Oops We Did it Again

I have got to say, 2008 has without a doubt been the low point for the United States of America, at least during my lifetime for sure. I don't mean to be hyperbolic here, I am really serious. This latest bailout of Citigroup has just gone so far above and beyond, it leaves me nearly speechless. The fact that time after time after time this year, a company, or an entire industry, lets its greed, its laziness, its cheapness, its stupidity, all of the above, you name it, drive itself into the ground, and every single time these days, all you hear chirped about on CNBC, on CNN, and even on the streetcorners and the Starbucks' of this country is "Bailout!", "Bailout!". I mean, how many of us even ever used the word "bailout" before this year? And now how many fucking times have we all used it, and thought it? It's so sick.

All I know is, the U.S. government has really outdone itself here with the Citi deal over the weekend. Citigroup has $306 billion of "risky assets" on its books. No, not 3.6 million, and not even 306 million. $306 billion of risky assets. This compared to the $30 billion on the books of Bear Stearns before it collapsed, and the $60 billion or so that Lehman Brothers had before it too collapsed unto itself. $306 billion of crappy assets. That shit does not happen by accident. You have to really try -- I mean, really, really go out of your way -- to be so reckless as to amass $306 billion of shitty assets on your books. There's just no way to get "stuck" with that kind of portfolio or to just "get unlucky" or something. No way no how.

So what does the our government decide to do this weekend, when the collective weight of that $306 billion of shit finally takes its toll on what was once America's largest financial institution? How do we decide to treat the company whose greed, whose stupidity, whose sheer recklessness outdid all other comers by a significant margin? Easy! We reward them!

Yep. We reward the most reckless company in America purely for being so reckless that they drove themselves into the ground and to within realistically probably one or two days of a bankruptcy filing. We fucking reward them. I mean, if they hadn't been nearly as reckless, only saddling their company significantly, with, say, $100 billion of bad assets instead of going that extra mile and reaching $306 billion, then their stock would not have been down 97% this year, the company wouldn't have quite been in danger of having to shut its doors for good, and the beloved Bush administration would not have had to give Citi anything. But instead, we injected another $20 billion of fresh cash into the company over the weekend, and more than that, our government has now officially backed (i.e., taken on the risk) of 90% of that incredibly shitty loan portfolio on Citi's books. Sure, we are requiring Citi to eat the first $29 billion of risk on their $306 billion, I imagine because that's the exact same amount of risk the Fed took on from Bear Stearns' book when they forced its firesale to JP Morgan Chase earlier this year, but of the remaining $277 billion, just about $250 billion of the risk is fully and completely owned by our government. So if Citi has to write down that $306 billion to, say, $200 billion in the coming quarters, the first $29 billion in writeoffs is taken on by Citi, and the remaining $77 billion will be shouldered $7 billion by Citi, and $70 billion will be eaten by the U.S. government. This is how we reward the biggest bunch of schmike yet in the entire financial crisis, the guys who acted the worst, who took on the stupidest, most vile bets and gambles. No, not the guys who acted the best, who behaved the most prudently with other people's money, the most responsibly. Nope. This kind of treatment we literally only save for the worst of the worst.

My lord, what must the guys at JP Morgan, or Wells Fargo, US Bancorp, Bank of New York and countless other more prudently-run financial instituations be thinking this week, huh? JPM and Wells, US Bancorp, these other giant financial institutions who aren't hurting nearly as bad as Citi, they must be as fuming mad as I am. I mean, how the phuck do we offer up this kind of a deal to as bad of actors as Citigroup management obviously has been over these past few years? Doesn't anyone care what kind of a lesson we send to these reckless piece of shit bankers, taking our money -- yours and mine -- and throwing it at them, taking all the worry out of their lives and all the risk out of their company solely because of what fucking pricks they have behaved like? I know I've written about this before -- maybe 14 or 15 bailouts ago at this point -- but does anyone involved in the current administration get it that this kind of reaction will only ensure that this exact kind of behavior happens again? Not just out of our nation's banks, but all across this country? It is possible that the people in charge here just don't get that?

I don't think so. I just think they don't care. As I've also written about here many times, W's administration is the first time, in my lifetime at least, when the whole notion of a recession or any kind of a downturn at all has become absolutely unacceptable. Never mind that we've had a recession every 10-15 years in this country for the past, oh, forever. And no mind to the fact -- the fact -- that recessions are as much a natural and necessary part of this and any free-market economy as the economic booms are. But Once W was in office though, I guess that all has had to change. And these jackmonkeys will stop at literally nothing (obviously) to help prop things up artifically in a vain attempt to dig us out of the hole our own financial and Congressional leaders put us in. So I think there is no way that all of these supposedly smart people in the current administration could fail to realize how completely and utterly ridiculous the effects of bailing out every bad actor, ever reckless fool, ever greedy pig banker, auto executive, insurance chairperson, retailer, you name it, will be on commerce and risktaking in this country over the long term. They do realize it. They just don't care. If it helps artificially get us to the end of the current recession sooner, then the ends justify the means I guess.

Btw, don't think I didn't notice what Hank Paulson did again with this Citi bailout. After he and Bushie got on tv and told us ten weeks ago that taking the bad assets off of our nation's banking giants' books was the only way to save the banks of this country, and that it was absolutely crucial to do so as soon as humanly possible to stave off a severe crisis (hah hah!), Paulson went a couple of weeks ago as I wrote here and announced publicly that he won't be buying up any banks' assets at all, opting instead to use the TARP money that Congress approved for him to buy bank assets for capital infusions into the banks instead. While I believe this to be the right answer, the way he went about getting to that point, the back and forth, the clear confusion and panic involved in his process, pissed me off, and more than that, sent the markets on a nearly 10% tailspin over two days as investors reacted to the flim-flamming, and the clear lack of knowledge about how to fix this growing problem. Well, guess what, guys? The Fed, FDIC and Treasury actions over this past weekend with Citigroup amount to nothing short of just a fancy way of taking the bad assets off of Citi's books. So after intending to do this for all the banks, and then announcing he would do it for none of those banks, now I guess the plan is just to do it for the very worst-behaving, most reckless and just generally the biggest assholes of all the financial institutions in this country.

What. The. Fuck.