Dean Baker: Don't believe the Treasury hype...
And for the record, Citigroup received $45 billion in TARP funds, a $306 billion taxpayer guarantee of assets, billions in FDIC-backed debt, ultra-cheap access to the credit markets by virtue of being government owned, hundreds of billions from TALF, TAF and other Fed programs at near-zero rates, plus billions from the Fed's ZIRP policies, and QE purchases. Is there anything I've missed?
This theme of lying about bailout paybacks is becoming a habit for Geithner and his corporate Treasury pets:
---
Source - AP
WASHINGTON — The government said late Monday it had reached a deal to sell its remaining holdings of Citigroup common stock and will end up turning a profit of $12 billion on its bailout of the giant bank.
The Treasury Department said that a final offering of about 2.4 billion shares of Citigroup Inc. common stock had been priced at $4.35 per share. With the proceeds of the sale, the government will have realized $57 billion on its bailout package for the big bank.
Citigroup received $45 billion in taxpayer support late in 2008 in one of the largest bank rescues as the government struggled to contain the worst financial crisis to hit the country since the 1930s.
Of the $45 billion in taxpayer support provided to Citigroup, $25 billion was converted to a government ownership stake that the Treasury has been selling off since last spring. The bank repaid the other $20 billion in December 2009.
Treasury said that with the pricing of the last 2.4 billion shares of common stock on Monday, it would receive $31.8 billion from the sale of common stock plus another $2.9 billion in interest and dividends.
The $57 billion total also includes $20 billion from Citigroup's December 2009 repayment of TARP money and another $2.2 billion from the sale of trust preferred securities held by the government.
"By selling all the remaining Citigroup shares today, we had an opportunity to lock in substantial profits for the taxpayer and avoid future risk," said Tim Massad, the Treasury official who heads up the bailout program.
"With this transaction, we have advanced our goals of recovering TARP funds, protecting the taxpayer and getting the government out of the business of owning stakes in private companies," Massad said in a statement.
Treasury had disposed of about 5.3 billion shares at an average price of $4.05 before Monday's pricing of the remaining shares. With the pricing of $4.35 for the shares offered on Monday, Treasury's average price for its entire 7.7 billion shares of common stock will turn out to be $4.14.
Monday's deal, for which Morgan Stanley acted as bookrunning manager, is expected to close on Friday, Treasury said. Citigroup is paying the underwriting fees.
Citigroup common stock closed at $4.45 in trading Monday and has ranged from a low of $3.11 to a high of $5.07 over the past 52 weeks.
---
More detail is here:
At least we know Jim Rogers loves Tim Geithner, right..?...
---
No comments:
Post a Comment