The stock market had a roller coaster ride this week, mostly of long downward falling hills. US stocks slid to a 12 year low. The government took over 40% of Citigroup Inc. this week and that cut shareholders’ stakes in Citigroup by 74%. Citigroup’s stock dropped 39% after the Treasury agreed to convert as much as $25 billion of preferred shares into common stock. If you stopped counting, let me inform you that this is the third rescue of this bank. Bank of America did not do any better and it’s stock plunged 26 percent.
“The Citi story is a nightmare that keeps getting worse, with no end in sight,” said Matthew Kaufler, money manager at Federated Clover Investment Advisors, which oversees $2.1 billion. “The fact that it’s occurring on a day when we’re getting horrible GDP numbers adds some kerosene to the mix.”
This was the third straight week of declines. Wall Street does not appear to be excited about the new president or his Marxist ways. The index fell 11% in total here in the month of February mainly because of the passage of the Porkulus Bill and the knowledge that we are falling into a deepening recession.
Obviously, bank nationalization does not solve the issues. It makes matters worse. But the government seems hell bent on destroying this country, so I expect more of this and it won’t be long before the government owns more than 50% of Citigroup so they make all the decisions. Stockholders can go to Hell I guess.