Sunday, November 23, 2008

CitiGrab Goes for Taxpayer's Wallet Again

A capital injection of $25 billion wasn't enough. The promise to jettison 52,000 jobs didn't assuage the market. CitiGroup's stock is in free fall. The diversified financial firm needs $50 billion more.

While Congress turns a blind ear to pleas from jet setting auto execs, CitiGroup only has to return to Hank Paulson's TARP window. Congressional committees berated Big Three CEO's for their inability to adapt to change. The three companies propose to split $25 billion in bridge financing.

Citi may get twice that amount, after ingesting $25 billion last month. That's some burn rate. But wait! Executives say they have a robust capital position. CEO Vikram Pandit told employees the company did not want to change its business model.

Is anyone else confused? Change, won't change? $25 billion here, $50 billion there? If we give CitiGrab $50 billion more, does that mean another 100,000 employees will be laid off?