J. D. Swampfox

Encroaching Equitization of Citi's Capital Structure

The writer says, "The real concern should be for other convertible (and potentially higher up in the capital structure securities), who unlike ADIA can ill afford to lose out on their heretofore considered safe investments." Yup, not only mom and pop but beaucoup other banks and insurance companies own these "higher-up-in-the-capi... securities. 80 percent ownership by the government is just 'round the corner. Think, though, how long will it take for a bank to earn and save back enough profits to buy back as treasury stock an 80 percent ownership position? After all, the government will not be able to just offer its 80 percent position to the public in the open market. I'm afraid that government control of banks through this "partial ownership" vehicle is here for a long time