It seems to me that Citi has more problems on their own balance sheet.
They should save the funds the governement pumped in to clean up their business and resume lending rather than expanding their bank and increasing taxpayer risk.
The Treasury and the FED should re-visit the issue of bank mergers and consider whether it might be better to start breaking the banks and insurance companies up into smaller, more manageable entities. This while notion that a company is too big to fail isn’t good for taxpayers. We can’t continue to allow these companies to operate with reckless abandon and then when it falls apart, run to the taxpayers for a bailout.
Originally, the Treasury sold the bailout bill as a way to stimulate lending. All I’ve heard since the funds were made available is that banks are looking to use the money to acquire other banks. Why didn’t the Treasury insist the banks use the money for the intented purpose? Once again, the government demonstrates it can’t be relied upon to use taxpayer funds in a prudent manner.
AIG had to return for additonal taxpayer assistance because they still have huge problms. The continuing support is being provided because the gov’t believes AIG is too big too fail. The taxpayers will now have $150 billion invested or loaned AIG with no real sense it’s enough or, if and when they might ever receive a return of the funds.
This whole bailout is lunacy. The gov’t has to stop intervening in the markets and let the market dictate who will be survivors. Granted it will be very painful but, it is likely to be worse when we have dumped trillions of dollars into finding cures for the problem only to find many companies will fold.
I hate to be so pessimistic but, it seems like the drain on the taxpayers is never ending. More and more industries and companies are lining up for assistance. When does the taxpayer get to line up for assistance? The answer is never because, ultimately we have to foot the bill.
