More bailouts for large banks, and more burden put on taxpayers… Happy Thanksgiving!
The government has guaranteed around $300 of bad debt in Citibank and has also given them $20 billion in a direct capital injection. And, from the sounds of it, this will not be the last bailout of this sort. From the linked article:
Citi and the US government made it clear that the Citi arrangement would be extended to other banks that pose risk to financial system stability, if need be. That is why the arrangement included broad swathes of Citi’s assets but was not tailor-made to suit Citi alone.
Anyone else think the other major banks aren’t going to line up, hands held out, asking for similar treatment? This is particularly interesting coming right after Congress showed some spine and told the Detroit auto makers to get a valid plan in hand before coming back to ask for funding. If there were any doubts about what the pecking order is with regards to who gets money from DC, this should help clear things up.
Looking at the largess being handed out right now, I can’t wait to see what kind of stimulus package will be delivered to Obama when he takes office in January. Anything south of a trillion dollars or so won’t be seen as game-changing I’m thinking.