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U.S. Could See $13-14 Billion Profit on Citi Official
Reuters via CNBC ^ | December 14, 2009 | Reuters

Posted on 12/15/2009 12:22:43 AM PST by CutePuppy

U.S. taxpayers could ultimately see a profit of $13 billion to $14 billion from Citigroup's payback of bailout investments, including dividends paid, a U.S. Treasury official said on Monday.

That amount includes the gain on the government's 34 percent stake in Citi common shares , which was close to $5.8 billion as of Friday's close, as well as trust preferred securities with a $5.2 billion face value, received in a loss-sharing agreement backing a pool of Citigroup assets.

The official also said the total also includes estimates of nearly $3 billion in dividends paid on the government's investments in the bank.

Citigroup has struck a deal with the Treasury and U.S. regulators to repay $20 billion of government bailout funds, which will include the sale of some $5 billion of Citi common stock. It will sell the rest, about $20 billion worth, within six to 12 months.

The official said the biggest variable in the taxpayers' ultimate profit will be fluctuations in the value of Citigroup common stock, and the value at which the government sells it over the coming year.

.....

(Excerpt) Read more at cnbc.com ...


TOPICS: Business/Economy; Extended News; Government
KEYWORDS: banks; citi; citigroup; finance; financialcrisis; tarp
Article doesn't mention the 5% interest on the TARP loan, so don't know if it's included in "dividend" total calculation.
1 posted on 12/15/2009 12:22:44 AM PST by CutePuppy
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To: CutePuppy

Massive, fraudulent, manipulation of numbers created the situation in first place. These vague numbers mean less than nothing. A little more concrete breakdown would be nice.


2 posted on 12/15/2009 12:26:36 AM PST by allmost
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these banks are moving away from TARP funding to FED funding. The citizen are still screwed because the losses are distributed to the entire population as inflation


3 posted on 12/15/2009 12:41:50 AM PST by 4rcane
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To: CutePuppy

This is why it is a mistake to confound TARP with the porkulous bill. TARP was an attempt to stablize financial markets. The good news is that all of the money appropriated was not even needed for that. But a smaller bill might not have provided enough confidence to the markets.

Porkulous and other Obama spending including misuse of the left over and repaid TARP funds are completely different. Obama is using this money as a slush fund. Thank fully the elections of 2010 are coming and will hopefully put an end to these types of actions.


4 posted on 12/15/2009 12:58:09 AM PST by JLS
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To: CutePuppy
There is no mention of the hundreds of billions of dollars (300+) in taxpayer guarantees for Citi Holdings’ toxic asset spin-off.
5 posted on 12/15/2009 12:58:44 AM PST by allmost
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To: CutePuppy

Article doesn’t mention the windfall the ‘government’ stands to receive (not likely) was because of money stolen from taxpayers. Taxpayers won’t see a worthless dollar of this.


6 posted on 12/15/2009 1:00:38 AM PST by Gaffer
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To: JLS

You are right on the money!

Yes, TARP needed the authority of Fed, Treasury and Congress and an arbitrarily extremely large number to stop and prevent runs on the banks (both consumer / retail and financial / commercial, through electronic funds transfers) and short selling bear raids, to make sure that there is no worry about liquidity and to unfreeze credit markets and lower high LIBOR rates to make sure that commercial paper and inter-banking lending start taking place again, before even solid AAA rated companies went bankrupt from inability to finance operations.

Politically, the problem is that Republicans are running away instead of taking credit for TARP saving the US and the world financial system from the brink of the abyss, which has been responsible for financial and economic recovery (such as it is) while Obama and Dems are capitalizing on this by touting their porkulus (which has been nothing but harmful to deficit, debt, dollar and the real economy and employment) as a stabilizing program for the economy.

Boggles the mind.


7 posted on 12/15/2009 1:29:23 AM PST by CutePuppy (If you don't ask the right questions you may not get the right answers)
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To: CutePuppy
I highly doubt that we'll be making any money off the Citi deal. If this was the case, then Citi would never have demanded welfare money to begin with.

Of course, this will be used to promote future bailouts, just as the 1979 Chrysler bailout was touted as a "success."

8 posted on 12/15/2009 2:57:57 AM PST by pnh102 (Regarding liberalism, always attribute to malice what you think can be explained by stupidity. - Me)
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To: CutePuppy

Suppose it’s true that $13 or $14 billion gets made on Citi. What’s the point? It just goes down the crapper seconds later. The moment a BS proclamation like this is made, every RAT in DC has the so-called profit burning another hole in our pockets.


9 posted on 12/15/2009 3:29:08 AM PST by Dahoser (Separation of church and state? No, we need separation of media and state.)
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To: pnh102

Alright - $13-15 Billion profit divided by 150 million Americans who pay taxes - where’s my check? Isn’t that how this was supposed to work? /sarcasm off


10 posted on 12/15/2009 3:45:03 AM PST by CBF ('Behind every blade of grass.' Let the White Suits come. F'n U.N. scum.)
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To: CutePuppy

I thought we sunk about $400 bil into that. So we are going to get $400+ bil ‘back? Sounds like a load of horse-hockey. Not to mention, the $$ will go to pols in DC. Not ‘us’ folks who ponied up the cash. The will spend it on .......crap.


11 posted on 12/15/2009 3:56:11 AM PST by jbp1 (be nice now)
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To: CutePuppy
Hmmmm... I thought profit was a bad thing.

It appears it's only considered evil, when someone else makes it.

12 posted on 12/15/2009 4:05:35 AM PST by Texas Jack
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To: JLS; CutePuppy

Thanks for your instructive posts


13 posted on 12/15/2009 4:20:37 AM PST by Molly Pitcher (We are Americans...the sons and daughters of liberty...*.from FReeper the Real fifi*))
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To: CutePuppy
Remember TARP was Bush's plan to stop the banks from collapsing, and causing a world wide depression... If it worked (which it now appears it has) Bush should get all the credit.

On the other hand, the stimulus which was 100% Obama has been a total failure.

14 posted on 12/15/2009 4:58:52 AM PST by TexasFreeper2009 (Obama lied, the economy died)
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To: 4rcane
these banks are moving away from TARP funding to FED funding.

You have any backup for this claim? The Fed has been winding down the loan programs for the banks.

15 posted on 12/15/2009 6:34:17 AM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: Dahoser
It just goes down the crapper seconds later. The moment a BS proclamation like this is made, every RAT in DC has the so-called profit burning another hole in our pockets.

That's true, but a different issue entirely.

To paraphrase the Parkinson's Law (Work expands so as to fill the time available for its completion.) and Murphy's Law (There is never enough time or money) - The ability of Congress (particularly Democratic one, though Republicans proved they are no strangers to the concept) to spend Other People's Money expands as more money becomes "available" (which in itself seems to be a misnomer, since they can just "borrow" on the unlimited credit card of taxpayers' "future" money).

16 posted on 12/15/2009 10:00:09 AM PST by CutePuppy (If you don't ask the right questions you may not get the right answers)
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To: TexasFreeper2009

Correct. See also posts #4 and #7.


17 posted on 12/15/2009 10:03:29 AM PST by CutePuppy (If you don't ask the right questions you may not get the right answers)
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To: jbp1
I thought we sunk about $400 bil into that.

Not quite that much. Geithner: TARP to Earn Healthy Profit for US - Reuters, 2009 December 14

"This month alone" is, of course, because the Treasury / FDIC / WH finally allowed banks to repay TARP, which many larger banks were trying to do for some time, but required to increase their capital reserves. Most of the hole in TARP lies in AIG (while Citi itself has not recovered, its TARP repayment is more than in full), partly because government managers rushed to sell some valuable assets, and non-financial entities such as GM and Chrysler. Fed actually made money for its backstop on the sale of Lehman Brothers, most of it to UK's Barclays.

Not to mention, the $$ will go to pols in DC. Not ‘us’ folks who ponied up the cash. They will spend it on .......crap.

Correct, see post #16. Here's how Treasury spokesman sees the money to be used, in the rest of the TARP repayment statement :

Not much more needs to be said, but of note, President Bush was the first one to misuse TARP fund when he decided to "lend" from it to "save" automakers and their unions.
18 posted on 12/15/2009 10:29:28 AM PST by CutePuppy (If you don't ask the right questions you may not get the right answers)
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