Robert Rubin's Citigroup: Too Big to Fail Too

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For those who want to know how "Bob" Rubin (Obama adviser) got the bank to be "too big to fail," read this NYtimes article "Citigroup Saw No Red Flags": http://www.nytimes.com/2008/11/23/business/23citi.html?ref=business

For those who just want to know how OUR money will be spent on these criminal vampires, portion below; whole thing here: http://www.nytimes.com/2008/11/24/business/24citibank.html?_r=1&hp&oref=slogin

The plan for Citigroup was still under discussion on Sunday afternoon, and it was unclear exactly how the arrangement might work. One question is how Citigroup and the government would determine the level of losses that the bank itself must bear before the government steps in. Another is whether any additional government money for Citigroup, which has already received $25 billion under the initial rescue plan, would come from the $700 billion industry bailout that Congress approved in October or from other sources, like the Federal Reserve or the Federal Deposit Insurance Corporation.

Regulators were debating various terms of the arrangement on Sunday, including whether the government would receive preferred stock or warrants, which are instruments that give holders the right to buy stock. Preferred stock would be more beneficial to taxpayers because Citigroup would pay dividends on those shares; warrants would be more attractive to Citigroup’s existing shareholders, since they would not immediately dilute the value of their investments as much as preferred stock.

Once the nation’s largest and mightiest financial company, Citigroup lost half its value in the stock market last week as the bank confronted a crisis of confidence. Although Citigroup executives maintain the bank is sound, investors worry that its finances are deteriorating. Citigroup has suffered staggering losses for a year now, and few analysts think the pain is over. Many investors worry that the bank needs additional capital.

With more than $2 trillion in assets and operations in more than 100 countries, Citigroup is so large and interconnected that its troubles could spill over into other institutions. Indeed, Citigroup is widely viewed, both in Washington and on Wall Street, as too big to be allowed to fail.

Even so, federal regulators want to restore confidence in the company without being seen as bailing out its shareholders.

Citigroup executives reached out to Federal Reserve and Treasury last week as they sought to stabilize the company’s stock, which has plunged 87 percent this year.