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Wasn't the TARP supposed to provide a framework for dealing with all future bank failures? I just realized that the "bad bank" proposal for Citi sounds like the government is going back to ad hoc/one off solutions. "Bad bank" does not sound like part of the TARP.
It's a way of making all those debts disappear. Just like the money that was loaned, this bank is imaginary. It's a reset button.
So citi is asking for help when they need money. Hmm, when I had to chose between medical bills and paying a little on my citi card the closed it and sent me to collections. I hope they lose everything, blood suckers deserve it.
I have a lot of insurance with the Travelers, which I believe is part of Citigroup. Should I be shopping for other insurance?
Anybody know what effect the bank part collapsing would have on the insurance side?
Citigroup hasn't owned Travelers since 2002.
Also, I got an email from Citibank today:
Dear [my name],
Good news! Citibank is participating in the FDIC's Temporary Liquidity Guarantee Program. Through December 31, 2009, all of your non-interest and interest bearing checking deposit account balances are fully guaranteed by the FDIC for the entire amount in your account. *
And as a reminder, in October the FDIC increased the amount of insurance on eligible savings accounts -- such as savings, market rate, money market accounts, club and holiday accounts, and certificates of deposits -- from $100,000 to $250,000 through December 31, 2009.** To learn more about FDIC insurance, visit the agency's web site at www.fdic.gov or call a Citibank representative at 1-800-374-9700. You may also call the FDIC at 877-ASKFDIC (877-275-3342) or TDD 800-925-4618.
Looks like they get a bailout. The government is going to guarantee $300 billion in assets and fork over $30 billion in return they get some shares and restrict dividends and executive pay etc.
The collapse of Citigroup would've sent shock waves across the market. Not sure how long they'll last even with this bailout though. Perhaps this will give them time to sell assets and raise capital.
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