Sorry, but Citi’s new spin campaign really warrants some counterspin.
As we noted this morning, Citigroup (C) is gin up some buzz from the fact that it’s taken $45 billion from TARP, and that this past month it’s lent out an incremental $45 billion (some of it even to cash-strapped cities, how patriotic!).
Now Reuters says:
“Citigroup Inc, the bank bailed out with $45 billion of U.S. taxpayers’ money, is using almost all of that money to make new loans…”
So if “all of that money” is going to new loans, then that must mean almost none of it is going to building up its capital cushion. Except we know that’s not true. The whole point of the TARP infusion (especially the second one, which was never sold as a way to boost lending) and the stress tests was to help bolster the company’s equity base.