And the bailouts continue. We have updated our chart to include the rescue plan for Citigroup. Because this complex bailout is not all under the TARP, we are giving the bank its very own bubble.
After Citigroup lost half its value in the stock market last week, the government decided to throw a hefty life ring to the drowning bank. The government will back roughly $306 billion in loans and securities and will inject about $20 billion in capital. This is in addition to the $25 billion the bank received not too long ago. As part of the agreement, Citigroup will freeze dividend payments at one penny per share per quarter for three years, restrict executive compensation and absorb the first $29 billion in losses and 10 percent of subsequent losses. The government could absorb up to $247.5 billion of Citigroupâs losses.
