The Wall Street Journal quotes Citibank’s executives are preparing their investors for the worst!!!!!!!!!!!!

Receiving what is known as the doomsday scenario, a two step reduction in it’s bond rating,  Citibank is going to cost it’s investors billions…

It will suck their money right out of their accounts and right into the trashcan…  If you are invested in Citibank, kiss all your money goodbye..

But wait?

What about the Dodd-Frank Finance Reform Bill?  Doesn’t that kick in or something?

What happens is that under the Dodd Finance Reform Bill, Citibank is required, because it’s ratings are much more risky now, to have a higher amount in reserves than it does if it has a very high rating….

That money, has to come out of its profits.

So profit will be short by …. $4.7 billion for the required additional collateral for its holding company and its banking subsidiary….

$4.7 billion.

But wait a minute you should say.  Isn’t that a good thing, at least much better than would have happened under Republican leadership just over 5 years ago?  Shouldn’t a bad bank HAVE to keep more money in reserves than a good bank, so the chance of it failing, are decreased from extremely likely to zero?

One would think.  Unless of course you are one of these people.  Michelle Bachmann, Rick Santorum, Newt Gingrich, Rick Perry, Herman Cain, and Mitt Romney.  These six people believe the investors should get the $4.7 billion, and the federal government should bail out the banks when they fail…

This is what’s behind their opposition of the Dodd-Frank Wall Street Reform Act.  The only reason one would oppose it, is because it protects the financial solubility of the institution, instead of the investor.

If a bank fails and we lose our money, that is just too bad in their eyes.  But for them to lose their money, is unthinkable.

Yes, they are indeed ridiculous.

So in reality, thanks in part to the leadership of Michael Kaufman from Delaware,  when a bank engages risky behavior, it must put more into its reserves, taking it away from the investors.

This is only fair.  For when things get in order, and reserves can be dropped again, it is only the investors who get that bonus in one fell sweep.

So we can see in a nutshell, why when it comes to economic issues, we cannot let Republicans again have the reins of power…  They would dismantle this reform, just like they dismantled the original protections put in place since the 1930’s, and that dismantling, was  the sole cause of the meltdown that put all those American’s out of work…

So things are working as they should.  The bank was risky, and now  must pay the penalty.   What’s nice about having Democrats in charge, is that the penalty they payed, was to themselves….

Democrats are intelligent.

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