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 back to Citibank.