by Byrne Hobart
Congratulations: you, the taxpayer, now own even more of what used to be America’s biggest bank. That’s right: the government is once again raising its stake in Citigroup by switching from preferred stock (which pays a high dividend, and is basically like a bond) to common stock (which is closer to just owning part of the business).
So, in theory, We The People own 36% of Citibank. And this is considered very big news.
But is it? Consider how much the government is already involved in Citi:
- Most of Citibank’s deposits are guaranteed by the FDIC. Which means that when you deposit money at Citibank, you’re really lending it to the government, which is lending the money