BernieHund: The Political Watchdog

Chances are Citigroup and the Department of Treasury will be working into the wee hours, under cover of darkness and in the shadows, to save the the floundering bank. That’s speculation on my part, but the indicators seem to be there for another weekend retreat and resuscitation.

With the sharp stock-market decline for Citigroup rapidly becoming a full-blown crisis of confidence, the company’s executives on Friday entered into talks with federal officials about how to stabilize the struggling financial giant.

It all started Friday morning, and as we have learned, anything that starts on Friday in the banking bailout lasts most of the weekend. Stocks fell to $3.87 by the end of the day, and the calls had already begun. It was reported that Citigroup’s board called Hank Houdini, and then called Timothy Geithner, the current President of the Federal Reserve Bank of New York and the next Secretary of the Treasury.

Additionally, it seemed that the Federal Reserve was monitoring the withdrawals from Citigroup, hoping that the bloodletting would not extend until the corpse is completely drained. But, as we have heard time and again, Citi much like AIG is too big to fail. Oh, please. Let them fail. Divide up the assets among smaller banks who have shown themselves capable of legitimate fiduciary management.

Time is running out for Citigroup.

In a series of tense meetings and telephone calls, the executives and officials weighed several options, including whether to replace Citigroup’s chief executive, Vikram S. Pandit, or sell all or part of the company.

Other options discussed included a public endorsement from the government or a new financial lifeline, people involved in the talks said.

The course of action, however, remained uncertain on Friday night, these people said, and other options may yet emerge.

Should the Paulson Pals offer more money to Citigroup? Citigroup has already accepted $25 Billion of taxpayer dollars and as of last word are still planning to pay out those big bonuses. Not that anyone is asking, but enough is enough.

But with Citigroup’s troubles opening a new chapter in the long-running financial crisis, government officials said that the Treasury Department was considering whether to ask for the second half of the $700 billion rescue fund approved by Congress in September.

Well, doing more of what isn’t working won’t make it work any better. The Treasury has pissed away $25 Billion of our dollars with no concessions from Citigroup, not even a cutback on bonuses, although those in high places had no second thoughts on “laying off” over 53,000 employees.

And, hell no! No more money for Citigroup! Period. If Henry Houdini has done his magic trick with the first half of his bedfellow bailout, he doesn’t need another penny of our money to waste on a failing campaign. It is time to call, email and fax Congress. It is time to put a stop to the waste in Washington and on Wall Street.

“The reason you have to ‘save’ Citibank is you cannot allow this hysteria,” said Peter J. Solomon, chairman of the Peter J. Solomon Company, a small investment bank.

Excuse me, but the real hysteria will come if there is another tranche made to Citigroup. The American people are fed up with greed, mismanagement, and those CEO’s who don’t understand the 7P Rule: Proper Positive Planning Prevents Piss Poor Performance.

There was one rational voice.

“If there’s a flight from Citi’s stock, that’s unfortunate, but I don’t think that’s the government’s business,” said David M. Walker, the president of the Peter G. Peterson Foundation and a former United States comptroller general.

Mr. Walker said that the government should be concerned about Citigroup only if there were a run on the bank that threatened the financial system. The government should not, he said, be concerned about shareholders.

And, of course there are the myriads of thieves on Wall Street who say Citigroup can’t fail.

Some executives, however, argued that it was important to protect Citigroup’s shareholders because if they lose their investment, that will send other bank stocks diving.

We all understand that the financial system of our country is in crisis. We also understand that the Big 3 automakers are in crisis. So far, there has been a total of $25 Billion for the automakers. And, they must change management and strategy if they are to receive additional loans. We understand that. But, this free wheeling attitude of throwing good money on top of bad money to save the banks is not working, has not worked, will not work.

It is time to speak up and speak out. Contact your Representatives and Senators. And, yes, it is okay to say, “I told you so… and this time you better listen!”