Shut’em down, take’em over. But stop giving them cash

And we just got fooled again.

Today, we (and when I say we I mean the government, ergo taxpayers, ergo us) made another bonehead financial deal with the Bank-rupt CitiGroup.

We didn’t necessarily give them anymore cash but about $25 billion we’ve already spent, we are taking in common share stocks.

“As a condition, the government is demanding that the New York company overhaul its board of directors, the people said. Treasury will call for Citigroup’s board to be comprised of a majority of independent directors. Chief Executive Vikram Pandit is expected to keep his job under the agreement.”

This WSJ article claims the deal is dollar for dollar but that’s bunk. The value of the stock we own is about half the $25 billion.

And we are doing this, why?

It seems just to avoid having to use the word “nationalization.” It sounds a little too akin to socialization for political posterity. But, now even conservative economists are beginning to say there is no other solution.

One advantage to nationalization is finally figuring out just how “toxic” these assets are.  Another advantage would be getting rid of all the bums. We could then start with a fresh lineup, new coach and game plan.

Instead, the Obama administration appears to be, again, looking for a compromise.

The 36 percent ownership we have, as the WSJ article said, gives us some flex. There will be some changes. But as it also said, the Top Brass will remain.

Sometimes, I think compromise is just pointless. Sometimes playing the middle is both a waste of time and money. Sometimes there is only one answer.

We can’t continue to re-capitalize the banks because we are overlooking the full extent of their problems. They aren’t just cash poor. They have been thoroughly mismanaged. And they are, in fact, bankrupt.

CitiGroup has roughly $300 billion in troubled assets. It’s stock has lost 90 percent of its worth in the last year.

We can’t moderate our way out of this shit hole. Either shut it down or take it over. But stop throwing money at them.

Oh, I should mention that we (that’s us taxpayers again) could win if CitiGroup stock regains some of its value. But, no one really believes that’s gonna happen.

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