Brits call out the PPT? I'm gobsmacked!

By Greg Farrell, Henny Sender and Nicole Bullock in New Yorkand Dave Shellock in London
Last updated: November 25 2008 01:42
Financial Times

Analysts said the federal action reflected concerns Citi was “too big to fail” – as Vikram Pandit, Citigroup chief executive, suggested when he told employees “this was about the US financial system and the banking system”.
Under the plan, the Treasury will buy $20bn in preferred shares in Citi, which will pay the government annual dividends of 8 per cent. The new shares are in addition to the $25bn in preferred shares already owned by the government. The deal also includes guarantees for $306bn in domestic assets, including residential and commercial mortgages, leveraged loans and auction-rate securities. Citi’s credit card business is not covered.
Citi, which has dedicated about $8bn in reserves to cover assets in the portfolio, agreed to shoulder an additional $29bn in losses on its own. The government will take 90 per cent of any losses on the remaining $269bn in assets, with Citi absorbing 10 per cent.
Regulators considered more aggressive action, even discussing plans to buy common shares of Citi in the open market to “squeeze” short sellers, who bet on the company’s decline, participants in the talks say. The proposal – which recalls strategies employed by central bankers in the past – was rejected.