FDIC's $500B credit line -- enough to liquidate Citi?

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machinehead's picture
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FDIC's $500B credit line -- enough to liquidate Citi?

The day after Citi became a penny stock -- valuing the goobernment's
36 percent common stake at slightly over $2 billion, after it invested
$55 billion in equity and $300 billion in loan guarantees -- suddenly
Senator Dodd is rushing through a bill to give FDIC $500 billion in
borrowing authority, up from $30 billion. From WSJ --

WASHINGTON -- Senate Banking Committee Chairman Christopher Dodd is
moving to allow the Federal Deposit Insurance Corp. to temporarily
borrow as much as $500 billion from the Treasury Department. The Connecticut Democrat's effort -- which comes in response to
urging from FDIC Chairman Sheila Bair, Federal Reserve Chairman Ben
Bernanke and Treasury Secretary Timothy Geithner -- would give the FDIC
access to more money to rebuild its fund that insures consumers'
deposits, which have been hard hit by a string of bank failures.

Do you think this is a mere coincidence of timing? 'Coincidence theorists' do. Laughing

My question is whether $500 billion is enough to liquidate Citi's
black hole, reportedly the largest one in this sector of the galaxy.
Let's stop nickel-and-diming, Senator. Just hand Sheila Bair $5
trillion and tell her, ''See ya next year; let's do lunch some
time.'  Why be stingy with paper money, when we can print as much
we want?

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