Tuesday, February 3, 2009

Smokescreen and the Bandit

(What a load of rot this is. Bandit congratulating himself as being a good citizen because he will lend out less than what was given to him in TARP funds? Golly where does one start. How about Trader Hank proclaiming that bailing out the banksters for rich folks' bad speculative bets was the best way to go because the multiplier effect would be the most effective use of the taxpayers' money? Although stated in the article in a 'bury the lead' fashion, more emphasis that this is less than 50% of what was lent last quarter might have been appropriate. Oh and don't forget that they might be including companies that are drawing on existing credit lines as 'new loans'. Lastly, this pablum wouldn't have anything to do with the fact that Bankster Bandit is going to be testifying next week, would it? Bubblevision should be embarrassed that they are reporting this pablum as news. - AM)

By Josh Fineman
Feb. 3 (Bloomberg)

Citigroup Inc. plans to use $36.5 billion to lend to consumers and companies and to fund U.S. mortgage loans after receiving $45 billion as part of the government’s bailout of the banking industry last year.

The New York-based bank will use $25.7 billion for mortgages, $2.5 billion for consumer loans, $1 billion for student loans, $5.8 billion for credit card lending and $1.5 billion for corporate loans, according to a report to be issued today by Citigroup. A copy was obtained by Bloomberg News.

Barney Frank, chairman of the House Financial Services Committee, has faulted banks for failing to boost lending after getting capital from the U.S. Troubled Asset Relief Program. He said yesterday that President Barack Obama will require banks to make more loans in return for aid. The Wall Street Journal reported today that Citigroup is now considering dropping a plan to spend about $400 million on marketing with the New York Mets baseball team. Some lawmakers say the deal is wasteful.

“The government, on behalf of the American taxpayer, has invested in Citigroup,” Chief Executive Officer Vikram Pandit said in the report. “We have an obligation to repay in ways that go well beyond the $3.41 billion Citigroup will pay the government each year in dividends associated with its TARP investment, and a separate loss-sharing agreement.”

The $36.5 billion in new funds allocated for lending comes on top of the $75 billion that Citigroup doled out in new loans in the fourth quarter to people and businesses.

Citigroup said in the report that TARP capital will not be used for compensation and bonuses, dividend payments, lobbying or government-related actions or any activities related to marketing, advertising and corporate sponsorship. (Money is fungible ... again more nonsense. - AM)

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