One Nation Under Citigroup

Normally I try to refrain from making a lot of political entries in this blog. Yes, many of the times where I point out things which are wrong with various industries could be considered political, but they are really meant to point out a problem and a solution. In this particular instance, I don’t have much of a solution, other than nationalization, and we’ve all seen just how well the government has run any enterprise it ever tried to operate.

Recently we had an election which had the overwhelming theme of “Change”. Now we seem to all be victims of the ancient Chinese curse “Be careful what you wish for.” Granted, the policies of the Clinton administration painted us into this corner. We had the Internet Ponzi scam which resulted in the DOT-BOMB flame out. We had the restraints taken off of the mortgage industry, which will ultimately be found responsible for the mortgage melt down. The short term high returns resulting from both of those policies caused other companies to try coming up with ways to manufacture such returns, or even better returns. Anybody disputing that statement obviously hasn’t watched the news stories about Bernie Madoff or Allen Standford.

Just prior to the election we had an administration desperately trying to put a Band-aid on the financial industry to avoid a complete collapse during the election. There was a justifiable fear that voters would be so busy trying to get their money out of the few remaining banks on election day they wouldn’t take time to vote. The old adage “ Haste Makes Waste” could have never been truer. In a blind panic they created TARP and stories of its abuse seem rather far reaching.

Now, the tax payer is being asked to bend over and take it again by Citigroup. They want us to convert the roughly $45 billion we sunk into prefered stock into a 40% stake of common stock. This is quite possibly the most blatant abuse we have seen yet. Were the prefered stock to be converted at current market value it would end up being 80% of the company, not 40%. As a country, we have only two options:

1. Liquidate Citigroup in its entirety.

2. Nationalize Citigroup and pull its banking business back to mortgage, savings, and retirement accounts.

Either way, we cannot allow even the tiniest shred of the existing management structure to remain in place. Everyone from the board of directors down to the most junior of Vice Presidents must be canned with only two weeks severance and their Cobra coverage.

We had an election for change, but it looks like the only change we got was changing the constitution from “one nation, under Halliburton” to “one nation under Citigroup”.