Citigroup Buys Luxury Jet After Receiving Bailout

[RainMaker]

Not a big surprise. The biggest heist in the history of civilization.

http://www.streetinsider.com/Insiders+Blog/After+Receiving+Rescue+Funds,+Citigroup+(C)+Buys+A%20+$50M+Luxury+Jet/4328643.html

[flere-imsaho]

So glad we got away from that "buy troubled assets" idea....

Now we know why Paulson wanted indemnity for anything he did with the money....

[Eaglesfan27]

Ridiculous. In other news, over 50,000 jobs were cut today:

Bloody Monday job tally: more than 50,000 jobs lost - Jan. 26, 2009

[digamma]

Without knowing more about the deal, it's pretty hard to judge this one. From the article, they agreed to purchase the plane 2 years ago. Who knows what the outs in the purchase agreement were, but it could definitely be a sound financial decision to close on the deal rather than to pay to get out of the contract.

[digamma]

Dola...that's not to say the decision to purchase the plane two years ago can't be criticized.

[Dutch]

If anything, they should cancel that and order a plane built by Americans. That $50M payday will go to a French company and it's workers. Grrr...

[Subby]

Does an American company make the jet that was purchased? If so, is this just another means of economic stimulus?

[Subby]

Note to self: always wait until Dutch has posted. ALWAYS.

[JonInMiddleGA]

Originally Posted by digamma

Without knowing more about the deal, it's pretty hard to judge this one. From the article, they agreed to purchase the plane 2 years ago. Who knows what the outs in the purchase agreement were, but it could definitely be a sound financial decision to close on the deal rather than to pay to get out of the contract.

Good point, although I think it's kind of telling somehow that there's a contingent who I'm quite certain would rather they simply default on their agreement considering the role that has to do with the condition they're in to begin with.

[flere-imsaho]

It's been over a year (October 2007 to be specific) since it was pointed out, publically, that Citigroup had serious issues on their balance sheet and the stock price plunged for the first time. I guess it's too much to have asked them, less than a year after ordering the plane, to, considering their financial sheet situation, look for places to economize, even if it meant some sort of non-delivery penalty.

[RainMaker]

Why would they stop the delivery of the plane? They're the casino, they can't lose. Make money and buy whatever you want. Lose money and the taxpayers will give you the money to buy whatever you want.

[JediKooter]

Originally Posted by Dutch

If anything, they should cancel that and order a plane built by Americans. That $50M payday will go to a French company and it's workers. Grrr...

Great, so not only is it not an American plane they are buying, it's going to take two extra years for delivery because of the French's 30 hour work weeks.

[chesapeake]

*sigh*

I'm not saying that I would support communist guerillas running through the mansions of uber-wealthy Americans after raping and pillaging their families and estates. But these rich people need to get a clue somehow.

I'm pretty sure there are American options. Boeing makes luxury jets, albeit bigger than the Dassault jet. Isn't Gulfstream a Georgia company?

[Dutch]

Originally Posted by chesapeake

*sigh*

I'm not saying that I would support communist guerillas running through the mansions of uber-wealthy Americans after raping and pillaging their families and estates. But these rich people need to get a clue somehow.

I'm pretty sure there are American options. Boeing makes luxury jets, albeit bigger than the Dassault jet. Isn't Gulfstream a Georgia company?

I believe so. And while the Dassault jet looks pretty badass, Citigroup execs should know that they sit on the inside of the plane during flight and the Gulfstream jet comes standard with the stripper pole, not the Dassault.

[Greyroofoo]

This is why i don't vote democrat

[Noop]

Originally Posted by Greyroofoo

This is why i don't vote democrat

[RainMaker]

Originally Posted by Greyroofoo

This is why i don't vote democrat

Didn't the Republicans nationalize basically everything in this country?

[path12]

Originally Posted by Greyroofoo

This is why i don't vote democrat

Good point. I'm sure all the Citicorp executives are liberals.

[JonInMiddleGA]

Originally Posted by path12

Good point. I'm sure all the Citicorp executives are liberals.

Or pragmatists.

Check out the names political contributions from CFO Gary Crittenden over the past 4 years (I just picked an exec at random out of curiosity, his was the first name that came up when I Googled "citicorp executive").

http://www.opensecrets.org/indivs/se...&submit=Submit

In addition to what appear to be corporate lobbying groups for Citicorp & American Express, he made contributions to Rahm Emanuel, Chuck Hagel, Dick Durben, Richard Selby, Harry Reid, and Mitt Romney.

[Greyroofoo]

Originally Posted by path12

Good point. I'm sure all the Citicorp executives are liberals.

probably not, but I'm sure they loved the zillion dollar bailout the democrats passed, including both my representative John Dingell and senator Carl Levin that were up for re-election in 2008. Of course Barack voted for it as well.

[path12]

Originally Posted by JonInMiddleGA

Or pragmatists.

Check out the names political contributions from CFO Gary Crittenden over the past 4 years (I just picked an exec at random out of curiosity, his was the first name that came up when I Googled "citicorp executive").

http://www.opensecrets.org/indivs/se...&submit=Submit

In addition to what appear to be corporate lobbying groups for Citicorp & American Express, he made contributions to Rahm Emanuel, Chuck Hagel, Dick Durben, Richard Selby, Harry Reid, and Mitt Romney.

Fair enough -- true that most big corps play both sides of the fence. Just reacted to the initial picture in my mind of a bunch of banking executives arguing to close Gitmo and unionize.......!

[path12]

Originally Posted by Greyroofoo

probably not, but I'm sure they loved the zillion dollar bailout the democrats passed, including both my representative John Dingell and senator Carl Levin that were up for re-election in 2008. Of course Barack voted for it as well.

Well, both sides passed it if you'll recall. We agree that Citi loved it -- who wouldn't like to fuck things up royally for years and escape any responsibility for it with an unprecedented handout and a nice bonus to boot!

I really need to figure out how to declare myself a bank.

[MrDNA]

Originally Posted by path12

I really need to figure out how to declare myself a bank.

Have you tried standing at the highest point in your neighborhood and yelling "I am a bank!" while beating on your chest like Tarzan? If that doesn't work, try it again - but this time while wearing a funny hat.

[Anthony]

i've found that making any declaration while you have a banana shoved in your asshole will show anyone you're dead serious.

[Galaxy]

JUST PLANE DESPICABLE - New York Post


The NY Post article. Of course, these people are too naive to think of what the actual contract was for the jet that was purchased two years ago. Dumb move now? Sure. However, two years ago Citi was in a much better position.

[panerd]

Now they aren't going to take delivery of the jet and according to them it had nothing to do with the New York Post article. I swear these guys are so arrogant and dumb. So what posters are going to defend Citi's claim that they were probably not going to take delivery of the jet even before the expose? People defended the purchase using taxpayer money.

[flere-imsaho]

According to BusinessWeek, they previously decided to not take delivery of the jet, at about the same time they decided to sell some of their other jets.

According to ABC, they decided to not take delivery of the jet after the Obama White House called them and told them to "fix it".

[Calis]

You know, I guess working in the private aircraft industry I see things differently, but people blast these companies for making these purchases and jump on the bandwagon of blasting the automakers about their private Jets, but their are tons of jobs affected by this as well, and a good majority of the private plane makers are American.

So while people rail against these "luxuries", they employ a lot of people. The entire city of Wichita is ran off these companies.

Anyway, I don't blame people for being annoyed by it. I probably would be as well if I didn't rely on it.

[JediKooter]

I think the problem is, it's not they are buying them, it's that they just got a bail-out because supposedly they have no money to sustain their business. Just a guess...

[KWhit]

Originally Posted by JediKooter

I think the problem is, it's not they are buying them, it's that they just got a bail-out because supposedly they have no money to sustain their business. Just a guess...

Yep.

[Logan]

I was just on a conference call where we told one of our banks that we were recommending a "deny" of their TARP application to Treasury, and the Chairman asked us if they could get approved if they promised to buy a jet with the funds.

Ouch.

[Flasch186]

Originally Posted by flere-imsaho

So glad we got away from that "buy troubled assets" idea....

Now we know why Paulson wanted indemnity for anything he did with the money....

I repeat again, worst thing they did was allow Paulson to get away from the buying bad assets which is the only reason I was for the bailout and thought it necessary. I stated than the statement about NOT buying troubled assets was the worst thing to happen and the reason we will retest and possibly bust through last yeear's lows (unless of course they actually state that theyre going to buy bad assets again, which Ive heard rumblings about).

[SportsDino]

We don't want the TARP either, the reasons you don't see the bad assets being bought:

- Banks wanted to cherry pick so that only the truly truly worthless stuff would be absorbed by the government.

- Banks/Paulson realized they could just outright throw money at various places without anyone even looking... since the fear mongering was at such a point that no one would stand in their way, and no one would punish them after they have been caught.

- Troubled assets is just one form of corruption, when they saw they could use the money in other avenues of corruption (hint mergers be one of em), its all the same to them.

My position since the start has been do not buy banks crap, although I can't say I like the uses the money has alternatively been put to either. Here is a thought, how about any third option that does not involve money being used to grease banks with pork... or even better, NOT PASSING A CLEAR MONEY GRAB BILL IN THE FIRST PLACE!

Face it, any way you play it none of that 700+ billion was heading to joe schmoe investor... from day one it was going to the pockets of fatcats, so to me whether they are buying a jet, or having resort vacations, or anything else is just a big joke. People getting outraged over the trivial and still not daring to take a serious look at what is wrong with our economy just confuses me. When there are all of three banks ten years from now and the options for consumers are really screwed for options, then you will see what the bailout bought.

If we bought TARP, you would have seen the money disappear over night. Arguably, that might actually be better than funding further destruction of our economy... so you may be right!

[Galaxy]

Originally Posted by panerd

Now they aren't going to take delivery of the jet and according to them it had nothing to do with the New York Post article. I swear these guys are so arrogant and dumb. So what posters are going to defend Citi's claim that they were probably not going to take delivery of the jet even before the expose? People defended the purchase using taxpayer money.

No one defended the "purchase" of the jet. It was ordered over two years ago (when Citi was fat and was making money). I, at least, was saying would it make economic sense to cancel the order depending on what the contract was (and they'll have to put down a heft deposit, as well as payments in advance of taking delivery of the jet-which I'm guessing came before the bailout). In a way, would it be cheaper for Citi to purchase the jet (saving the millions of dollars in fees/deposits they paid for something they won't have) and re-sell it at some point. Of course, the media and general public really don't dig into the actual facts of the story. I'm not supporting the purchase, the use of private jets, or Wall Street's expense-account egos.

[RainMaker]

Originally Posted by Calis

You know, I guess working in the private aircraft industry I see things differently, but people blast these companies for making these purchases and jump on the bandwagon of blasting the automakers about their private Jets, but their are tons of jobs affected by this as well, and a good majority of the private plane makers are American.

So while people rail against these "luxuries", they employ a lot of people. The entire city of Wichita is ran off these companies.

Anyway, I don't blame people for being annoyed by it. I probably would be as well if I didn't rely on it.

I have no problem with any company buying private jets. Heck, I would if I could. The issue is with companies who borrow billions from the government to stay in business doing it. I'm sorry, but if you have to rely on billions of taxpayer dollars to survive, it's time your guys fly coach like the rest of us.

[Buccaneer]

Originally Posted by RainMaker

I have no problem with any company buying private jets. Heck, I would if I could. The issue is with companies who borrow billions from the government to stay in business doing it. I'm sorry, but if you have to rely on billions of taxpayer dollars to survive, it's time your guys fly coach like the rest of us.

I think you would be very hard pressed to name a single business or industry that has gotten billions of taxpayer dollars over the years.

[RainMaker]

Originally Posted by Buccaneer

I think you would be very hard pressed to name a single business or industry that has gotten billions of taxpayer dollars over the years.

FOXNews.com - U.S. Government Agrees to Massive Citigroup Bailout - Local News | News Articles | National News | US News

[Buccaneer]

Sorry, I forgot a key word: have NOT gotten billions...

It's funny yet sad to see so many now jumping on the bandwagon of taxpayer accountability. Where were you over the previous many decades with the billions of taxpayer dollars going to industry subsidies, corporate welfare, academic grants or Congressional pork without much accountability or public scrutiny?

[lynchjm24]

It's the ol' ropadope. Hey Congress. Hey Treasury... LOOK OVER HERE, WE ARE BUYING A NEW CORPORATE JET!!!!

The 'watchdogs' are so completely clueless they think this is oversight, while they pat themselves on the back for shaming them into refusing delivery on a jet the real damage is done behind their backs. Morons.

[JonInMiddleGA]

Originally Posted by Buccaneer

I think you would be very hard pressed to name a single business or industry that has gotten billions of taxpayer dollars over the years.

{raises hand}

I don't believe I've had the privilege in any of my industries, but it's a nice thought.

[Anthony]

I AM A BANK NOW GIVE ME MY BAILOUT!

and yes, i have a banana jammed up my asshole.


i tell you, the only thing that is learned from all this is history will show it absolutely pays to be a thief.

[SportsDino]

I haven't seen many backing the corporate pork crowd, it is so prevalent because the big lobby money is going for that purpose, and we keep turning a blind eye to its influence (to the point of actively obsessing about campaign dollar totals as how we identify who is going to win... dumb).

[RainMaker]

Originally Posted by Buccaneer

Sorry, I forgot a key word: have NOT gotten billions...

It's funny yet sad to see so many now jumping on the bandwagon of taxpayer accountability. Where were you over the previous many decades with the billions of taxpayer dollars going to industry subsidies, corporate welfare, academic grants or Congressional pork without much accountability or public scrutiny?

I've been as much a libertarian as I can over the years. It's kind of pointless though since both parties spend out the wazoo and have built the system so that no one else can play at their party.

[Buccaneer]

Originally Posted by JonInMiddleGA

{raises hand}

I don't believe I've had the privilege in any of my industries, but it's a nice thought.

Telecommunications, right? Let me check CAGW.org. Well, that's a little hard to find but one would have to go beyond pork spending and look at actual FCC budgets or money thrown at GTI.

[Buccaneer]

Originally Posted by RainMaker

I've been as much a libertarian as I can over the years. It's kind of pointless though since both parties spend out the wazoo and have built the system so that no one else can play at their party.

But there have been those within both parties that decry wasteful expenditures over the decades. I think the recent bailouts has opened the eyes to some of a corrupt system that has been going on for many years. One cannot affect change by giving up.

[JonInMiddleGA]

Originally Posted by Buccaneer

Telecommunications, right? Let me check CAGW.org. Well, that's a little hard to find but one would have to go beyond pork spending and look at actual FCC budgets or money thrown at GTI.

If you can find a case where the government has directly subsidized any client we've ever handled the advertising for then I'll eat my hat.

And if you're going to try to hold the FCC up as an example of the government subsidizing radio broadcasters then I imagine next you're going to suggest the FBI's existence subsidizes bank robbers & kidnappers because that's not a dissimilar relationship.

Sorry Bucc, but this particular dog simply doesn't hunt unless you want to ultimately count the existence of the federal government or the military as a subsidy of sorts for all industries.

[Buccaneer]

You have always been a hard pressed guy, you know?

[Passacaglia]

I.....declare.....BANKRUPTCY!!!

[sterlingice]

Originally Posted by Logan

I was just on a conference call where we told one of our banks that we were recommending a "deny" of their TARP application to Treasury, and the Chairman asked us if they could get approved if they promised to buy a jet with the funds.

Ouch.

SI

[sterlingice]

Originally Posted by SportsDino

We don't want the TARP either, the reasons you don't see the bad assets being bought:

- Banks wanted to cherry pick so that only the truly truly worthless stuff would be absorbed by the government.

- Banks/Paulson realized they could just outright throw money at various places without anyone even looking... since the fear mongering was at such a point that no one would stand in their way, and no one would punish them after they have been caught.

- Troubled assets is just one form of corruption, when they saw they could use the money in other avenues of corruption (hint mergers be one of em), its all the same to them.

My position since the start has been do not buy banks crap, although I can't say I like the uses the money has alternatively been put to either. Here is a thought, how about any third option that does not involve money being used to grease banks with pork... or even better, NOT PASSING A CLEAR MONEY GRAB BILL IN THE FIRST PLACE!

Face it, any way you play it none of that 700+ billion was heading to joe schmoe investor... from day one it was going to the pockets of fatcats, so to me whether they are buying a jet, or having resort vacations, or anything else is just a big joke. People getting outraged over the trivial and still not daring to take a serious look at what is wrong with our economy just confuses me. When there are all of three banks ten years from now and the options for consumers are really screwed for options, then you will see what the bailout bought.

If we bought TARP, you would have seen the money disappear over night. Arguably, that might actually be better than funding further destruction of our economy... so you may be right!

This is an excellent post. The bolded, in particular, is important. I love how people are getting upset at the stupidest stuff in this matter- the GM execs flying to Washington, Citi buying a corporate jet, and repair work on the national Mall. It just frustrates me that people get so distracted from the really important issues with this little piddly crap.

We should be arguing more about whether it's more important that we float a loan to the auto makers and risk taxpayer money or don't float a loan and risk taxpayer and increasingly rare manufacturing jobs. We should argue whether it was a good idea to create banks that we cannot allow to fail or nationalize them or buy up bad assets or how we should have tried to stem the bleeding from financial institutions if you think TARP was an awful idea. We should be arguing about whether the new bailout's money would be better spent for the whole of the economy in tax cuts or infrastructure money.

And we do argue these things but, boy, do people get hot and bothered by the silly stuff that is immaterial. And that just distracts from the big picture and we waste so much time with the little stuff.

SI