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Nationalization Cluster**** In 4… 3… 2…

It literally was only a matter of time, and it really makes no difference how “temporarily” businesses are absolutely-definitely-totally-not-really nationalized. Patronage politics will show their ugly face and give us the insanity of a government tempted to dumb down a business it had to take over because of poor performance. Citi isn’t even technically nationalized yet and already, it’s starting. Latest nonsense follows:

Citigroup’s rivals are lobbying the government to shackle its investment banking business and international operations if the authorities nationalise or take a large stake in the troubled financial group.
The increasing likelihood the US Treasury will end up with a big holding in return for throwing Citi its third lifeline in less than four months has prompted other Wall Street groups to go on the offensive in Washington.

Apparently, the slippery slope is covered in melted butter runoff from all the popcorn being consumed on the sidelines.
Rivals want curb on nationalised Citi [The Financial Times]

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111 Responses to “Nationalization Cluster**** In 4… 3… 2…”

  1. guest says:

    Realistically, Citi is either going to be effectively nationalized, or it’s going to end up completely controlled by the Saudis. Free marketeer though I am, I prefer the former.

  2. guest says:

    This ‘little’ experiment will be talked about in business schools years from now under the chapter on Inappropriate touching by government

  3. guest says:

    This whole “Citi-nationalization” thing smells as bad as when the midcontinent basis traders take their shoes off in the afternoon.
    ~Jimmy Crack Korn
    East Texas Gas Trader

  4. guest says:

    If you’re going to nationalize it, you may as well just start winding it down. Seriously. There are worse things, and orderly dissolution might be the best thing to do with the house that Sandy built.

  5. guest says:

    And just wait for the pronouncements coming from congressmen about what the government should do with C and BAC.
    That will be fun.

  6. guest says:

    what citi needs is vikram painting his face blue, putting on a skirt and running up and down the east coast like mad, chopping the heads of everyone that citi ows money to, while shouting Kablaahh!! Freedom!!!!

  7. guest says:

    well, we have seen what happened when it was controlled by an injun

  8. guest says:

    I’m only OK with this is Maxine Waters is made Board Chairwoman at Citi.

  9. guest says:

    Slumdog @7…..read this and hope you can ever be as good…..
    http://theanksden.wordpress.com/2008/03/06/the-indian-billionaires-forbes-2008/

  10. guest says:

    maxine waters looks so subprime

  11. guest says:

    Sprinkle with curry and put a fork in it already

  12. Thoth says:

    “the slippery slope is covered in melted butter runoff from all the popcorn being consumed on the sidelines.”
    nice.

  13. guest says:

    @EP
    Anarchy it is then….

  14. guest says:

    @ 9. Wow, it must be tough being born to the elite in a country with billions of indentured servants.

  15. guest says:

    @8
    “Did we take FEES when we…(pauses)….(aide whispers in ear)…sold that BOND offering? WHY DID WE DO THAT? Any of you?”

  16. guest says:

    Punini @14…….I thought we were talking about India, not the USA.

  17. Investorcluzo says:

    huddle up team. here’s the plan:
    shut down (what’s left of) s&t – no need for large capital injections (which they don’t have);
    ring fence “toxic” assets in so called “bad bank”;
    spin off/sell the investment bank – bankers no longer under tarp, able to get paid outrageous fortunes once again;
    sell off remaining commercial bank in pieces to provide capital to support “bad bank”;
    hose current common shareholders;
    on two, break!

  18. guest says:

    Maxine and crew were worried about giving opportunities to minority run firms when the financials are in a death spiral….how do these people get elected????

  19. guest says:

    @9 funny that everyone on that list is worth more than citi equity..

  20. guest says:

    Give the minorities the rope contracts for when we hang all the idiots who got us into this mess.

  21. guest says:

    @18, by being worried about giving opportunities to minority run firms up to and including for cleanup after the Apocalypse.
    It’s simple. Maxine operates under two asumptions:
    1) It’s always somebody else’s fault.
    2) Poor people need more free stuff.
    So long as she does this, the question isn’t how does she get elected, it’s how she could ever lose an election.

  22. guest says:

    herro prince al talaweed here, can someone tell me the irr on my latest citi cash injection?

  23. guest says:

    15, well played.
    I LOL-ed. Then, cried a little.

  24. guest says:

    BAC will not be nationalized. Their tier 1 ratio is through the roof!

  25. guest says:

    @8 Classic… Barney for Chairman

  26. guest says:

    Coming up on the History Channel…

  27. guest says:

    Again, how will you know when it’s over?
    When all the CEOs and directors have resigned… from most banks worldwide.

  28. guest says:

    I found a side gig to supplement my IB income….There are a lot of common denominators.
    http://www.franchisewire.com/article.php?id=2396

  29. guest says:

    “Citi’s capital base is very strong and our Tier 1 capital ratio as measured at the end of the fourth quarter was 11.9%, among the highest in the industry”
    Can’t you guys read?

  30. guest says:

    @29 You actually believe anything kenny boy’s crew is telling you? what a joke. They also said BSC’s capital ratio was strong and they had no balance sheet issues whatsoever, in public, on record, 4 days before going under.

  31. guest says:

    the regular people are wondering if they should take their savings out of citi.

  32. guest says:

    not if you have less than 250k . . .

  33. guest says:

    @31
    The “regular” people are regular idiots, especially the ones that voted for Maxine Waters.
    FDIC insurance.

  34. guest says:

    Can someone put AIG out of its misery, or will a gov’t-owned Citi be forced to lend to it?

  35. guest says:

    Maxime Waters is no dumber than the fucks who work/ed for the biggest banks in the country – present company included.
    Don’t delude yourself into thinking otherwise…

  36. blndebnker says:

    This is just insanity. The government needs to back off and just let Citi die if that’s what’s in the cards. Though Cluz’s plan is good, no one in a decision making capacity anywhere seems to get behind logic these days.

  37. guest says:

    I am sure it is only a coincidence that the ad on the rss feed was for Goldman Sachs.

  38. blndebnker says:

    @30 – #29 can correct me if I’m wrong, but I’m going to venture a guess that he/she was going for sarcasm there.

  39. Investorcluzo says:

    @24 – unfortunately, the roof, the roof, the roof is on fire..!
    @29 – again, what they didn’t tell you (or calculate for you) on page 30:
    http://library.corporate-ir.net/library/71/715/71595/items/320681/9DFCFBCF-0D8C-446F-BF7E-0D43D747EA84_4Q08Presentation.pdf
    the tce ratio is 2.64%. not so hot for a bank with a lot of bad asses, er I mean, bad “assets”!
    perhaps the hick from charlotte should try his hand at pig farming…
    @blndebnker – good lookin’ out.

  40. Novice says:

    @36 Wasn’t that done last year, except the bank was named Lehman?
    Cluzo’s plan is good but everyone seems to consider Citi shareholders inviolate even though they’ve already lost their shirts.

  41. blndebnker says:

    @Novice – exactly. And though that sucked, the world kept on spinning. Not to be a cliche but throwing good money after bad hasn’t done squat toward fixing anything.

  42. guest says:

    Amazing how “conservative free marketers” have morphed us into a socialist state. And it all strted with the phrase, “We just want a fair profit…”

  43. guest says:

    @42, There is a significant difference between making poor, but informed, decisions and not having a fucking clue what you are talking about. The former entitles the subject to be considered but questioned. The latter should be ignored. Guess which group Ms. Waters is in.

  44. Novice says:

    @blnde,
    I still believe in TBTF, but I say it’s time for a haircut and giving Bill Gross ownership of the shitshow (well, him and the other bondholders). Cluzo’s is probably more sensible tho because his doesn’t involve carpet-bombing credit markets like yours or mine.

  45. guest says:

    @35, There is a significant difference between making poor, but informed, decisions and not having a fucking clue what you are talking about. The former entitles the subject to be considered but questioned. The latter should be ignored. Guess which group Ms. Waters is in.

  46. Investorcluzo says:

    @novice – lehman wasn’t orderly…if you do all this in “receivership” and not bk, you don’t scare the daylights out of people. not to mention, the good bank/bad bank was played out in the late 80’s. seemed to work well back then. perhaps it’s time for chapter 2.

  47. blndebnker says:

    @44 – Oh I totally agree. That woman is a moron and shouldn’t even be allowed to speak in public. I am not defending her or any of the other shlubs in congress that feel that they have the magic solution. None of them have a clue as to how the industry works yet they all think they can do a better job. It’s laughable really.
    @45 – Yes I agree. A plan like that to slowly and methodically wind down the back would be ideal. But that won’t happen. Nobody wants to admit defeat. So instead, Citi will go in a tail spin and the gov’t will either bail it out, or it won’t.

  48. guest says:

    cluster****?

  49. guest says:

    “poor performance”, eh?
    tiresome, EP. the government is not nearly smart enough to make so vasty a ballocks of the global financial system as the lightly-regulated, richly compensated Masters of the Universe did over the last decade. that took real talent.

  50. guest says:

    JPMorgan cuts dividend 86% to defend its capital base…

  51. guest says:

    @21- Let me fix that for you.
    1) You are born into White Man’s Guilt
    2) No amount of giving will ever be enough for a professional victim; get use to it whitey.
    Would someone please Q the video clip of Maxine Waters berating Greenspan back in 2000 for denying the poor access to the god given American dream of home ownership. Greenspan kept responding with, “home ownership is up dramatically across all income levels and at no time in history has home ownership increased so dramatically.”
    Remember that Maxine? And so youz gotz what youz wanted, absurd lending programs, practices, and policies that allowed everyone to buy a 400K home.
    What is it now Maxine, people can’t service their debt. Blame that blue eyed devil whitey, he created supply and demand. He shifted the demand curve creating unrealistic home values forcing the poor into over valued homes and thus contributing to the poverty cycle.
    Maxine is the type of person who will never be satisfied. You could cook her dinner and suck her dick, it will never be enough.
    Repeat after me bitches, I’m white and I’m sorry.
    SPODE

  52. guest says:

    I may be touching on a historically unpopular idea…but…Citi would become a huge financial terrorism target no?

  53. guest says:

    Let it die so others can pick through its dried out bones buying what ever cheap assets they like. I feel sorry for the plebs who are loosing the value of their stock however the others who have been running the evil death star
    deserve to loose it all.
    GMMAs say we are going down boys. Hope you’ve been short.

  54. guest says:

    Maxine is the kind of woman that would sue Congress for discrimination after losing an election.

  55. guest says:

    @50
    Didn’t you get the memo? Ideology trumps pragmatism.
    But I’m still not convinced that Summers/Geithner are on board with the nationalization plan. It’s too rational and their buddies in WS are just so against it. (Though we must admit that their buddies are more concerned with their own pocketbooks than ideology.)

  56. Investorcluzo says:

    @51 – jaime d is coming out swinging:
    http://files.shareholder.com/downloads/ONE/517398308x0x274506/b77011df-e6e9-4fc5-a038-87e2209fc1a0/Capital%20Action%20and%201Q09%20Update_2.23.09_FINAL.pdf
    check out page 1 – tce/rwa of 6.5%, more than double that of bac and c. stock is up after hours (bac/wfc down, c flat). hey kenny boy and vik, who’s your daddy now?

  57. Novice says:

    @cluzo– sorry for the ambiguity. I meant to use Lehman as a counterexample where everything just went to hell. Agree with your assessment even if I’m murky on the 80’s details.
    @blnde– so what’s the best case scenario? Gov’t steps in just as Citi throws in the towel, to belatedly implement Le Plan Cluzo?
    (…of course, EP called such a question a strawman)

  58. blndebnker says:

    @54 – Forgive me for this because otherwise, you have a coherent statement… LOSE, LOSING

  59. Investorcluzo says:

    what gives with the fks from jpm, they call a last minute conf call then, show up 20 minutes late!
    aig asking for more cash! the sky is indeed falling…
    @58 – no worries. “le plan cluzo” – I like it, steve martin would be proud.

  60. guest says:

    AIG is the clusterfuck of the minute, apparently. What to do with that mess? Liquidate it and lets stop protecing Blankfein and his crew.

  61. guest says:

    @56; 50 here.
    it is so freaking clubby–Pandit + Summers vs. Lewis + Geithner in mixed doubles this weekend–but the larger problem is that they don’t understand just how nasty this situation is. should have chucked the econ/finance textbooks out the window a year ago but they can’t quite bring themselves to do it. trying to get us back to the nice, comfortable world of 1996 or thereabouts. which is no longer possible.

  62. guest says:

    @44 – So by your definition, Citi bosses were informed but stupid, and Ms. Waters is just ignorant. Well you can fix ignorance, but you can’t fix stupid.
    Ron “Tater” White

  63. guest says:

    Does Bobby Jones have a guarantee?

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