All the talk on the street this week has been about the bail out of Citi and the big three auto makers. The big boys in Detroit are putting together plans on how to make like Lazarus and come back to life. Meanwhile, Citi is moving ahead with the naming rights to the new New York Mets baseball field in Queens. It will be called simply Citi Field. It will be the largest price paid for naming rights in the history of such things. Citi will pay $20 million a year for 20 years. My trusty pencil and paper tells me that is $400 million. According to Time magazine, this is what Citi is getting from us, the taxpayers:
"Specifically, the government will back a $306 billion pool of troubled loans and securities largely related to the foundering residential and commercial real estate markets. After Citi absorbs the first $29 billion in losses on these securities, the government — first the Treasury Department and then the Federal Deposit Insurance Corporation (FDIC) — will step in and bear 90% of any further losses. In return, the government gets up to $7 billion in preferred Citi stock and the right to buy more shares at $10.61 — not a bargain these days, with Citi trading in the single digits, but perhaps worth more down the road. On top of that, $20 billion from the Treasury's Troubled Asset Relief Program (TARP) will be injected into the company in exchange for preferred shares that come with an 8% dividend."
Are you tired of grabbing your ankles yet?