Friday, February 27, 2009

Citibank agrees to give US Government 40 % Stake

Citibank has made agreement with the US government at 40% percent stake. Ben Bernanke, Fed Chairman, is quoted as saying this is not nationalization of the bank. Nationalization is when the goverment seizes the bank and therein zeros out the shareholders. The US will hold a 40% interest in the bank as shareholder. These will be voting stocks and allows the government to hold more control in the operations of the bank. . . . . .I actually think this is a fantastic test model to see what happens. If the government exchanges preferred stock for common stock, they gain voting rights, but fall victim to loss of share price as the market creeps lower. The good news is stock prices are already low, hence the likelihood of making a heavy profit is increased. This is true when you figure we are doling out money to banks and have been taking no voting rights in the operations of these banks. I think this is a sound test and one which could prove to be very lucrative as the end of the recession comes. Once again, I am proud to say "I supported and support Prsident BH Obama." Find me also at .

No comments:

Post a Comment