While its always said we don't have money for social security, medicare, schools, infrastructure repair, health care, we have plenty for Citigroup (and others) it seems.
According to MSNBC, late Sunday, the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp announced the bailout jointly. The U.S. government will take a $20 billion stake in the company, as well as guaranteeing as much as $306 billion of risky loans and mortgage-backed securities.
Other sources said the deal was still being finalized.
But it seems like a rescue for Citigroup is inevitable, despite opposition by many. The stock has crashed even faster than the market as a whole, and a move such as this is seen as vital to stabilizing the company and bringing confidence back to investors.
The proposal could establish a sort of "bad bank," according to the Washington Post to hold the toxic sexurities. One could also see that this could be extended to other banks, or used as a template.
Posted November 24th, 2008 by Michael Santo
