TARP reversal hits Citigroup

While we have voiced support for the change in how Troubled Asset Relief Program (TARP) funds will be used, it's fair to say that the news is not good for all banks. Case in point: Citigroup. By one report, Citigroup had $80 billion in toxic securities that might have been sold to the government. Those assets included just north of $40 billion of subprime and other residential-loan assets. No wonder the stock sold off on the news. But even if the sale to TARP had gone through, the bank would have taken a loss; it was a matter of how much. And there may be other buyers that emerge. Fortune notes that a lot of distressed asset buyers have been on the sidelines waiting for the government to make its move. Now that it has shifted plans, we might see a private sale along the lines of Merrill Lynch's big sale to Lone Star.

For more:
- here's the Fortune article

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