BEHIND THE NEWS: Lessons learned

November 24, 2008 12:34:12 PM PST
It was a great personal decision, that house I bought in Los Angeles. It was where my daughter was born, and it's home to a flood of memories of gatherings of family and friends.

But as a financial decision, it was a disaster. Buy a home at the top of the market, sell at the bottom. Sell at 60% of our cost, to be precise. Not exactly how Warren Buffet got rich.

The money part of the loss still stings. So does the psychological part. There's an upside and downside to that: I'm a little less confident about investing (that's not so good), but I'm also a little less cocky (that's good).

Buying that house when I did and selling it when I did turns out to have been a not-very-smart-decision, so I figure I'm in a great position to ask for a bailout. Why not? My losses wouldn't cost the taxpayers a nano-sliver of what all these other bailouts are costing - and I figure the executives who got their giant corporations into trouble knew a lot more about financing and investments than I did.

I'm not holding my breath, of course. But if the new Secretary of the Treasury is looking to spread the love and ease the pain, I can easily produce all the records showing the house-transaction-that-will-haunt-me-forever.

Just a thought.

This red-ink-drenched decision is top of mind because of the latest government bailout -- of the giant Citigroup, parent of Citibank and of Smith Barney. Citigroup has $2 trillion in assets (just a tad below what I had when I sold my house at a huge loss in the early 90s), but it now has $20 billion more of our money - this is on top of the $25 billion it got a few weeks ago. We've also guaranteed that we'd cover 90% of Citigroup's losses from $306 billion in likely toxic assets on Citigroup's balance sheet. Citigroup's contribution to this: it will eat the first $29 billion of its losses.

Nice of them.

Ok - I get it, again. It's a giant bank and if it fails a lot of other companies and people fail with it.

But then comes word that Citigroup has no intention of pulling out of its $400 million sponsorship of the new Mets stadium, to be called CitiField. The name itself will be a punch line if this all doesn't work out. ( I'm talking about the bailout, not the Mets' performance in the standings.)

It will be a good thing if this bailout controversy sparks a re-examination of the public funding for these private sports stadiums. New York taxpayers are forking over hundreds of millions to pay for the new Yankee Stadium and CitiField. Are we getting a large percentage of the profits from these money-making baseball teams? No.

Yes, we're getting tax revenues from the money generated inside the stadiums, but New Yorkers were getting that anyway. So the only benefit here is to the owners, not the taxpayers, unless you count the luxury seats City officials are getting as a perk. I don't think they should be counted, however.

We'll have the latest on the economic crisis, tonight at 11. And our reporting will include the official rollout of President-elect Obama's financial team, and his proposal for a $500 billion stimulus package. (By the way, the back-channel reference to Mr. Obama is PEBO, President Elect Barack Obama).

A fascinating response to PEBO's news conference today. Current Treasury Secretary Henry Paulson praised his nominated replacement, Tim Geithner. But then there was the Republican response - or at least the response by a couple of Republicans. I think it's worth repeating.

The first comes from Republican National Committee spokeswoman Amber Wilkerson. She says that PEBO's "first economic announcement" involves "billions... in new government spending that will come at a burdensome cost to American families and small businesses. The 'cuts and sacrifices' that... Obama... advocates will not be made by his friends in Washington, but rather by job creators facing devastating tax increases across America."

Excuse me? Isn't the current Administration a Republican lot? The hundreds of billions in bailouts are their idea at least in part, no?

And what tax increases? If anything, PEBO has hinted that he may delay wiping out the Bush tax cuts, which benefited people making more than $250,000 a year -- a tiny fraction of the population.

The second "say what?" comes from Joe Mondello, the chair of the New York Republican Committee. He sent a letter to his fellow party members today suggesting that new young voters who voted for Obama are Republicans-in-waiting. He blasted the Democrats for packaging - amazingly well - Obama, and marketing the message using "the latest information technology. If Ford could have been as effective as the Democrats," he writes, "we would all be driving Pintos."

But then Mr. Mondello comes back to say that what the Republicans need is to package their message better - exactly what he criticized the Dems for. To do that, they've going to concentrate on "the power of words and the ability of language to motivate."

Maybe he likes Pintos.

Also at 11, our investigative reporter Jim Hoffer has the story of some local people who went back to school to get their nursing degree. Just one problem -- the school wasn't accredited. (Click here to see a preview)

We'll also have any breaking news of the night, plus Lee Goldberg's AccuWeather forecast and Scott Clark with the night's sports. I hope you can join Liz Cho and me, tonight at 11.

BILL RITTER


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