yet the Citigroup leadership was bitching and moaning about the government bailout!
According to Bloomberg:
The report yesterday by the inspector general of the Treasury Department’s Troubled Asset Relief Program, Neil Barofsky, lays out bank executives’ efforts to get a better deal during three days of negotiations in November 2008 that federal officials later dubbed “Citi Weekend.” Two months earlier, the bankruptcy of Wall Street firm Lehman Brothers Holdings Inc. had sent global markets into a tailspin.
“Citigroup executives were concerned that the government’s terms were very expensive in light of the amount of assistance provided,” according to the report. The New York-based bank didn’t agree to the terms until late Sunday night, when a deposit run was already beginning in Asia.
Now to all this, add the fact that—for the first time in three years—the big American banks are poised to start handing out dividends . . . after three years of Federal Reserve largesse, three years of of government assistance, and three years of obscene bonuses.
On Friday, JPMorgan Chase will announce its financial performance, while the other banksters—Citi, Goldman, Wells, BofA—will announce next week.
The banks are expected to post profits of $70 billion for 2010 (you read right—Seventy Billion Dollars of profit that your tax dollars supplied). Guess finally, the banks are realizing they have to throw crumbs to the hoi polloi, to keep them docile.
It’s expected that they’ll begin announcements of dividends to shareholders soon thereafter . . . but hey, that might change, so don’t hold your breath.