Citigroup Bailout: Not Far Enough

After reviewing the “Term Sheet” and the write-ups in the press I am not happy. The U.S. Government didn’t go far enough. I’m not convinced that we won’t be exactly in the same position I was worrying about with direct cash injections and no Good Bank/Bad Bank structure. Liabilities could well exceed Citigroup’s losses plus the second and third loss guarantees. The deal is exceptionally complicated, without full transparency for either the Government or the U.S. taxpayer. The fact that equity holders are getting bailed out - at least temporarily - offends me, given that the U.S. taxpayer is bearing the lion’s share of the risk. This looks and feels like AIG redux - except perhaps worse. Transparency. Simplicity. Avoidance of moral hazard. Will we ever learn?