Bitcoin Forum

Well Citigroup has to pay
4 billion civil
500 mill states
2.5 billion consumer relief

So 7 Billion they got away with it in the sense they needed to pay a speeding ticket for the financial crisis.
http://www.thestar.com/business/2014/07/14/citigroup_to_pay_7_billion_in_subprime_mortgages_probe.html

In the deal announced Monday, Citigroup will make a $4 billion civil monetary payment to the Justice Department, and another $500 million in compensatory payments to state attourneys general and the Federal Deposit Insurance Corporation.

The bank will provide $2.5 billion in consumer relief, which will include financing for construction and preservation of affordable housing, as well as principal reduction and forbearance for residential loans.

CEO Michael Corbat said the settlement ends all pending civil investigations related to its handling of mortgage-backed securities.

No one goes to jail though on this one, so point to the banks.

The only thing that matters here is that none of the banksters are going to prison for extended amounts of time, let alone any time at all. Are any of these guys going to be forgoing salaries and compensation for the next 6 years to make up for it or any multi-million dollar fines being levied against everyone in management each? The answer to all is Nope.

This is the completely wrong approach. Rather than putting up all kind of regulation that nobody without a multi million dollar legal department can possibly follow (and when you do have that kind of legal department, you might not end up following it anyway because you may as well put that department to work!) simply allow the free market to do its job. Allow the bank to go belly-up then treat depositors as senior creditors of the bank, above even bond holders. With a 10% reserve ratio, thats effectively a "minimum 10% down payment" made by the bank. Let the depositors take all the assets of the defaulted bank, and most if not all losses should be covered by that 10% down payment, although it might take a while for it to become liquid. Best part? Stock holders experience a large, if not complete, loss, so the free market will naturally weed out excessively risky practices.

Citigroup has to give back a tiny fraction of the billions they received in government welfare.

Hahhahha.  Stupid slaves think their government is punishing the bad guys.

Yep just how our financial system is built if you have the money you stole from someone else you can use it to get away Scot free on things
If the company underperformed no worries you still get your options and bonus good times here have even more.
Basically no responsibility for their failures if things go down the drain you can get hired somewhere else its a revolving door after all.

That is how public company and public sector work.

If you want to know who government works for just look at the 2008-2009 bail outs. They went to the banks. The plebes lost their houses while the banks speculated on (and drove up) food prices with the bailout money.   

I would disagree that these are failures. The government has fined and charged Citi over these same issues multiple times. The government has fined Chase for loosing money and making bad investments. The gov uses banks as a slush fund to pay for it's political projects as part of their settlement can pay for things like "borrower assistance" even though borrowers were not harmed from the alleged "mishaps"

Nope, the cost will be passed on to those who take out mortgages, student loans etc through them.  It just business as usual for the banks!

Sounds about right enough discussion has been occurring that says the next major financial bubble is in the Student Loan market and I would consider that to be a true statement only so much inflation can occur to the cost of education before reality sets in.

A lot of the costs will be passed on to the owners of the loans that own loans that Citi services. Citi was accused of selling loans to investors that were poor quality and as a punishment Citi needs to provide relief to the borrowers who had poor quality loans.

The regulators are really just trying to advance their political agenda by getting Citi to pay for what they can't get passed in Congress.

Wait so apparently now its illegal to lend to people without a high credit rating? Lol.

Well to the extent that they can take out giant loans on their houses without any money to back it up :)
There are still payday loans for the people with low credit ratings, not so much microfinance here though.

subprime mortgage lending means.. people with bad credit, which is not the same as "people with high credit rating." it's a big reason why everything crashed in 2008.. because these big banks exploited people (who are also to blame) by giving them bad loans.

So? I lend to "low credit rating" people on here, what some people might consider stupid. If banks want to do it too, then let them, just don't fucking bail them out if/when it fails.

Yep no bailouts, with banks they don't really care because the money is on the computer and what not called a fractional reserve where the bank can just multiply that money into a new loan and investment and increase their balance sheets all at once.

Why they like taking a lot of loans from people and a motivation to the subprime market crisis.
The ones who lose out are the people who take that loan and lose their possessions when the credit comes in to kick them in the shins.
 (or they take an arrow to the knee XD)

they lose, and the banks that make those loans are partially at fault for being predators.. but those people are also at fault for not knowing how to invest/spend their money properly. i side with the people who took out bad loans though, since there is no government to bail them out.

True but in this case we could go in a full circle and blame the education system for not teaching people the necessities of finance in school but abstract mathematical concepts instead. (with exception to computing ^_^)

That said no one wins when someone defaults the banks lose money and are predators that get to target yet another person, and it certainly is not fun being the defaultor losing your house and having to start from nothing again, but your right the defaultors don't have anyone to bail them out when the banks come and take their property and possessions, unlike the banks who are just looking for the next big payday.

i think it's a win/win for people who run the banks, really. if the loans don't fault, good.. you can get high interest rates from subprime mortgages. if everything crashes, that hurts.. but no worries, the government will step in and help out.

Actually you might have a point I did post that they only had to pay 7 billion for the Subprime mortgage Crisis
Forgot to check how much citigroup got in a bailout for comparison

But its actually win win win
If people default they get all the stuff they have and its on fractional reserve anyway so it has more value in tangible assets than it does on a computer.

http://www.reuters.com/article/2008/11/24/us-citigroup-idUSTRE4AJ45G20081124

Back in the time machine

(Reuters) - The U.S. rescued Citigroup Inc, agreeing to shoulder most losses on about $306 billion of the bank's risky assets, and inject new capital, bolstering investor hopes that the government will support big banks as the economy sinks into recession.

In exchange here is 7 billion back
Government its cool now you paid your debt to the USA

----
In return, Treasury and the FDIC will get $27 billion in preferred shares, of which $7 billion are a fee that Citigroup pays in exchange for the government guarantee.

(Not sure if they sold the shares though but if not 500% over their buy in price)
http://www.marketwatch.com/investing/Stock/C?countrycode=US

man, 306 billion dollars.. 7 billion pales in comparison. that's basically interest money for 1 year. the way the real works is that it's socialism for the corporations, and capitalism for the people who are not corporations.

Yep socialism for the corporations who pay it back in their political campaign war chest and jobs after the leave government (Good old cronyism)
And capitalism for the poor.
Under the argument of contagion of course because after all they are too big to fail.

I found the thing I was looking for so to add a guilty bonus to that 7 billion
The government said in 2010 that its cool we will leave now and let you go and make the same mistakes again since we don't want to be seen holding bank shares in the financial system in exchange let us print more money guys  ;)

Government sells remaining shares in Citigroup; investment to net $12 billion total profit for taxpayers

http://www.washingtonpost.com/wp-dyn/content/article/2010/12/07/AR2010120700091.html
When it disposes of its remaining Citigroup shares, the Treasury said, the average selling price for its shares will be $4.14 apiece, up from $3.25 when the government obtained its stake. Citigroup's stock closed at $4.45 on Monday.

http://online.wsj.com/news/articles/SB10001424052748704156304576003884177348202
The Treasury's sale of 2.4 billion Citigroup shares was priced at a 10-cent discount to Monday's closing price of $4.45 a share. With the government's average cost at $3.25 a share, Treasury officials decided to accelerate the sale timetable after recent gains in the stock price meant the cost had already been recouped in sale proceeds, repayments and dividends, one of the people familiar with the matter said.

"With all the risk already off the table," the person said, "there was no reason not to go ahead with this." Counting Monday's sale, Treasury's sales proceeds averaged $4.14 per share.

(Note there was a 1:10 Stock Split in 2011)
https://ca.finance.yahoo.com/q/hp?s=C&a=00&b=3&c=1977&d=06&e=19&f=2014&g=m

So its more like 41.40 per share

So 19 billion for a 306 billion dollar debt :)