The current market capitalization for Citibank is running about 11-12 billion dollars. That is what the whole company is worth if the stockholders are lucky. We have already put 45 billion dollars into Citibank, and promised to assist in dealing with some 300 billion in possibly bad loans.

I figure that we have already spent enough to buy Citibank around four times over, without considering the liability for the bad loans. Now Citibank wants even more without any significant conditions or payback in sight. I can’t even call this sending good money after bad. It is flat out insane.

Bisbonian,

Your experience is proof of the downside of too much bank “product” and too little hands on oversight. May not offer any comfort, but what’s happened to you has happened to many!
Citigroups self description of services as “product” gives a clear indication of what’s happened in the banking industry in general.

Their “financial supermarket” approach to banking, insurance, investment, credit, finance and all related financial entities is probably the biggest single cause of their eventual demise. With every acquisition over the years, the level of obligation has increased exponentially with the level of profit potential. And the level of hands on control of each and every transaction, particularly in the real estate market has been eliminated and lost.

The “financial supermarket” approach coupled with bad investment speculation, and/or profit loss behavior, that led to various banking and insurance entities falling in value enough to make it possible for them to be acquired by, or merge into citigroups growing “market”, guaranteed an increase in risk. Risk came, followed by more reckless speculation, followed by more acquisition, and merge. All related arms of the growing monster we now call Citigroup.

Walking backwards there are plenty of CEO’s, managers and officers to blame. If nothing more, following a thorough investigation, they should all lose their licenses. Possibly have some of their assets attached as collateral against the huge losses they’ve created for their investors. That costs legal time and money, and we need action now, not after we have punished all the bad guys. But we need to make sure there’s room made on the Justice Departments already overflowing plate to see that happens.
There’s a lot of talk demanding we nationalize the failing banks. In truth, this actually happens all the time in the USA. Every bank failure is a case of bank nationalization. The FDIC steps in, takes control, and sells the bank to another bank over the weekend. So far in 2009 it’s happened 14 times!

I think the thing holding up nationalization of Citigroup is the shear size and volume! Most failed banks are cleaned up and sold over the weekend. However, a large scale takeover would require more time. The government would ‘own’ the bank until it could sell off assets. Citigroup is not to big to fail, we sure know that by now. In fact, Citigroup is to big to NOT fail. So the question is do we want the burden [and cost] of managing and selling off it’s assets?

Shall we keep propping up these giants until they’re dead, or do we start chopping them up now, hoping the various pieces might survive?

At this point I have to say, I’m sure glad it’s Obama wrestling with this quandary and not me, because I don’t know what’s the best thing to do. The only thing I know for sure is doing nothing usually results in getting nothing done.

Which brings us back to how did this happen? Try the Gramm-Leach-Bliley Act of 1999 on for size!

There will be no recovery until Obama quits stalling on nationalizing the insolvent banks.

Citigroup, no more help for these losers, let zombie banks die.

Want banking reform? 1. Obtain rope. 2. Obtain several bankers. 3. Hang bankers. 4. Post video on Youtube. 5. Observe and monitor banking reform. 6. Repeat as necessary.

Put the bank into receivership under the FDIC, wipe out shareholders, fire all executives.

Not one dollar more; these are the same banking CEO’s and investment brokers who made the decisions that brought us to this economic mess. It is time that the opportunistic blackmailers be held accountable for their crimes of greed. Citi Group is the kind of corporation that brought us to the edge of a depression that could start something that none of us want to imagine. The past behavior of this companies officers was and is self serving to the point of being totally unethical and their only regret is that it is now commmon knowledge of the people of the world.  How can anyone believe these same companies and their officers, seek the best interests of our country or the world as the highest goal?  There is little discussion of what is going to happen when the credit card divisions of the banks start to fold as they are bound to do. Again, they believe the general public to be idiots and respond to the “dried up old carrot” they have been using to stimulate suckers in the past. The idea that the ordinary person should spend their incomes and savings to save a phoney economy that did little to make the ordinary citizen secure is beyond arrogant. There is no doubt that we will all suffer the consequences of this recession but again opportunist, entrepanuerial bankers and brokers will try to make a case that the recession is the fault of the poor and middle class and believe “business as usual” should be their right.