25 November 2008

rolling out the red (ink?) carpet for future american oligarchs ?

re: Citigroup ... if you give them $20Billion under an agreement in which they are responsible for the next $29Billion in losses and you (the FedGov) will assume liability for any losses over and above that, have you not just:

a: limited their future losses to $9Billion ?
b: incentivized them to divest themselves of their worst assets without regard to price ?
c: created an opportunity for third parties (insiders too ?) to purchase those 'bad' assets at prices so low that they then become potentially profitable (with the booked "losses" billed to the taxpayer?)

something sounds very wrong with this "rescue" until you remember that it's the Bush Administration with H.R. Haldeman's former aide from 1972/3 as the Secretary of the Treasury (who just happens also to be the former CEO of Goldman Sachs)

p.s. can you really "rescue" paper (now digital) "money" losses counted with 9 zeros by creating more digital money counted with 12 zeros ? (i guess we're about to find out)

p.s.s. if Citigroup operates in 109 countries, why is their "rescue" only the US' (taxpayers) burden ?