Wednesday, November 26, 2008

Bloomberg on how Citigroup's $306 billion rescue was concocted by regulators over a meal of Domino's pizza (not as bad as it sounds, seriously, seeing as it mirrors some of my own big deal efforts):

On Nov. 18, five days before he was forced to bail out Citigroup, Treasury Secretary Henry Paulson told Congress he was handing over to President-elect Barack Obama ``a significantly more stable banking system where the failure of a systemically relevant institution is no longer a pressing concern rattling the markets.''

The next day, Citigroup shares fell 23 percent to their lowest since May 1995. The bank said it would wind down seven failed off-balance-sheet funds. That ended attempts by Chief Executive Officer Vikram Pandit, who announced two days earlier he was eliminating 52,000 jobs, to salvage the investments after at least $2.2 billion of writedowns this year.

Then things got even worse.

Ouch. When it's put the way Bloomberg's put it, one's got to wonder exactly what Paulson was thinking, and how he felt when the Citigroup crisis of last week unfolded.

I definitely didn't see this coming. At $9, I would have said Citi stock was a good buy. In fact, quite a lot of people would have said the same thing!

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