Uh, I changed my mind......says Citi. The bit I knew about it seemed like another screwing for the major shareholders, including the Saudis and all the rest of the suckers. They must have raised enough holy hell to queer the deal.
From Jesse:
Treasury Cancels Plans to Sell Citi Stake After Failed Equity Offering Stings Shareholders
The shareholders of Citigroup should be furious at the greedy and reckless actions of Citi's management in diluting their shares in order to obtain a freer hand in granting themselves fat bonuses.
Tonight's equity offering failed to bring in a sufficient price, serving up a significant 20% discount to existing holders of the stock.
And the de facto largest shareholders of Citigroup, the US taxpaying public and all holders of US Federal Reserve Notes, took quite a paper loss on their holdings because of Tim and Larry's miscalculations regarding the market's willingness to swallow more large chunks of questionable debt riddled equity from the US zombie banks.
Tim decided that because of this failed offering, the Treasury will cancel its plans to unload your 33% of Citi's shares, preferring to consider the quick flip a longer term investment, as failed trades are often wont to become.
And in retrospect, Timmy's decision to convert the government's preferred stock to common stock is looking to be exceptionally.... stupid, or fishy, or all of the above.
Never fear. We are sure that the Obama Administration can reach out to the Working Group on Markets to put a bid under those shares at some future date, perhaps with help from puffed up government estimates of the vitality of the US economy as a wind at its back.
Technically, Citi can pay back the TARP money from the proceeds. Can they have the gall to do that and pay themselves bonuses this year to boot, which is the basis for this exercise in dilution in the first place? This shows the farce that the Obama financial reforms really are. Nothing has changed except that big bank losses were transferred to the public debt, and the excess of the US financial sector continues with government support.
Financial engineering to maintain an imbalanced status quo, even with the mighty Zimbabwe Ben at the helm, is always and everywhere an economic morass, a Vietnam of moral hazard, and a political tarbaby of increasingly distasteful policy decisions. All for the sake of a wealthy few, the rapacious predatory class, an economic elite that traffics in betrayal and the breaking of oaths.
Such is the tangled web we weave, when first we practice to deceive.
Gentlemen, start your presses... |
