The bailout of Citigroup has made people in New York angrier than they were about any of the other government rescues of financial institutions this year.
In a random sample of people inside the Port Authority, the world’s busiest bus terminal, only one man backed the government decision to prop up the New York-based bank, even though it is a huge employer in the region.
All the rest are angry – even on the day before Thanksgiving .
“They were bailed out before, this is the second bailout, so what’s going on? Are they going to ask for another bailout soon?” asked Cheril Nichols, a 50-year-old nurse from New Jersey.
“It is wasteful, very wasteful,” said retiree William Dwyer, 70.
Earlier this week, the US government announced an injection of US$20 billion for Citigroup and a plan to shoulder most of its potential losses on US$306 billion of toxic assets, after the bank’s shares sank more than 60 per cent in the previous week due to concern about its ability to survive.
The US$20 billion of government capital comes after a $25 billion injection last month.
In effect, the government has pledged about US$1,000 per American to guarantee the bank’s assets.
“This is not the right thing to do. They [the US government] should help the people, not the big companies,” said Renu Malconi, 38, from New Jersey.
Citigroup has lost US$20.3 billion in the last year and many analysts expect further losses because it owns many mortgage and other assets now worth far less than their original value.
Unlike Lehman Brother, which was forced to file for bankruptcy protection when the government rejected its pleas for help, Citigroup does business with millions of ordinary people every day, so emotions run higher about Citi.
In exchange for the bailout, Citigroup slashed its quarterly dividend and cannot raise it for three years without US consent. But taxpayers want more sacrifices from the bank’s board and top management.
“It’s ridiculous. If I did as poorly as they did in my job, I would be out of the job, so why are they not accountable?” said Mike Delibero, an IT salesman.
The frustration on the streets of New York was echoed by two of New York’s major daily newspapers, The Wall Street Journal and The New York Post, which slammed the board of Citigroup on Tuesday with calls for all or many of its directors to quit or be removed.
The Post on Wednesday ran a series of letters from readers, all of them harshly criticising the bailout and Citigroup’s former and current executives and board members.
High salaries, seven-figure bonuses and an agreement for the bank to pay US$400 million to name the New York Mets baseball team’s new stadium Citi Field haven’t helped sentiment.
“If they are spending money on silly things, they should better keep it. The one thing I know is that it affects me, too,” said Hilda, 55, from New Jersey, who declined to give her last name.
After several calls, no Citigroup officials were available for comment.
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New Yorkers Fume at Citigroup Bailout
Reuters in New York
27 November 2008
The bailout of Citigroup has made people in New York angrier than they were about any of the other government rescues of financial institutions this year.
In a random sample of people inside the Port Authority, the world’s busiest bus terminal, only one man backed the government decision to prop up the New York-based bank, even though it is a huge employer in the region.
All the rest are angry – even on the day before Thanksgiving .
“They were bailed out before, this is the second bailout, so what’s going on? Are they going to ask for another bailout soon?” asked Cheril Nichols, a 50-year-old nurse from New Jersey.
“It is wasteful, very wasteful,” said retiree William Dwyer, 70.
Earlier this week, the US government announced an injection of US$20 billion for Citigroup and a plan to shoulder most of its potential losses on US$306 billion of toxic assets, after the bank’s shares sank more than 60 per cent in the previous week due to concern about its ability to survive.
The US$20 billion of government capital comes after a $25 billion injection last month.
In effect, the government has pledged about US$1,000 per American to guarantee the bank’s assets.
“This is not the right thing to do. They [the US government] should help the people, not the big companies,” said Renu Malconi, 38, from New Jersey.
Citigroup has lost US$20.3 billion in the last year and many analysts expect further losses because it owns many mortgage and other assets now worth far less than their original value.
Unlike Lehman Brother, which was forced to file for bankruptcy protection when the government rejected its pleas for help, Citigroup does business with millions of ordinary people every day, so emotions run higher about Citi.
In exchange for the bailout, Citigroup slashed its quarterly dividend and cannot raise it for three years without US consent. But taxpayers want more sacrifices from the bank’s board and top management.
“It’s ridiculous. If I did as poorly as they did in my job, I would be out of the job, so why are they not accountable?” said Mike Delibero, an IT salesman.
The frustration on the streets of New York was echoed by two of New York’s major daily newspapers, The Wall Street Journal and The New York Post, which slammed the board of Citigroup on Tuesday with calls for all or many of its directors to quit or be removed.
The Post on Wednesday ran a series of letters from readers, all of them harshly criticising the bailout and Citigroup’s former and current executives and board members.
High salaries, seven-figure bonuses and an agreement for the bank to pay US$400 million to name the New York Mets baseball team’s new stadium Citi Field haven’t helped sentiment.
“If they are spending money on silly things, they should better keep it. The one thing I know is that it affects me, too,” said Hilda, 55, from New Jersey, who declined to give her last name.
After several calls, no Citigroup officials were available for comment.
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