We are about to reap $12 Billion in profits from $45 Billion invested in CitiBank

[JohnWxy]

That's a 27% yield on our Bail-out equity infusion into CitiBank! How's that saying go? "Crying all the way to the bank."


http://finance.yahoo.com/news/Treasury-announces-Citigroup-apf-16334346.html?x=0

The government says it will sell 465.1 million warrants it holds from Citigroup Inc. in an auction on Tuesday. It is the latest effort to recoup costs from the $700 billion financial bailout.

Sale of the warrants gives the holder the right to buy Citigroup common stock at a fixed price.

The warrant sales will add to the $12 billion profit that Treasury says the government has realized from its $45 billion bailout of Citigroup. Treasury released that estimate in December when it completed the remaining sales of Citigroup common stock that the government held.
(more)

[enlightenment]

1. Okay - I'm definitely not a member of the investor class,

(or a maths person) because I'm having trouble making a $12 billion return on a $45 billion investment look like 'profit'.

I thought a profit when was what you make after recouping what you spend.

I'm stupid, I guess . . .

[rfranklin]

2. Yeah, and this doesn't recognize all the backdoor payments that were made...

I think the only reason that they made these bailouts public was to assure the world that something was actually being done in the face of financial calamity.

[cbdo2007]

3. They didn't "buy for $45 Billion" and are "selling for $12 Billion"

They bought for $45 Billion and are selling for $57 Billion for a profit of $12 Billion for a 27% profit.

The rest of us in the "Investment class" bought Citigroup at $1 and sold for $3 for a 200% profit. (I think)

[enlightenment]

7. Thank you - though I don't understand

why you put something I didn't write in quotes.

I'm happy you made a profit.

[JohnWxy]

4. $12 Billion is the NET return and it is the Profit. The gross receipts are: $57 Billion

$45 B + $12 B = $57 Billion.


Profit, by definition, is the net gain over and above your initial investment.

[enlightenment]

6. Thank you. nt

[jtuck004]

5. The investment banks are trillions of dollars ahead,

First, Citibank being a LARGE player that has devolved, (Stock was around $56 at one time, now $4.81), along with Goldman Sachs, J.P. Morgan Chase, Morgan Stanley, Credit Suisse, Bank of America / Merrill Lynch, Deutsche Bank walk away from the $450 to $700 trillion estimated worth of all the derivatives and credit default swaps (no one knows how much, and no public accounting is required by law). They disappeared $40 trillion in publicly reported dollars from the economy. We might have withstood that better if the heart hadn't been carved out of the jobs that pay enough to support the economy we like, but instead get around 30 million people underemployed and an economy in which the housing which is decreasing in value .

Then they recieved, as a group, trillions of dollars in loans from the government for less than 1%. The banks used that money to fund loans of 5, 12, 37%, 124%. That earned them more hundreds of billions of dollars. They also had trillions of dollars of mortgages with an unknown worth - still - and were traded treasuries for which they were paid interest. Again, in the hundreds of billions of dollars.

And we stand to make 12 billion. Yipee. Maybe we could put it toward food stamps for people who are not supported by Citigroup.

[Name removed]

9. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[girl gone mad]

8. No, not quite.

http://www.businessinsider.com/citigroup-gets-huge-new-38-billion-bailout-wiping-out-all-of-the-taxpayers-profits-2009-12">Citigroup Gets Huge New $38 Billion Bailout, Wiping Out All Of The Taxpayer's "Profits"

(That means we've lost 26 Billion on the deal.)

[westerebus]

10. Nice catch.

Change of ownership gets them a tax break. What's a $38 billion tax break among FWB?

[FBaggins]

11. So now profits are proof of morality?

We kept a company in business that should have been allowed to die... by taking an ownership interest and then using the power of government to make the investment profitible.

What would have happened if we hadn't? C would have died... while competitors that didn't make stupid decisions would have benefited from picking up their business. Their stocks would be higher (and thus, people who invested in well-run companies would profit from that correct decision).

So we're really profiting for saving a company that screwed up our economy... at the expense of the people who invested in the companies that didn't.

Forgive me for not cheering.

[girl gone mad]

14. Worse, even if these "profits" weren't total fiction (see above)..

a similar investment in the S&P or Dow would have way outperformed this return.

If the goal was to get a big return, we could have done better buying into any one of thousands of publicly traded companies, and we wouldn't have had to give any of them backdoor bailouts so they could fake their way to profitability.

[dd2003]

12. when do I get mine?

haha..I wish

[westerebus]

13. The check is in the mail.

LOL. Welcome to DU.