Five Dumbest Things on Wall Street: Nov. 28
Citi's Field of Screams
The Citigroup (C) bailout puts U.S. taxpayers at risk. But Citi Field is safe at home.
The government pitched in to save the embattled bank this weekend, investing $20 billion of the $700 billion Troubled Asset Relief Program in Citi shares. The cash infusion, which follows an earlier $25 billion TARP investment, was a home run for Citi shareholders, sending the stock up 54% on Monday to almost $6.
Not lost in the hoopla was Citigroup's sponsorship of the New York Mets' new stadium, set to open in 2009. Citigroup signed the 20-year, $400 million naming rights two years ago when the bank was still minting money by selling subprime securities.The banking crisis has ushered in a whole new ballgame, however. And even the most ardent Met fan would expect Citi's first move after taking the government's money to be escaping the exorbitant stadium deal. Alas, that does not seem to be the case. Citi CFO Gary Crittenden told CNBC's Erin Burnett on Monday that those naming-rights decisions "were made in a different time and a different place and we have a legal and binding agreement around that and so I never heard it discussed." Crittenden continued, saying "I don't think it's an issue." Well, we do. And we feel safe in saying that the 53,000 Citigroup employees set to be laid off also have a pressing interest as to why the bank is spending money on stadium signage when it could be making loans to stimulate the economy. Or saving jobs. Dumb-o-meter score: 70 -- Like "Casey at the Bat," the mighty Citi has struck out.
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