TARP now estimated to cost $356 billion

[TheBreeze]

[quote=davelj][quote=TheBreeze]
By the way, according to the 10-K, Citi has $774 billion in deposits, $205 billion in repurchase agreements, $486 billion in short-term borrowings and long-term debt, $167 in Trading account liabilities and $164 in ‘other’ liabilities. So they have a little over $1 trillion in non-deposit liabilities. Their market cap is $15 billion. But yeah, I’m sure Citigroup could keep trucking right along if their creditors refused to roll over the $1 trillion in non-deposit liabilities.
[/quote]

Yes, and if you read the footnotes, you noticed that short-term debt – the stuff that has to be rolled over in less than a year – is just $126 billion, or less than 7% of its funding base. The FHLB borrowings and repurchase agreements are backed by specific collateral as it is.
[/quote]

About that collateral. How far off do you think the marks are? Here’s a chart that shows Citi’s marks (estimated):

http://2.bp.blogspot.com/_FM71j6-VkNE/Scka7JcKKeI/AAAAAAAABkA/pS34gaIK1jY/s1600-h/toxic+assets.jpg

They are carrying their commercial mortgages at 100% while FDIC has been selling commercial loans at around 50%:

http://zerohedge.blogspot.com/search?q=beal

So Citi has likely received $205 billion on collateral of only $100 billion or so (assuming the rest of their assets are similarly mismarked).

If all of Citi’s assets are mismarked by 50%, that’s just about enough to pay off the depositors. Wouldn’t it be cheaper for the government to shoot Citi now, pay off the depositors, and be done with them as opposed to guaranteeing their $1.8 trillion in liabilities?

I don’t get why you say that liquidating these big banks now would be more expensive for taxpayers than zombifying them. The up-front cost may be more but I think the long-term cost would be less.

[TheBreeze]

[quote=Allan from Fallbrook]

Breezhnev: Boy, that moniker I hung on you is becoming more and more apropos by the day. So, using your suggestion above, we become fascists and seize all the holdings and assets of the banks and distribute them to the people (via the State with a big “S”, of course). Do I have that right? Statist authoritarianism, huh? And you’re calling me a socialist?

[/quote]

Uhhh, no. I just recommend that the government follow the rule of law. When a bank becomes insolvent, it should be liquidated (per the rule of law) and not illegally propped up. It’s actually a very capitalist notion.

But yeah, boy howdy was that ever an appropriate moniker. YEEHAWWWW! GIT’ ER DUN!

[TheBreeze]

[quote=Allan from Fallbrook]

Breezhnev: Boy, that moniker I hung on you is becoming more and more apropos by the day. So, using your suggestion above, we become fascists and seize all the holdings and assets of the banks and distribute them to the people (via the State with a big “S”, of course). Do I have that right? Statist authoritarianism, huh? And you’re calling me a socialist?

[/quote]

Uhhh, no. I just recommend that the government follow the rule of law. When a bank becomes insolvent, it should be liquidated (per the rule of law) and not illegally propped up. It’s actually a very capitalist notion.

But yeah, boy howdy was that ever an appropriate moniker. YEEHAWWWW! GIT’ ER DUN!

[TheBreeze]

[quote=Allan from Fallbrook]

Breezhnev: Boy, that moniker I hung on you is becoming more and more apropos by the day. So, using your suggestion above, we become fascists and seize all the holdings and assets of the banks and distribute them to the people (via the State with a big “S”, of course). Do I have that right? Statist authoritarianism, huh? And you’re calling me a socialist?

[/quote]

Uhhh, no. I just recommend that the government follow the rule of law. When a bank becomes insolvent, it should be liquidated (per the rule of law) and not illegally propped up. It’s actually a very capitalist notion.

But yeah, boy howdy was that ever an appropriate moniker. YEEHAWWWW! GIT’ ER DUN!

[TheBreeze]

[quote=Allan from Fallbrook]

Breezhnev: Boy, that moniker I hung on you is becoming more and more apropos by the day. So, using your suggestion above, we become fascists and seize all the holdings and assets of the banks and distribute them to the people (via the State with a big “S”, of course). Do I have that right? Statist authoritarianism, huh? And you’re calling me a socialist?

[/quote]

Uhhh, no. I just recommend that the government follow the rule of law. When a bank becomes insolvent, it should be liquidated (per the rule of law) and not illegally propped up. It’s actually a very capitalist notion.

But yeah, boy howdy was that ever an appropriate moniker. YEEHAWWWW! GIT’ ER DUN!

[TheBreeze]

[quote=Allan from Fallbrook]

Breezhnev: Boy, that moniker I hung on you is becoming more and more apropos by the day. So, using your suggestion above, we become fascists and seize all the holdings and assets of the banks and distribute them to the people (via the State with a big “S”, of course). Do I have that right? Statist authoritarianism, huh? And you’re calling me a socialist?

[/quote]

Uhhh, no. I just recommend that the government follow the rule of law. When a bank becomes insolvent, it should be liquidated (per the rule of law) and not illegally propped up. It’s actually a very capitalist notion.

But yeah, boy howdy was that ever an appropriate moniker. YEEHAWWWW! GIT’ ER DUN!

[Allan from Fallbrook]

Breezhnev: Nope, you weren’t advocating following the rule of law. You’ve openly advocating tearing up all of the contracts and unlawfully seizing assets for distribution.

What part of the “propping up” is illegal, anyway? Just curious.

You’ve also managed to avoid facts with your incomparable sense of elision.

Okay, bubba, back to selling that fine Maytag family of appliances with your crack Sears team.

[Allan from Fallbrook]

Breezhnev: Nope, you weren’t advocating following the rule of law. You’ve openly advocating tearing up all of the contracts and unlawfully seizing assets for distribution.

What part of the “propping up” is illegal, anyway? Just curious.

You’ve also managed to avoid facts with your incomparable sense of elision.

Okay, bubba, back to selling that fine Maytag family of appliances with your crack Sears team.

[Allan from Fallbrook]

Breezhnev: Nope, you weren’t advocating following the rule of law. You’ve openly advocating tearing up all of the contracts and unlawfully seizing assets for distribution.

What part of the “propping up” is illegal, anyway? Just curious.

You’ve also managed to avoid facts with your incomparable sense of elision.

Okay, bubba, back to selling that fine Maytag family of appliances with your crack Sears team.

[Allan from Fallbrook]

Breezhnev: Nope, you weren’t advocating following the rule of law. You’ve openly advocating tearing up all of the contracts and unlawfully seizing assets for distribution.

What part of the “propping up” is illegal, anyway? Just curious.

You’ve also managed to avoid facts with your incomparable sense of elision.

Okay, bubba, back to selling that fine Maytag family of appliances with your crack Sears team.

[Allan from Fallbrook]

Breezhnev: Nope, you weren’t advocating following the rule of law. You’ve openly advocating tearing up all of the contracts and unlawfully seizing assets for distribution.

What part of the “propping up” is illegal, anyway? Just curious.

You’ve also managed to avoid facts with your incomparable sense of elision.

Okay, bubba, back to selling that fine Maytag family of appliances with your crack Sears team.

[davelj]

[quote=TheBreeze]

Uhhh, no. I just recommend that the government follow the rule of law. When a bank becomes insolvent, it should be liquidated (per the rule of law) and not illegally propped up. It’s actually a very capitalist notion.

[/quote]

There is no specific “rule of law” where placing a bank into receivership is concerned. (Although the process is governed by specific laws AFTER a bank has been placed into receivership.) It’s all based on rules and judgment as interpreted and exercised by the various regulatory bodies. Not much black and white – mostly gray area. Which is why the process seems kind of haphazard, particularly right now. As with other bank-related issues, you’re making this “rule of law” issue up. Prior to being placed into receivership, it basically doesn’t exist – it’s just a lot of guidelines and judgment calls. For better or worse.

[davelj]

[quote=TheBreeze]

Uhhh, no. I just recommend that the government follow the rule of law. When a bank becomes insolvent, it should be liquidated (per the rule of law) and not illegally propped up. It’s actually a very capitalist notion.

[/quote]

There is no specific “rule of law” where placing a bank into receivership is concerned. (Although the process is governed by specific laws AFTER a bank has been placed into receivership.) It’s all based on rules and judgment as interpreted and exercised by the various regulatory bodies. Not much black and white – mostly gray area. Which is why the process seems kind of haphazard, particularly right now. As with other bank-related issues, you’re making this “rule of law” issue up. Prior to being placed into receivership, it basically doesn’t exist – it’s just a lot of guidelines and judgment calls. For better or worse.

[davelj]

[quote=TheBreeze]

Uhhh, no. I just recommend that the government follow the rule of law. When a bank becomes insolvent, it should be liquidated (per the rule of law) and not illegally propped up. It’s actually a very capitalist notion.

[/quote]

There is no specific “rule of law” where placing a bank into receivership is concerned. (Although the process is governed by specific laws AFTER a bank has been placed into receivership.) It’s all based on rules and judgment as interpreted and exercised by the various regulatory bodies. Not much black and white – mostly gray area. Which is why the process seems kind of haphazard, particularly right now. As with other bank-related issues, you’re making this “rule of law” issue up. Prior to being placed into receivership, it basically doesn’t exist – it’s just a lot of guidelines and judgment calls. For better or worse.

[davelj]

[quote=TheBreeze]

Uhhh, no. I just recommend that the government follow the rule of law. When a bank becomes insolvent, it should be liquidated (per the rule of law) and not illegally propped up. It’s actually a very capitalist notion.

[/quote]

There is no specific “rule of law” where placing a bank into receivership is concerned. (Although the process is governed by specific laws AFTER a bank has been placed into receivership.) It’s all based on rules and judgment as interpreted and exercised by the various regulatory bodies. Not much black and white – mostly gray area. Which is why the process seems kind of haphazard, particularly right now. As with other bank-related issues, you’re making this “rule of law” issue up. Prior to being placed into receivership, it basically doesn’t exist – it’s just a lot of guidelines and judgment calls. For better or worse.

[Author]

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