Your Tax Dollars at Work: Citi Buys New Corporate Jet

[Angrycat]

Quote from fhl:

Saying that citi "forced" the taxpayer to give them money seems a bit strong, doesn't it? Especially when Paulson actually did "force" banks that didn't want the money to go along and take money. That is what Paulson did isn't it? Why yes, it is. So why is your beef with citi?

Because Citi DID want the money and asked for it and because Citi was all for a bank bailout plan. And don't mistake my displeasure with Citi as a lack thereof for Paulson. Don't even get me started on government.

 

[ML_QUANT]

The issue here is not what these executives do!
The question should be what the US taxpayer going to do about it?

NOTHING..........

 

[bit]

Quote from fhl:

Saying that citi "forced" the taxpayer to give them money seems a bit strong, doesn't it? Especially when Paulson actually did "force" banks that didn't want the money to go along and take money. That is what Paulson did isn't it? Why yes, it is. So why is your beef with citi?

lol. Paulson, GS, C... yeah, there's no connection there...

 

[Banjo]

Citigroup cancels plans to buy $50 million executive jet A

http://news.yahoo.com/s/ap/20090127/ap_on_bi_ge/citigroup_jet

 

[9999]

Quote from Banjo:

Citigroup cancels plans to buy $50 million executive jet A

http://news.yahoo.com/s/ap/20090127/ap_on_bi_ge/citigroup_jet

From the article above:

"Agnew said buyers typically pay a few percentage points of the purchase price when placing the order, then a series of payments as production begins and other milestones are reached. They might pay about 35 percent of the cost before taking delivery, then pay the balance when taking the plane, he said. At that rate, Citi could have already spent $17.5 million on a plane it will no longer receive."

Just what I thought. At this point the best thing would have been to get it and resell it right away.

 

[stock_trad3r]

Quote from richardyu301:

http://www.nakedcapitalism.com/2009/01/your-tax-dollars-at-work-citi-buys-new.html

Even if there were a rationale for Citi buying a corporate jet now (which I cannot fathom, given their horrid financial condiiton), why buy new? There are no doubt plenty of used jets for sale right now.

This incident illustrates the degree to which a corporate/financial elite has developed in the US. Top executives feel they have a right to fly on private jets. If the company is, say, a Wal-Mart, with a lot of operations in remote areas where access by commercial flights is indirect, private jets make sense (Sam Walton famously flew his own plane to visit stores). But for Citigroup, where the vast majority of their operations are in major, well served financial centers, it's hard to justify (the usual rationale is that the top brass can discuss business on a private plane, while they cannot do so on commercial flights. Funny how that was seldom seen as a justification in the early 1980s, when executives were for the most part content to fly first class).

From the New York Post (hat tip reader Marshall):

Beleaguered Citigroup is upgrading its mile-high club with a brand-new $50 million corporate jet - only this time, it's the taxpayers who are getting screwed.

Even though the bank's stock is as cheap as a gallon of gas and it's burning through a $45 billion taxpayer-funded rescue, the airhead execs pushed through the purchase of a new Dassault Falcon 7X, according to a source familiar with the deal.

The French-made luxury jet seats up to 12 in a plush interior with leather seats, sofas and a customizable entertainment center, according to Dassault's sales literature. It can cruise 5,950 miles before refueling and has a top speed of 559 mph.

There are just nine of these top-of-the-line models in the United States, with Dassault's European factory churning out three to four 7Xs a month.

Citigroup decided to get its new wings two years ago, when the financial-services giant was flush with cash, but it still intends to take possession of the jet this year despite its current woes, the source said....

It's not uncommon for large companies to pay a deposit on a new plane then cancel the order before delivery, according to a source in the corporate aviation business.

Citigroup execs are also quietly trying to unload two of their older Dassault 900EXs.

Those jets, nearly 10 years old, are worth an estimated $27 million each. They were still listed for sale yesterday on the Web site of Citigroup's aviation broker, Aviation Professionals.

bfft no one cares. futures surging

Dow 8,167.00 74.00 0.91
S&P 500 848.60 9.40 1.12
NASDAQ 100 1,197.25 11.50 0.97

 

[Banff01]

Daal,

you have some kind of wierd logic. The question IS NOT if THEY NEED A PLANE? The question is CAN THEY AFFORD A PLANE?
If you're getting BILLIONS in help from the tax payers then you CLEARLY CAN'T AFFORD a private plane.
Think about it. It's that simple.

Quote from Daal:

I figure less than 1% of the critics do some kind of math, yet they speak as if they wrote a paper on risk adjusted cost savings from corporate jets

 

[Banff01]

It's astounding that it takes newspaper articles and public uproar for them to cancel such a dumbass plan. Their arrogance is unbelievable. Those execs should all be fired. I can't believe that government is paying these incompetents billions of dollars. I say it's money wasted because this company will go down anyway unless the whole leadership is replaced.

Quote from ddog:

Citi caves on corporate jet

http://abcnews.go.com/Business/Politics/story?id=6740011&page=1

 

[Angrycat]

Quote from Banff01:

It's astounding that it takes newspaper articles and public uproar for them to cancel such a dumbass plan. Their arrogance is unbelievable. Those execs should all be fired. I can't believe that government is paying these incompetents billions of dollars. I say it's money wasted because this company will go down anyway unless the whole leadership is replaced.

Replaced by whom? The incompetents at Treasury and the Fed?

Nature has a way of dealing with incompetence - failure. The most competent and correct action that government can take is to get out of the way and to not suck wealth creators dry to keep a steady flow of funds streaming into the black holes that are these wealth destroyers.

The fact that nobody in government is competent enough to understand that means that they all should also be fired - without pensions.

 

[Banff01]

Quote from Angrycat:

Replaced by whom? The incompetents at Treasury and the Fed?

Nature has a way of dealing with incompetence - failure. The most competent and correct action that government can take is to get out of the way and to not suck wealth creators dry to keep a steady flow of funds streaming into the black holes that are these wealth destroyers.

The fact that nobody in government is competent enough to understand that means that they all should also be fired - without pensions.

I agree with you, Angrycat. Government should only provide guarantees and supervise an orderly bankruptcy and closure of shops like City. No money should be given to them to try to revive them. It's money wasted and their new corporate jet plan clearly shows that even in crises of this proportion they have learned nothing.