That Wasn't Sugar

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All depositors are fully protected and there is expected to be no cost to the Deposit Insurance Fund. Wachovia did not fail; rather, it is to be acquired by Citigroup Inc. on an open bank basis with assistance from the FDIC.

[...]

The FDIC has entered into a loss sharing arrangement on a pre-identified pool of loans. Under the agreement, Citigroup Inc. will absorb up to $42 billion of losses on a $312 billion pool of loans. The FDIC will absorb losses beyond that. Citigroup has granted the FDIC $12 billion in preferred stock and warrants to compensate the FDIC for bearing this risk.

This wouldn't be the first time we've pointed out that financial Newspeak (the purge of all meaning from some phrases and words and the concentration of it in others) seems to be all the rage with the kids today. I realize that, conflicted though it looks, one could interpret "expected to be no cost" and "Citigroup Inc. will absorb up to $42 billion of losses...." as something other than mutually exclusive. That catch-all word "expected" makes the world your oyster as a public relations professional. For example:

Lehman Deal Expected This Weekend [Wall Street Journal]
Lehman Expected To Follow Merrill's Route [Reuters]
Sales Of Some Lehman Units Expected Soon [Reuters]
Lehman's Chairman, Dick Fuld, Is Expected To Attend The Gala Dinner [Unknown]

Even as I type this, the usual CNBC wonks are salivating over that tasty FDIC Chairwoman, Sheila C. Bair. Apparently, she get's "three thumbs up." I guess the insight that FDIC insurance premiums might have to be bumped up after weeks and weeks of massive losses qualifies one as a brilliant master of all things finance. (At least it does in Newspeak).
All Sheila needs is a slight improvement, elevating her to the "heckofajob" level and she'll be unceremoniously dismissed fired a week later.
Citigroup Inc. to Acquire Banking Operations of Wachovia [FDIC.gov]

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