Roubini Discusses BAC and C Nationalization (Video)
When Nouriel Roubini talks we listen. In his latest interview on Tech Ticker he discussed Bank of America (BAC) and Citigroup (C) and their journeys towards partial if not full Nationalization.
The discussion focus was Citigroup’s announcement to convert preferred stock into common equity. From Tech Ticker,
The conversion would give the government up to 36% control of Citigroup stock and leave existing common shareholders with as little as 26% of the company’s common stock. That explains why the stock tumbled 39% to $1.50 Friday despite CEO Vikram Pandit’s strange declaration: “In many ways for those people who have a concern about nationalization, this announcement should put those concerns to rest.”
Pandit’s claim is “like saying you’re half-pregnant,” says Nouriel Roubini and economics professor at NYU’s Stern School and chairman of RGE Monitor.
“The government has already taken over the financial system,” Roubini says, noting U.S. policymakers have committed $9 trillion to rescue the financial system and already spent $2 trillion. “So let’s stop the delusion about ‘no nationalization.’”
Alongside this another big question is with Citigroup’s partial Nationalization if they need another capital infusion then what the ownership breakdown be? Will the US taxpayer bump up to a 50%+ stake? Should be interesting to see.
Clip below, enjoy (Note: RSS and Email Readers click through to the actual post to watch the video):
Source:
Roubini: Fully Nationalizing Citi and Bank of America Would Be Better
Aaron Task, Tech Ticker
Yahoo Finance, Feb 27, 2009 06:15pm EST
