So Shooters, today's big news: Citigroup to pay back $20 billion in TARP to government. Why stop so soon the magic IV drip known as TARP funding (which had just been so graciously extended by Treasury)? Well, it's not because the company is back in good health. They just want to keep ahead of the talent-poaching with the zombies doing jumping jacks - the likes of Goldman Sachs.

Having just come off an IV drip-fueled recovery from pneumonia last week myself, I know it's hard to work at full capacity even now. I'm still weak. Citigroup will be paying for its government payback by offering new shares and - surprise - taking on new debt!

Obviously one golden rule escapes Citi: Neither a borrower nor a lender be. Too bad that's their business model's backbone. Punishing shareholders with dilative offerings is their only powerful move. Just like collecting higher interest on their customers maxed-out credit cards, this move doesn't equal solvency. We'd dump shares of Citi right now - our Federal Government plans to do so sometime this year. (Too bad they weren't daytrading like the rest of Wall Street.)

Of course, the time for outrage was long ago... back in the go-go late 80s. Like today, it was a time between recessions. Unlike today, it was a time when the Fed Government was about to look at balancing the budget. But on Wall Street right now, banks are paying back TARP left and right and it's a wonderful life once again.

We don't believe the WSJ hooey, and look toward a Ghost of Citi Past to show us the true health of his former company.

Contrite Former CEO Tells All as Citizen

I would compartmentalize the industry for the same reason you compartmentalize ships. If you have a leak, the leak doesn't spread and sink the whole vessel. So generally speaking, you'd have consumer banking separate from trading bonds and equity.

- Former Citicorp CEO, John S. Reed, on Nov. 6, 2009

Now you tell us, John? This is not a case of better late than never. The bastard company that he stitched together with the infamous Sandy Weil is just one of many overweight passengers on our beleaguered ship of state.

Back in 1989, Sarah Bartlett for the New York Times wrote of John:

Talking with John S. Reed, the chairman of Citicorp, is a little like standing on the bow of an ocean liner and peering into the distance through a spyglass. There, just barely visible on the horizon, is the fuzzy outline of the Citicorp of tomorrow.

Reed boasted to her of creating the world's first truly global institution. Mombasa, Bangkok, Sao Paulo, Dusseldorf... it all sounded so good, until the merry-go-globe stopped in its tracks in the credit crisis.

Today, in late 2009, Reed writes to the New York Times to apologize for his role in creating Citigroup. His mea culpa asks pardon: When you're running a company, you do what you think is right for stockholders. Right now, I'm looking at this as a citizen.

A citizen? Wow, he must still be holding a lot of Citi stock... We're now on equal footing with Mr. Reed, since our government Treasury now holds 34% of this accursed stock.

Now we've hit on the base problem of modern economics. Back in Adam Smith's day, citizenship was getting a new patina: fresh blood crying, Freedom! Non-feudal economics played out as moral philosophy. Wall Street tells you its science, while it's calculations and models constantly fail.

Our 70-yr-old talking ghost of a former global financial wunderkind, John S. Reed shows us the dilemma in black and white. Back in '89, a few day's before hitting 50, Reed was a greed-based, bigger-is-better economist. Even the Third World was his oyster. Today, he's decided to become a philosopher from his Park Avenue office.

We wonder whether this Scrooge will really pay campaign donations to those who would re-instate the Glass-Steagall Act. Moral philosophy only chugs along into the fighting ring when plenty of money backs it.

The One-Man Bank Smack-Down

However, this would mean giving dough to one Vermont independent, Senator Bernard Sanders. (This guy is also the only conscientious objector that says: Remove Ben from his Fed Perch. 60 votes are needed this week, and Ben has no reason to quake in his Italian loafers.)

Sanders says: If a bank is too big to fail, it's too big to exist. His proposal allows Treasury to come in and take a hacksaw to institutions in the financial sector. Note that the New York Times now calls this sector: the nation's financial system - another sign that Wall Street's merged darlings and bank holding companies are way too big for their bespoke britches.

So Sanders leads the charge: Break-up Citigroup. And while you have the machete out, Geithner, tackle Bank of America, JP Morgan Chase, and Wells Fargo. It should come then as no surprise that when pressed, Senator Sanders would check the box labeled Socialist. I'm betting that's why he did not include government sucklings Fannie Mae and Freddie Mac on the list of break-up candidates.

Regards,
Samantha Buker

The New York Times Investment Citigroup Bank of america