After watching the news yesterday and seeing how Citigroup has been granted a bailout I can’t stop wondering what all this entails. I mean the bank received $25 billion just about a month ago. And on the 24th the Treasury announces another $20 billion in buying up preferred [Citigroup] stock?!
Perhaps I am missing the point here? But where is the logic behind all this? The bank gets $45 billion, yet they announce that 54,000 workers will be laid off? There are dozens of other important questions, we should be asking ourselves, two which I came across in an article on BusinessWeek.com: “… investors continue to be wary about whether Citi was worth saving from oblivion. Worse, some of them worry that if a bank with one of the highest capital ratios nearly went under, who’s next?”
Something else which nobody is addressing is: “Where will the line be drawn?” Will Hilton hotels be next? The Marriott chain? General Motors is practically guaranteed a bailout, who else?
Image by epicharmus under CreativeCommons
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