[attackDoold]

Looks like it is turning into one hell of a recession.

[electmobile]

Bah! The recession is like global warming - MYTHICAL!

[bmwservis]

YTD stock market performance has been the worst since 1931.

[Espacamlisa]

Remains to be seen how much damage to non-financial areas will be done by the end of easy credit.

[Peertantyb]

I think my 401k is going to hell in a hand basket. :\

[SOgLak]

I will say this:

I cannot directly attribute, blindly, this inexcuseable economy to one person, GWB.

We have been contributing to this indirectly and directly for years with lavish lifestyles, minimal accountability by the very elite of the elite.


What I will say is by stating with a conviction that it is acceptable to maintain Plausible Deniability is to me unconscienable

Many sitting presidents have done this very thing, over and over, I do feel somewhat that GWB was sitting on top of Old Smokey when she blew, and yes, certainly did some to contribute to its increasded volatility and our certain demise. He did continually say early on, we were not in but for sure we were just outside of freakin recession


Its very bad in the construction Industry mow, at least in southeastern USA


I probably am most bothered by companies and governments allowed to continually spend our hard earned taxpayers funds and then simply walk away when failure envelopes them. Big time CEO's allowed a Golden Parachute, even though a company is bankrupt, shareholder funds depleted, but yet they get paid irreguardless......

I cant fathom exactly how that works, or perhaps should say how that can be allowed?

i reckon one thief overseeing another thrif in the good old boys club is how.......

[sauppyshurb]

Originally posted by Oerdin
My retirement plan has been reduced to becoming a Walmart greeter. Oerdin, sad that is true my friend, sad indeed

[mbaueee]

Citigroup, U.S. government near bailout deal: WSJ
http://online.wsj.com/article/SB122747680752551447.html

Citigroup Inc. is nearing agreement with U.S. government officials to create a structure that would house some of the financial giant's risky assets, according to people familiar with the situation.

While the discussions remain fluid and might not result in an agreement, talks were progressing Sunday toward creation of what would essentially be a "bad bank." That structure would help Citigroup cleanse its balance sheet of billions of dollars in potentially toxic assets, these people said.

The bad bank also might absorb assets from Citigroup's off-balance-sheet entities, which hold $1.23 trillion. Some of those assets are tied to mortgages, and investors have worried such assets could cause heavy losses if they land on the company's balance sheet. Citigroup also has about $2 trillion in loans, securities and other assets on its balance sheet as of Sept. 30.

Behind the push is a broad effort to shore up faith in the New York company, which saw its stock price tumble by 60% last week to a 16-year low.

Under the terms being discussed, Citigroup would agree to absorb losses on assets covered by the agreement up to a certain threshold. The federal government would cover losses beyond that level, people familiar with the matter said. One person said the new entity is expected to hold about $50 billion of assets.

A Citigroup spokeswoman declined to comment on the discussions.

It is unclear whether the U.S. government will take an equity stake in Citigroup in return for providing a financial backstop. Also uncertain is if Citigroup would get a government loan to finance the facility. The government took that approach with insurer American International Group Inc. in late September.

It wasn't known Sunday afternoon if Citigroup will have to make changes to its executive ranks, board or elsewhere inside the company in return for getting government assistance.

After weekend discussions between Citigroup executives and officials at the Federal Reserve and Treasury Department, the parties are hoping to unveil an agreement Sunday evening, the people said.

As Citigroup shares fell last week, Chief Executive Vikram Pandit and other top executives insisted that the plunge wasn't a threat because the company has plenty of capital and liquidity. But by Friday, bank officials were hoping for a public expression of confidence by the government, believing that would help reassure clients and customers.

One rescue structure under consideration would resemble part of the $150 billion bailout plan that the government struck with AIG in November as part of a restructuring of the previous bailout. Two vehicles, funded largely by as much as $52.5 billion in government money, were created to take on risks from some of AIG's souring assets, including exposure to credit derivatives.

That deal also reduced interest costs on AIG's $60 billion loan from the government. Citigroup is truly a monstrosity, holding assets 4 times that of Lehman Brothers. If this thing goes down, the damage to the financial system and world economy would be unimaginable. But it seems that a bailout is almost certain.

[Fouttysotlalf]

Originally posted by One_more_turn
Citigroup, U.S. government near bailout deal: WSJ
http://online.wsj.com/article/SB122747680752551447.html



Citigroup is truly a monstrosity, holding assets 4 times that of Lehman Brothers. If this thing goes down, the damage to the financial system and world economy would be unimaginable. But it seems that a bailout is almost certain. Another weekend deal to beat the market killing them?

[Adiamant]

Seriously, after Enron's games with off balance sheet entities why didn't they enact some sort of reform designed to stop this practice or at least require companies to disclose them to investors?

[Bxbhtjnr]

EDIT: That really has potential as a sig line.

[QvhhbjLy]

here is the deal

http://www.bloomberg.com/apps/news?p...VQ8&refer=home

Citigroup Inc., facing the threat of a breakup or sale, received $306 billion of U.S. government guarantees for troubled mortgages and toxic assets to stabilize the bank after its stock fell 60 percent last week.

Citigroup also will get a $20 billion cash injection from the Treasury Department, adding to the $25 billion the company received last month under the Troubled Asset Relief Program. In return for the cash and guarantees, the government will get $27 billion of preferred shares paying an 8 percent dividend. Citigroup rose as much as 41 percent in German trading today.

.
.
.

Terms of the asset guarantees mean Citigroup will cover the first $29 billion of pretax losses from the $306 billion pool, in addition to any reserves it already has set aside. After that, the government covers 90 percent of the losses, with Citigroup covering the other 10 percent from assets, including residential and commercial mortgages, leveraged loans and so-called structured investment vehicles.

Unlike the bailouts of insurer American International Group Inc. and mortgage companies Fannie Mae and Freddie Mac, no management changes were required and Pandit gets to keep his job, government officials said. The agreement does call for the government approving executive compensation.

306 billion covered, Citi covers the first 29bn, the gov picks up 90% of the bill after that... and gains on the upside if the company recovers which looks like some middle lane - decent deal for both sides, but also punishes more prudent competitors, as Citi gets out easy - assuming this is enough to take them trough the rough period.

Emerging markets exposure is not covered.
Citigroup remains vulnerable to losses on loans and securities outside the U.S., said Peter Kovalski, a portfolio manager at Alpine Woods Capital Investors LLC in Purchase, New York, which oversees $8 billion and holds Citigroup shares.

The government plan “gives them a little bit of breathing room, but longer term, things may deteriorate and losses increase,” said Kovalski. “The Achilles heel with Citi is their exposure to emerging markets and what’s going to happen when emerging markets turn down, as they’re doing now.”

[SimSlim]

This is not the solution. More troubles are ahead for citi. $300 billion is a fraction of citi's total assets. But that should give it enough breathing space for the next couple of months.

I think it's conceivable that at the end of this crisis, ALL of Wall Street's highly leveraged financial institutions will be nationalized. Common shareholders of Morgan Stanley, Goldman Sachs, Bank of America, JP Morgan Chase, Barclay's, Banco Santander, Credit Suisse, Deutsche Bank, HSBC, UBS are ALL at great risk of being wiped out. It's likely that world's financial system will be fundamentally changed.

This is a very dangerous time for small investors.

[Zugaxxsn]

Didn't they already spend (with no real effect) the first $300 billion? If they spend another $300 billion on just Citi Group then that's $600 billion of the $700 billion bailout over and done with and we still have about two months before Obama even takes office. :\

[maclaudser]

Originally posted by Grandpa Troll
I will say this:

I cannot directly attribute, blindly, this inexcuseable economy to one person, GWB.

We have been contributing to this indirectly and directly for years with lavish lifestyles, minimal accountability by the very elite of the elite. Why are you blaming them? They don't vote in the government all by themselves. The fact is that you've all been living in a dream (and you still are, once the environmental externalities of your current economic system are factored in).

What I will say is by stating with a conviction that it is acceptable to maintain Plausible Deniability is to me unconscienable

Many sitting presidents have done this very thing, over and over, I do feel somewhat that GWB was sitting on top of Old Smokey when she blew, and yes, certainly did some to contribute to its increasded volatility and our certain demise. He did continually say early on, we were not in but for sure we were just outside of freakin recession

Its very bad in the construction Industry mow, at least in southeastern USA Again, you trudge off to the ballot box and vote for these cretins, so who's to blame?

I probably am most bothered by companies and governments allowed to continually spend our hard earned taxpayers funds and then simply walk away when failure envelopes them. Big time CEO's allowed a Golden Parachute, even though a company is bankrupt, shareholder funds depleted, but yet they get paid irreguardless...... Again, you guys vote for the people who allow this, and, more importantly, you vote for the current economic system that you have. Any government that attempted to force financial discipline on US citizens would have been voted down. In the end you only have yourselves to blame.

[jurnalkduo]

I wonder how hard it would be to re-institute Glass-Steagall in the current climate ... I know if they tried, and any of my representatives voted against it, I'd actively campaign against them myself in 2010, if they were still my representative then. I don't know how many others out there feel the same way as me, though.

Heck, I wish Congress had required, as a part of the bailout, a Ma Bell-like breakup of Citigroup/Chase/BoA/etc.'s retail banking arms, down to at least regional level if not state level (regional being somewhat dangerous in case, say, Steel or Automobile or ... industry were to collapse, killing the midwest/east/etc. and thus taking down a whole region's bank... though at least that would be cheaper to bail out). Do that and add in leveraging limits (12:1 or, better yet, 5:1) and I'd be okay with this bailout crap.

As it is, I certainly would vote for any candidate running on a "Hell No We Won't Bail Out" platform ... not that almost any in IL were doing so in 2008

[chuviskkk]

On the bright side, I opened a time deposit when inflation was peaking. A real return topping the 5.2% I'm nominally receiving sounds like a darn good investment at the moment.