Sunday, August 21, 2011
I-N-S-O-L-V-E-N-T: Citigroup Was In Debt To The Fed 7 Out Of Every 10 Days From August 2007 Through April 2010
Bloomberg notes, in an article entitled "Wall Street Aristocracy Got $1.2T in Loans":
Citigroup was in debt to the Fed on seven out of every 10 days from August 2007 through April 2010, the most frequent U.S. borrower among the 100 biggest publicly traded firms by pre- crisis market valuation. On average, the bank had a daily balance at the Fed of almost $20 billion.
In other words, Citi was wholly insolvent, but the Fed decided to keep it moving, at least as a zombie.
The Bloomberg article includes a great quote:
“Why in hell does the Federal Reserve seem to be able to find the way to help these entities that are gigantic?” U.S. Representative Walter B. Jones, a Republican from North Carolina, said at a June 1 congressional hearing in Washington on Fed lending disclosure. “They get help when the average businessperson down in eastern North Carolina, and probably across America, they can’t even go to a bank they’ve been banking with for 15 or 20 years and get a loan.”