Thursday, November 27, 2008

Thomas Friedman sees the light, or the dark

The New York Times roving columnist Thomas Friedman is frightened and sickened at what greed, a lack of ethics and irresponsibility have wrought to the world's finances. Citigroup, just rescued for hundred of billions of taxpayer dollars, is a prime example.
That’s how we got here — a near total breakdown of responsibility at every link in our financial chain, and now we either bail out the people who brought us here or risk a total systemic crash. These are the wages of our sins. I used to say our kids will pay dearly for this. But actually, it’s our problem. For the next few years we’re all going to be working harder for less money and fewer government services — if we’re lucky.
He is not the only New Yorker sick and angry despite the company being one of New York City's largest employers.
Earlier this week, the U.S. government announced an injection of $20 billion for Citigroup Inc and a plan to shoulder most of its potential losses on $306 billion of toxic assets, after the bank's shares sank more than 60 percent in the previous week due to concern about its ability to survive.

The $20 billion of government capital comes after a $25 billion injection last month.

In effect, the government has pledged about $1,000 per American to guarantee the bank's assets.

"This is not the right thing to do. They (the U.S. government) should help the people, not the big companies," said Renu Malconi, 38, from New Jersey.
The big question is what next? Is Bank of America any sounder? How is Wells Fargo really?

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