U.S. Treasury says it will begin selling Citi shares at a profit

Sounds just like socialism to me, if I was an uneducated yahoo.

NEW YORK —The Treasury Department said Monday it will begin selling the stake it owns in Citigroup Inc., which could result in a profit of more than $8 billion.

The government received 7.7 billion shares of Citigroup in exchange for $25 billion it gave the bank during the 2008 credit crisis. It said it will sell the shares over the course of this year, depending on market conditions.

Like any investor, the government will likely hold on to its shares if prices fall steeply. However, Citi shares have steadily been rising with the broader market in recent months, which means the Treasury Department stands to pocket a hefty profit.

Citi shares rose 8 cents to $4.39 in early trading Monday. The government would make about $8.8 billion in profit on its stake in Citigroup if it sells the stock for $4.39 a share.

BREAKING: Citigroup gains massive tax break in deal with IRS

By GottaLaff

Just got an alert from WaPo:

The IRS has issued an exception to tax rules for the benefit of companies including Citigroup. As a result, Citigroup will be allowed to retain $38 billion in tax breaks that otherwise would decline in value when the government sells its stake to private investors.

Here are excerpts from the article:

The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis.[...]

While the Obama administration has said taxpayers likely will profit from the sale of the Citigroup shares, accounting experts said the lost tax revenue could easily outstrip those profits.

FOX (yes, Fox) Bags Trove Of Secret TARP Emails

By GottaLaff

This is getting good. Too bad it was Faux News that got the scoop. Via TPM:

...Fox Business News has obtained a much-redacted 10,096 pages of Treasury Department documents on the bank bailout. Scrubbed of "proprietary" information and what would presumably be their most explosive revelations, the communiques exchanged between the Bush Administration and executives at Citigroup and AIG read something like "Dumb and Dumber and I Know It Seems Impossible But Even Dumber Than That." The first role would be played by the TARP overseer and cheerleader for the Italian automobile industry Neel Kashkari, whose aides nervously emailed one another as they watched him testify before the House Financial Services Committee on what exactly he was doing with their money.

Nason: How's it going?

Zuccarelli: Bad. Serious questions, too, not "chump" type questions. They're going to start to break Neel down soon, I'm getting worried he's going to start snapping.

Nason: This AIG stuff is tough to watch.

Zuccarelli: They killed him on exec comp. He didn't know answer. [...]

But maybe because their $45 billion bailout was so puny compared to AIG's, Citigroup seemed most oblivious of all:

Though the details of what specifically held up an agreement with Citigroup at the end of last year are muddy, it's clear from the documents it dealt with compensation. What's also clear is that government officials were amazed that, even at the eleventh hour, Citi officials still didn't seem to understand that they would have to make concessions.

"Unbelievable," wrote Stephen Albrecht, the counselor to the general counsel at Treasury, summing up the situation.

There is more here. I felt too guilty to steal the entire post.

Citigroup May Spend $10 Million for Executive Suite

Anyone else think these guys just have no clue when it comes to PR and optics? You'd hope they'd at least pay some PR firm to think for them...

March 19 (Bloomberg) -- Citigroup Inc. plans to spend about $10 million on new offices for Chief Executive Officer Vikram Pandit and his lieutenants, after the U.S. government injected $45 billion of cash into the bank.

Affidavits filed with New York’s Department of Buildings show Citigroup expects to pay at least $3.2 million for basic construction such as wall removal, plumbing and fire safety. By the time architect’s fees and expenses such as furniture are added, the tally for the offices at the bank’s Park Avenue headquarters will be at least three times as high, according to a person familiar with the project who declined to be identified because he’s not authorized to comment. Citigroup said the project will help it save money over time.

Obama to Citigroup: Get Rid of that Jet

By GottaLaff

The Anti-Bush:

That was fast: The Obama administration told Citigroup to get rid of its $50 million jet, just one day after reports about the expenditure made their way into the public eye, ABC News reports.

From ABC:

The high-flying execs at Citigroup caved under pressure from President Obama and decided today to abandon plans for a luxurious new $50 million corporate jet from France.

The bank used TARP funds to purchase a new corporate jet for executives.

The decision came 24 hours after the banking giant, which was rescued by a $45 billion taxpayer lifeline, defended buying the state-of-the-art Dassault Falcon 7X — one of nine to be flying in U.S. skies — as a smart business deal.

The jet, the epitome of corporate prestige and privilege, can carry 12 passengers in elegant comfort.

ABC News has learned that on Monday officials of the Obama administration called Citigroup about the company’s new $50 million corporate jet and told execs to “fix it.”

Fixed.

Bailed-out financial firms using offshore tax havens

By GottaLaff

Teeth-gnashing time:

Washington Post: a GAO report shows that bailed-out financial firms are using offshore tax havens to avoid paying U.S. taxes. The all-take-no-give companies include some of the biggest bailout recipients -- A.I.G., Citigroup, Bank of America & Morgan Stanley.

However:

It is all legal, but it could come to an end, given the dire condition of the U.S. economy and President-elect Barack Obama's campaign pledge to close this popular business tax loophole. The Treasury estimates that it loses $100 billion a year in tax revenue as a result of companies shipping their income off shore, and congressional leaders are vowing to introduce legislation forcing big companies to pay full freight.

Thank you, BushCo and Friends. One more example of how you've helped drive this country into the ground.

Question

If I now own 8% of Citigroup as Erin Burnett just said on MSNBC, can I give myself a better mortgage deal?

Wachovia's next

By GottaLaff

Wachovia is in talks with Wells Fargo and Citigroup, among others.