The Argument For Saving Citibank Managment
Geithner's decision not to nationalize some subset of banks looks like the right move in retrospect. Citigroup and BofA are still struggling, of course, and it's hard to know when they'll recover (though much of that seems tied to the unemployment rate). But the rest of the country's biggest banks are chugging along reasonably well. The stress tests restored confidence and allowed them to raise capital privately rather than rely on the government.
Say what? So the fact that the government owns 42% of Citibank, has been the only source of equity capital for Citibank, that Citibank is struggling and "it is hard to know when they'll recover" is the evidence that not putting Citibank into receivership was the "right move?" Hell, I would love to see Scheiber's case for ever nationalizing Citibank. We can argue about a lot of things, but arguing that Geithner's handling of Citibank is evidence of what he's doing right is shocking to me. The federal government dumped hundreds of BILLIONS of dollars into Citibank and has got nothing to show for it (Citibank's new loan originations are anemic.) The only people who have benefitted from Geithner's actions on Citibank are Citi CEO Vikram Pandit and his band of merry Citi bankers. Hell, Geithner would have been better off throwing money onto the street as economic stimulus. As a defense for Geithner, Scheiber has convinced me that Geithenr should go.
Speaking for me only
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