Told ‘ya so.
Citigroup sold 5.4 billion shares at $3.15 apiece, less than the $3.25 the government paid when it acquired a one-third stake in the New York-based bank in September. The bank said Treasury won’t sell any of its shares for at least 90 days.
And, I might add, a solid 10% or so below the closing price, and worse, way down from the somewhat-over $5 price just a few weeks ago.
Like 40% down.
Gee, you think this might have something to do with the equity and tarp exit right now nonsense?
Now here’s the truly-bad news.
All of the big TARPed banks, and all the other banks, better hope they have enough capital, because they are not going to come back to the public markets for more.
Dick Bove was absolutely ballistic last evening on Fast Money, bloviating about lawsuits and such. Good. It’s about damn time that people got pissed off at the outright looting of not only the taxpayers but the shareholders that these institutions have engaged in.
Let me be clear on my opinion:
I DO NOT BELIEVE THE BANKS HAVE ANYWHERE NEAR ENOUGH CAPITAL GIVEN THE HIDDEN LOSSES THEY ARE CARRYING ON AND OFF THEIR BALANCE SHEETS THROUGH THE LEGALIZED ACCOUNTING FRAUD THAT FASB HAS PERMITTED SINCE MARCH OF THIS YEAR.
THIS BOGUS ACCOUNTING WILL DETONATE IN THESE BANKS FACES WHEN THE CASH FLOW BECOMES INSUFFICIENT TO MAINTAIN THE CHARADE, AT WHICH POINT THE PRESSURE VESSEL WILL CRACK AND THE BANK WILL LOOK LIKE THIS:
Congress is not going to allow a second bailout.
The equity markets will not buy the stock for a second bailout.
THERE IS NOWHERE TO GO FOR ANOTHER BAILOUT.
Better let that one sink in, folks, and then hope that I’m wrong about capital adequacy, because if I’m not, the fuse on this sucker has been lit, it’s both waterproof and impossible to cut, and I have no idea what the time delay is on it.