Monday, January 26, 2009

Citi Bank Flying High on TARP Money

In the January 26, 2009 edition of the New York Post in an article written by By Jennifer Gould Keil and Chuck Bennett entitled, JUST PLANE DESPICABLE 'RESCUED' CITI BUYING $50M JET, reveal that Citi Bank is planning on taking delivery on a $50 Million luxury jet with leather seats, sofas and a top of the line entertainment system. The Title of Ms. Gould Keil and Mr. Bennet's article hits the nail on the head. This is despicable. Citi has just taken massive amounts of government TARP money offered to them by former Secretary of Treasury Paulson and the Economic Wizard, former President George W. Bush. Obviously Citi Bank is not in such dire straits if they can plop down $50 Million for a luxury jet.

To paraphrase Shakespeare " something is rotten in Washington". Why are the banks being rewarded with Federal Money for bad business practices? Just like in the lead up to the Iraq War, the story keeps changing, first Bush, Paulson and Company said that the crisis was caused by 5 % of the mortgages in America in default, and that would collapse the financial system, that is an absolute lie. There is no way that 5% of the outstanding mortgages would cause anything but a minor blip on the balance sheets of these financial institutions. Then the story shifted to "bad assets" on the balance sheets, another lie. Then the story shifted to "we need to give the banks $850 Billion immediately to forestall a complete economic meltdown. They settled for half, have not even finished distributing it yet, and guess what, there was not a meltdown. So the immediacy of The Republican Bush Bailout was another lie. The truth be told, these financial institutions have created paper trades without any backing assets, they have leveraged this paper, increasing the value with every trade, until someone was stuck holding the bag with no underlying assets. So, the financial wizards that they are, they decided to blame the crisis on the working class who could not pay their "special" mortgages that the banks concocted to suck every last cent out of them. Now the Federal Government and an accommodating Federal Reserve have given the banks more than the value of all outstanding mortgages and what do they do with it, why of course buy a luxury jet.

It is time for the American People to be first in line. The Financial Games that these people have played are the one and only cause of the current economic crisis, the entire world can not be in an economic crisis because of a 5% default rate in mortgages, when that is close to the normal historical default rate. There is something rotten here, and in the case of Citi Bank, as Ms. Gould Keil and Mr. Bennet have stated, it is despicable.

Add to Google

No comments: