Cutting Through The Crap

Saturday, March 27, 2010

Profit Prophets


And speaking of things the RWS™ have been saying that are untrue (it would be much easier to count their truths, if there were any), let's revisit the socialism of taking over the banks. Ignoring the fact that they were never really "taken over," and that it was always clear that the efforts were temporary, the RWS™ and those who love them have considered this (along with auto makers) the signal truth of their claim. So I'm waiting for their response to this news:

Among the banks that rule Wall Street, Citigroup got a bailout that was bigger than the rest. Now the company is about to pay a king's ransom for its federal rescue.

The Obama administration is making final preparations to sell its stake in the New York bank, according to industry and federal sources. At today's prices, the sale would net more than $8 billion, by far the largest profit returned from any firm that accepted bailout funds, and the transaction would be the second-largest stock sale in history. [emphasis mine, you betcha]

[...]

The windfall expected from the stock sale would amount to a validation of the rescue plan adopted by government officials during the height of the financial panic, when the banking system neared the brink of collapse. A year ago, Citigroup's stock hovered around a dollar a share, and the bank's future seemed in doubt. On Friday, the stock closed at $4.31.

If the sale proceeds as planned, Citigroup would be able to cut nearly all of its ties to the $700 billion Troubled Assets Relief Program. Meanwhile, the administration could highlight the profit generated from the rescue of big banks.

"It's unprecedented to do [a stock sale] of this size right after the financial industry has been so battered," said an industry official who spoke on the condition of anonymity because he was not authorized to comment publicly. "It's just a very bullish sign."



Really, it's amazing to me how the right wing has managed to convince so many people of things that are so obviously false. Like death panels. Like ignoring the fact that mandates were a Republican idea. Like it's a "government takeover," or whatever else it is that sent people to their beds when they heard the health care bill passed.

From the beginning it was obvious that the bank and auto-maker rescues, whether they were a good idea or not, were NOTHING like socialism. It was obvious that the plans were temporary. In fact, the idea of the government making money on the deal was floated from the start.

And ignored by the wingnuts, as they stoked themselves into white (most literally) rage.


8 comments:

AlisonH said...

As long as Citi and the like get the real regulation they so thoroughly proved they so very much need, it's all good. Pay us back in the process? Sweet!

Frank Drackman said...

Am I imagining that 10%"Tanning Tax"???
How the Eff is that not a Civil Rights violation??? Where's the Watermelon Surcharge,Malt Liquor 2-Carbon Tax, Afro-Sheen Environmental Impact Fee???
Who wrote that section? Reverend Wright???
Revolutions have started over less...

Frank

Sid Schwab said...

Here, Frankie. They better tax it before everyone dies.

Frank Drackman said...

Typical Commie Proposal...
Umm y'see Sid, we have this OTHER way to tan in the South...
Its called "Mr. SUN"
Try taxin that.
and all its gonna do is put Tanning Salons out of business, which means you'll be able to buy a nice 50,000 Watt Turbo Bed dirt cheap.
Which will lead to BACK ALLEY TANNING!!!!!!! Oh, the Humanity...
And I know there's like 5 Black People in your whole State, but that stuff Michell Obama uses to straighten her Hair??? Makes Dioxin look like Aquafina...

Spiny Norman said...

A lack of self-awareness is the hallmark of the modern right. Drackman's subconscious is riffing on this.

Anonymous said...

I must admit, I'm surprised (in a good way) that the government is selling it's shares in Citigroup. I'm not in the least surprised that they made a profit on the deal.

This makes me wonder: If a company is "too big to fail", should they have broken it up using antitrust laws to prevent this from happening again? If so, why didn't they?

And another thought: Since the US will be "on the hook" to bail out these big companies if they "screw up" again, maybe it's time the government invest as minority shareholder in some profitable businesses and use the dividends to fund our new social programs/healthcare. Just a thought since our population is getting more "top heavy" and it will be difficult to adequately fund social programs off the labors of a smaller productive class.

If the government is telling us what insurance to buy and propping up companies that should have failed, they may as well get a piece of the action.

The concentration of power is unsettling (even though it appears the government acted rightly in this instance), but I didn't make the new rules, I'm just trying to play by them.

Opinion, Dr. Sid?

Regards,
PrecordialThump

Sid Schwab said...

It's beyond my ken, PT. Economics not a strong suit. There was, though, much debate about how to handle the banks. There were many liberal economists arguing for taking them over more completely; what was done was, despite the cries of socialism and government takeover and Nazis and whatever the hell broke through Beck's meds on a given day, pretty middle road.

Nor, evidently, are the current regulations being proposed, strong enough in the view of the lefty economists. Sweden took over its banks at one point, and sold them later for a profit. I don't know if "we" own shares in GM or not, when we "took it over." If so, I'd assume there'd be another big payday when sold.

To me, the bank action and the stimulus were all reflective of Obama's moderation, as opposed to the claims of the RWS™. Very much a middle road, with, in my opinion, too much given away in tax cuts and not enough direct spending on infrastructure. It's working, but too slowly. Would have been faster with less tax cut and more spending, I'd say.

As to investing in other companies, I have no idea, no opinion, no knowledge. My blogging notwithstanding, I try to keep my opinions to areas about which I think I know something. Politics, medicine, and the destructive nature of Fox and the RWS™.

Montag said...

It's easy to get right-wingers to believe almost anything horrible, because they already want to believe it. End-of-Times, Armageddon, you name it, their inherent arrogant sense of superiority to just about anything and anyone tends to lead them into a premature death wish for the world...just so it won't be so imperfect anymore.