Government announces another taxpayer funded bailout...this time it's Citigroup, and the gov't will take a $20 billion dollar stake in the firm

[Terminator]

WASHINGTON (AP) — The government unveiled a bold plan Sunday to rescue troubled Citigroup, including taking a $20 billion stake in the firm as well as guaranteeing hundreds of billions of dollars in risky assets.
The action, announced jointly by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp., is aimed at shoring up a huge financial institution whose collapse would wreak havoc on the already crippled financial system and the U.S. economy.
The sweeping plan is geared to stemming a crisis of confidence in the company, whose stocks has been hammered in the past week on worries about its financial health.
"With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy," the three agencies said in a statement issued Sunday night. "We will continue to use all of our resources to preserve the strength of our banking institutions, and promote the process of repair and recovery and to manage risks," they said.
The $20 billion cash injection by the Treasury Department will come from the $700 billion financial bailout package. The capital infusion follows an earlier one — of $25 billion — in Citigroup in which the government received an ownership stake.
In addition, Treasury and the FDIC will guarantee against the "possibility of unusually large losses" on up to $306 billion of risky loans and securities backed by commercial and residential mortgages.

[MacLean]

Dear God,

Please whap W on the head and remind him he's supposed to be conservative.

The auto industry he can explain, even if I don't agree with him. Banks? Banks make no sense.

Amen.

[Twan007]

well - here I am wondering - since my taxes are helping bail them out, does that make me a stockholder now?

or is the gov't the stockholder - and to what extent, will they keep buying - err, i mean bailing out every private enterprise to the point where the gov't owns everything?

hmmm

[Bob Loblaw]

well - here I am wondering - since my taxes are helping bail them out, does that make me a stockholder now?

This financial crisis stuff is WAAAAYYY over my head, but I recall the government saying when the $700B plan was approved that the US would be "paid back" eventually by the banks and that John Q. Taxpayer would reap some reward from it...so, i guess in theory, we are all becoming "stockholders" of sorts now by virtue of paying our taxes.

I really hate all this "financial rescue" shit, but is this the only way to save the economy? I mean, if we let Citi, Ford, GM and AIG all die away in bankrupcy (because, I might add, their own stupidity and dumb business practices), will our economy crumble to nothing? If bailing them out is the only way to save the economy, then by all means bail them out. But if there's another way, we should be exploring that.

[MacLean]

The problem is Bob, the Democrats will never let a "big union" business fail.

The unions are their bread and butter.