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Monday, November 24, 2008

Paulson Rescues Citigroup

The US government, in the shape of Hank Paulson (the hapless and hopeless US Treasury Secretary), has come to the rescue of Citigroup which has seen its shareprice collapse over the last week.

Paulson has come up with a package, including guarantees against losses on assets, worth $306BN together with a $20BN.

There is irony here.

Those of you with a reasonable memory may recall that when Lehman Brothers faced a similar crisis, Paulson was happy to let it go to the wall. The result being the current banking crisis and the world's worst recession since the 1930's.

The question that the shareholders and employees of Lehman Brothers doubtless wish to ask Paulson is this:

"Why do you consider Citigroup worth saving, but not Lehman Brothers?"

Paulson doubtless must now be wishing that he had rescued Lehman Brothers, thus saving the world from his self inflicted recession and banking crisis.

Bush and his team most assuredly are leaving behind them quite a legacy, whether this is the legacy that they would wish is of course another matter.

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