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Citibank was bailed out, the stock rose over 50% overnight and the CEO got paid hundreds of millions.

• alexb_ 3y ago
  You realize bailouts are loans, right? They aren't just free money.
  • jampekka 3y ago
    There were many forms of bailout for Citibank (and others). Some were (extremely favorably termed) loans, some government backing of their bad assets and some were buying stock that the market didn't want to touch. May or may not be technically free money, but for sure Citibank doesn't hand out loans to bankrupt customers on such terms. The gov could have e.g. let Citibank go bankrupt and just take it for free. Like banks do to their customers.
• vkou 3y ago
  Citibank shareholders got diluted, and Citibank paid back for that bailout, with the taxpayers profiting ~12 billion in total. If the money couldn't have been paid back, the shareholders wouldn't have been diluted. They would have been wiped out.
  • jampekka 3y ago
    If the gov wouldn't have bailed out Citibank the shareholders would have been wiped out in the first place. And gov would have gotten it for essentially free if wanted. It was not like they saw that here's a great investment opportunity to make profit for taxpayers.
    • vkou 3y ago
      > If the gov wouldn't have bailed out Citibank the shareholders would have been wiped out in the first place. And also the entire economy would have collapsed, and we'd all be trading ammunition for bottlecaps, instead of merely living through a nasty recession. Which is why they backstopped it. Yes, it would have been cheaper to let Citi fail and nationalize it, but it wouldn't have been cheaper to then have to deal with all the contagion and all the other businesses that would have exploded because of it.