With new taxpayer-funded bailouts at Citigroup (NYSE: C) and Bank of America (NYSE: BAC) making headlines this week, it's a good time to stop and ask ourselves: Do the people in Washington have any idea what they're doing?
The New York Times' Joe Nocera poses an interesting contradiction: "Think about it: Citigroup is slimming down. Bank of America is bulking up. The government is essentially backing both approaches. It makes no sense. "
It sure doesn't. Nocera suggests that setting up a "bad bank" to move the worst assets of banks off their books might be the best way to stop the vicious cycle of writedowns and capital infusions. Maybe he's onto something with that but his first point is the best one.
When we have an economic policy that provides financing for one bank to make acquisitions and another bank to split itself up, can we really trust the leadership?
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Reader Comments (Page 1 of 1)
1-17-2009 @ 5:10PM
Lela Hayes said...
We as citizens need to insist that the government stop giving our money away to banks. They are hoarding the bailout money and acquiring other financial institutions with it instead of helping the people of America get through this tough time.
1-17-2009 @ 5:25PM
al said...
If this were any other business or industry, the management team as well as the Board would have their collective butts fired in a nanosecond.
Instead, unfortuneately, we see weeks and months of inaction, poor decisions, BSing, lying and now going back to the well for another handout.
So Padit split Citi in two--big deal. IT WILL NOT MAKE A DIME MORE THAN IF IT WERE STILL ONE INSTITUTION. Credit losses and mark to market pricing will continue as before. The only thing that has changed is Pandit can now bring on a few more of his friendsto run the ugly twin. Just a few more million.
The segments/businesses he has put in the"bad" bank are dogs that Citi has been trying to sell for some time. If there were no interested parties when the economy was good, what the hell is he talking about now?
Add to that the remark yesterday of the CFO " we are in no rush to sell anything"
Hey jerk, the bed is burning-- act now !!!!
THERE IS NO HOPE FOR CITI WITH A CEO AND CFO LIKE THESE TWO !!!!!!!