You would think someone in the U.S. establishment press would be following Uncle Sam's progress or lack thereof in getting out from under its investment in Citigroup, especially since the government promised that it would be fully divested from the bank holding company by the end of this year. From all appearances, you would be wrong.
It looks like the government may not be able to keep that year-end divestiture promise. For a fair number of news followers to learn that, the UK's Financial Times had to take an interest (link may require registration), and Drudge had to link to it:
US Treasury stumbles selling Citi shares
The US government is in danger of missing its deadline of divesting all of its Citigroup shares by the year-end after a fall in stock market trading volumes prompted authorities to slow down sales in July and August.
The lull could prompt the US Treasury, which has a stake of about 17 per cent in Citi, to consider a share offering instead of selling the stock in small quantities in the market, according to bankers and analysts.
“The sales of Citigroup stock have slowed way down in July and August ... The US Treasury will not finish its share sale by ... the end of the year,” said Linus Wilson, a professor of finance at the University of Louisiana. “The only option for the Treasury if it wants to exit Citigroup before the year-end seems to be to conduct a large secondary offering of the stake.”
The government only seeks to sell shares equivalent to a small percentage of the overall trading volume in Citi to avoid depressing the price.
By the end of August, less than half of the government’s 7.7bn shares in Citi had been sold, with the average number of shares sold per day falling sharply, the latest official data show. The Treasury has until Thursday to complete the sale of 1.5bn shares before entering a “blackout period” ahead of Citi’s third-quarter results.
... The government’s continued involvement complicates Citi’s efforts to convince investors its troubled past is behind it.
The lack of stateside establishment media interest is, as far as I can tell, complete. None of the stories returned in a search on the company's name at the Associated Press's main site contained any information citing the government's stock-selling difficulty. One item in a group of "Business Highlights" at least acknowledges that Citigroup "is still partly owned by taxpayers."
A search on the company's name at the New York Times also returned nothing relevant.
The Washington Post also has nothing relevant, though it does have an item also carried at the AP's main site on bonuses that are being paid to Citi execs in (of all things) company stock. But there's no mention of the problems the government is having in unloading its stake.
If Uncle Sam is having trouble unloading Citi, imagine the difficulties it might encounter pulling off its planned initial public offering of stock in Government/General Motors, an attempt which has conveniently been put off until after Election Day.
It would appear that the establishment press might be interested in keeping a lid on stories indicating that once the state gets in the business ownership door, it's very hard for it to get out -- assuming it even really wants to. Ultimately, that explains why one has to hope that the British and foreign press stay on top of developments such as these -- and that Drudge keeps on reviewing their work.
Meanwhile, Tim Geithner says that TARP has worked out just fine, almost as if we're in past-tense mode. Uh-huh.
Cross-posted at BizzyBlog.com.
