Profits on Citigroup Stock: Can They Be the Basis for Financing Stimulus?

Dean Baker

CEPR Reports and Issue Briefs from Center for Economic and Policy Research (CEPR)

Abstract: Last month the government announced plans to sell the stock it obtained in November of 2008 as part of its bailout package of Citigroup. The media jumped on the fact that, at the stock’s current market value, the government stands to earn an $8 billion profit on this stock. This profit was widely touted as evidence of the success of the bailout. In reality, the government’s profit on Citigroup stock was primarily the result of its own willingness to back up Citigroup. The increase in Citigroup’s stock price was largely driven by investors’ realization that the government would not let Citigroup fail.

Keywords: Citigroup; bailout; stimulus (search for similar items in EconPapers)
JEL-codes: E E5 E58 E6 (search for similar items in EconPapers)
Pages: 4 pages
Date: 2010-04
New Economics Papers: this item is included in nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:epo:papers:2010-09

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