For a complete list of Beginners articles, see Financial Crisis for Beginners.
You may have seen in the news that the government is thinking about exchanging its “preferred stock” in Citigroup for “common stock.” Here’s one of many articles. Which, if you are at all sensible and have any sense of proportion in your life, should be complete gobbledygook. The first part of this article will try to explain the gobbledygood; advanced readers can skim it. The second part will offer some of the usual commentary.
Banks, like all companies, have balance sheets. On one side they have assets – stuff they own. On the other side they have liabilities – money they owe other people – and equity. Equity can be thought of in two ways. First, it is the money that the initial owners put in to start the business; before you can borrow money from someone else, you usually have to have some money or other assets of your own that you put in. Added to that money are retained earnings – all the profits the company has made but has not paid out to the owners as dividends. Second, equity is what is left over after you pay off all your creditors. If you sold the assets and paid off the liabilities, the rest would go to the company’s owners.
That equity “belongs” to the owners of the company; if it’s a publicly-owned company, those are the shareholders. The market value of the equity is the total amount that people would pay today to own all of that balance sheet equity: it’s the total number of shares times the share price. The market value of equity is generally different from the “book value” (balance sheet value) of equity, because if you own a company, you own not only today’s equity, but also all the profits the company will make in the future. Under certain circumstances the market value of equity can be less than the book value of equity – that’s the case if investors think that the company’s management is destroying value, or that the book value of equity on the balance sheet inflates its true worth.
The complication is that there are different kinds of equity. The way to think about this is to think about the various ways that companies can raise cash from investors. At one extreme there is secured debt: the company goes to a bank, takes out a loan, and pledges some of its assets as collateral. If it doesn’t repay the loan, the bank gets the collateral. Then there is unsecured debt: the company issues a bond, which is just a promise to pay in the future, and the investor pays money for this bond, hoping to be repaid with interest. At the other extreme there are common shares. These give you no rights in particular, except the right to control the company, through the board of directors. Conceptually, the common shareholders own the equity, and benefit from the future profits, but the company has no obligation to give them any of the equity, or to pay out any of the profits as dividends. Then in between debt and common shares there are these things called preferred shares, which come in many flavors. Preferred shares are like debt: they may pay a required dividend, which is like interest on a debt; there may be rules on when they have to be bought back by the company, such as in case of a major transaction. They are also like equity: in case of bankruptcy, preferred shareholders only get paid back only after all the debt holders have been paid back; in some cases, preferred shares can be converted for common shares at a predetermined price, which allows preferred shareholders to benefit if the common stock goes up in value.
In summary, there is a spectrum of instruments through which companies raise money, and these instruments have differing priority in making claims on the company. They also differ in how likely the investor is to be paid back. Secured debt comes first, common shares come last, and everything else comes in between.
Trust me, we’re getting closer to the question I started with.
Ordinarily, you don’t need to debate whether preferred shares should count as debt or equity. However, for banks in particular, there is a concept called capital adequacy. A capital adequacy ratio is the ratio between some measure of capital to total assets. Imagine for a moment that there was only one kind of debt – say, deposits – and one kind of capital – ordinary shares. Say my bank has $100 in assets. As we all know, assets can go up or down in value. If I have $90 in debt, then I have $10 in capital, and my ratio is 10%. This means that my assets could fall in value by up to 10% and I would still be able to pay back my depositors. If, instead, I have $99 in debt, then my ratio is only 1%. If my assets fall by more than 1% in value, I won’t be able to pay back my depositors, I’ll be insolvent, and the FDIC will take me over so it can pay off the deposit guarantees at minimum risk to itself. This is why the capital adequacy ratio matters, especially to bank regulators. What minimum capital ratios should be is a complex topic, most of which I will avoid, but you can see why they matter.
The part I can’t avoid is how the capital – the numerator of the ratio – is calculated. As I said above, there are many different types of capital. Besides common shares and preferred shares, believe it or not, you can count deferred tax assets (credits you gain by losing money in one year, which you can apply against taxes in future years where you make money) as capital. One commonly used measure of capital is called Tier 1 Capital, which includes common shares, preferred shares, and deferred tax assets. A less commonly used measure is Tangible Common Equity (TCE), which includes only common shares. Obviously, TCE will yield a lower percentage than Tier 1.
Which of these measures is better? That’s sort of an arbitrary question. The fact that you change the numbers you type into your spreadsheet doesn’t change the actual health of the bank any. They just measure different things. Each one measures the ability of the bank to withstand losses before its ability to pay off its liabilities starts getting compromised. One difference between the two is whether you count preferred shares as liabilities, which depends on how bad you think it is that preferred shareholders don’t get their money back. Another difference depends on what you think the deferred tax credits are worth in a worst-case scenario. In any case, the skeptics, like Friedman Billings Ramsey, have been insisting since the beginning of the crisis that TCE is the proper measure of bank solvency. And most immediately, Tim Geithner has said that the new bank stress tests will focus on TCE. So if your bank doesn’t have enough TCE, it will fail the stress test, and then . . . who knows what the administration has the stomach to do.
Getting back to the current situation . . . The initial government investments in Citigroup, back in October and November, were in the form of preferred shares. Between the two bailouts, the government put in $45 billion in cash and got $52 billion in preferred stock (the $7 billion difference was the fee for the guarantee on $300 billion of Citi assets). That preferred stock was designed to be much closer to debt than to equity: it pays a dividend (5% or 8%), it cannot be converted into common stock (so it cannot dilute the existing shareholders), it has no voting rights, and it carries a penalty if it isn’t bought back within five years. In fact, it is hard to distinguish from debt, except perhaps for the fact that, if Citi defaults on it (cannot buy the shares back) we don’t need to worry about systemic instability, because the government can absorb the loss. As preferred stock, these bailouts boosted Citi’s Tier 1 capital, but not its TCE.
Because of the newly perceived need for TCE, the bailout plan under discussion is to convert some of the preferred stock into common stock. Citi wouldn’t actually get any new cash from the government, but it would be relieved some of the dividend payments (currently close to $3 billion per year), and of the obligation to buy back the shares in five years. (For the impact on Citi’s capital ratios, see FT Alphaville.) This is a real benefit to the bank’s bottom line, and hence to the common shareholders. At the same time, though, Citi would issue new common shares to the government, diluting the existing common shareholders (meaning that they now own a smaller percentage of the bank than before). In theory, the amount by which the shareholders in aggregate are better off should balance the amount of dilution to the existing shareholders.
The trick is deciding what price to convert the shares at. All of Citi’s common shares today are worth around $12 billion, so if you converted $52 billion of preferred shares into common, the government would suddenly own over 80% of Citi. (In the conversion, you divide the value of the preferred stock you are converting by the price of the common stock, and that yields the number of common shares the government now owns.) The Geithner team is still continuing the Paulson policy of avoiding anything that looks like nationalization, so the talk is that the government ownership will be capped at 40%; that means the government could only convert about $8 billion of its preferred stock. There will probably be some clever manipulation of the numbers to say that the preferred stock is actually worth less than $52 billion, or that it should be converted at a higher price than the current market price of the stock. (This seems like a blatant subsidy to me, since new investors buying large blocks of stock in a public company typically pay less than the current market price.) There is also talk of trying to get some of Citi’s other preferred stock holders to convert as well, because the more they convert, the more common shares, and hence the more the government can have without going over the 40% limit.
I still don’t understand why people care so much about whether the government owns more or less than 50% of the common shares. This just seems like a fig leaf. The more important issue which people can argue about is whether government is controlling Citigroup’s day-to-day operations. (Some say that’s good, some say it’s bad.) According to The New York Times, this is already happening. Alternatively, if you want to minimize government control, the government could tie its own hands; for example, no matter what its percentage ownership, the government’s stock purchase agreement could say that it has the right to appoint a minority of the board of directors but no more than that.
I think the situation we want to avoid is what is going on at AIG, where the government owns 80% of the company but still seems to be negotiating at arm’s length with the company. This is the worst of all worlds, because even though it already bears the vast majority of the losses, and has the power to clean up AIG (by writing down all its assets to their worst-case scenario values and then recapitalizing the firm sufficiently), the government is treating AIG like an independent entity. For example, if the government did a radical cleanup, it’s hard to see how AIG would still be in danager of ratings downgrades – which are the immediate problem it faces. But that story may have to wait for another post.
Update: Changed “private company” to “publicly-owned company” in the 1st line of the 3rd paragraph. Someday I’ll learn to proof-read before posting. Thanks to Manu for catching that.
58 thoughts on “Tangible Common Equity for Beginners”
I’d like very much to see a post on AIG. In particular, who are the counter-parties who would have been hurt by an AIG failure?
I mean, an insurance company? What possible business does the Fed have bailing an insurance company?
Thank you for the clear exposition, Dr. Kwak.
Of course, if the government only converts $8 billion of its preferred, the effect on TCE would be minimal, thus defeating the purpose of the exercise. They almost have to convert at a ridiculous price, thus subsidizing the common shareholders.
This appears to be the Plan. It is beginning to look like AIG represents the future for several of our largest financial firms.
Welcome to 21st century capitalism.
You’re kidding, right? Shares do not count as liabilities? What kind of backwards system is that?
At any given moment, common shares are “worth” what a speculative market imagines they are worth. That does not seem like a solid basis for determining financial viability.
OK, found another definition: “A measure of financial strength, the Tangible Common Equity (TCE) ratio shows what owners of ordinary shares would receive if a company was liquidated.”
Great writeup. One question: in the first sentence of the third paragraph, should “private” actually be “public”?
Thank you for the extremely easy to understand and clear explanation.
It seems to me that between the first bailout and today the government decided that TCE is more important and then started acting upon it. I really don’t see how this would help anyone.
What would the impact of a conversion be on the bank’s ability to raise new equity from private sources. Would the constant overhang of the government’s unconverted preferred stock discourage other investors afraid of future dilution? It seems to me that all this is just re-arranging things to avoid using the word ‘nationalization’. In effect the bank cannot raise new equity or take any substantial action without Treasury’s say so. So what’s the difference?
If the government converts to common and the stock price continues to fall will we be just treading water? That is, how does TCE differ from market cap? And how is trading guaranteed dividends and debt seniority for common stock anything more than a straightforward gift?
so…my tax dollars are equity…wheres my shares?
I don’t recall appointing the Fed as my custodian.
I am still having trouble understanding how $52 billion in preferred shares only buys 80% of the company when its common equity is only worth $12 billion. I’m probably missing something obvious, but would somebody please explain it to me?
James, great article. It should perhaps be pointed out that the USG does not have conversion rights from preferred to common for at least the first 20B batch of pref that they own (see filing below).
Of course, Citi would nevertheless be ecstatically happy to allow conversion, preferrably at a price that would be lousy for the taxpayer.
USG does hold a small batch of warrants with a horrible (for the taxpayer) exercise price.
FROM CITIGROUP 8-K filing:
On December 31, 2008, Citigroup Inc. (“Citigroup”), as part of the
previously announced agreement with the U.S. Treasury, the Federal
Reserve Board and the Federal Deposit Insurance Corporation, signed an
agreement to issue to the U.S. Treasury $20 billion of its perpetual
preferred stock and a warrant to purchase approximately 188.5 million
shares of common stock at a strike price of $10.61. The transaction
settled on December 31, 2008.
Nathan, it is because the conversion would be by issuing new shares. 52/(12+52) is about 80%, assuming USG pays current market rate for the shares.
But don’t forget that the operation basically amounts to a huge $52B debt forgiveness for Citi (there is no way the USG shares will be worth $52B after the conversion, not for a long time, perhaps never, for certain someone will find a way to socialize the loss permanently).
“Besides common shares and preferred shares, believe it or not, you can count deferred tax assets (credits you gain by losing money in one year, which you can apply against taxes in future years where you make money) as capital”
Are you sure this is right? I would have thought that the question is whether or not deferred tax assets are deducted from capital otherwise measured (e.g. deducted from Tier I regulatory capital). Assets of any type are not “part” of the capital structure per se, are they?
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So, this focus on TCE is the same as what in Europe and the UK we call Core Tier 1 (Basically common stock and retained profits), right? And the citigroup deal is the same as RBS… “improving the quality of bank capital” as the official language puts it.
AIG’s $60 billion 4th quarter loss is truly laughable. The US government looks moronic: 80% stock ownership and a written obligation to cover loses. Apparently the MENSA members directing the TARP people don’t know what a credit default swap is.
Watching Pandit tell congress he didn’t forsee a need for further bailout money for Citibank was also humorous. Strangely, the guy who helps old ladies do their taxes at my community library has a better grasp of Citibank finances that its own CEO.
People (including me) are getting hung up on whether the government converts the $52BN preferred into 40% or 80% because the 40% ownership that the government could take and didn’t take is money stolen from taxpayers for no good reason. As long as there are any equity value left in the Tier 1 structure, the government should get all of it instead of only 40%, after having done so much to prop up an institution that would have surely failed many months ago.
More importantly, and I hope you read this, there is no way you can get other preferred holders to convert. They, such as Abu Dhabi and Singapore will get to free ride because then they would be ahead of the government in the priority and they would be getting what value is left in the Tier 1 equity structure while the government get completely wiped out in the common equity layer.
I’m okay with the government subsidising the to make the senior bonds whole because not doing so might cause systemic tremor. But I’m not okay with the government subsidising other equity investors.
One interesting problem with the government involvements in Citigroup is related to banks that Citi owns outside the US; in specific Banamex in Mexico.
Banamex is a unit of Citi that has performed quite well (it provided c. $800 million in profits in 2008), so keeping it must be important to the well being and future of Citi.
The problem is that under Mexican regulation, banks that operate in Mexico cannot be owned by foreign governments. I believe this is a reasonable rule, and probably one that is also present in countries around the world.
It will be interesting to see if these type of problems arise in the discussions and analysis on how the US government helps banks.
This is a non-issue drummed up by dumb journalists such as those from NY Times. It can be taken care of by having a divestiture requirement within a set period of time post nationalization. Standard M&A routines.
The US government has already said what the conversion price will be. There will be a “conversion price set at a modest discount from the prevailing level of the institution’s stock price up to February 9th, 2009.”
The price of Citi stock, for example on 9 february was $3.95, so after making a modest 5% deduction we get a price around $3,75, or roughly 67% higher than the current market price.
Effectively, the Treasury is giving Citi a very deep in the money put with no time limit on exercise for no premium.
This is consistent with gneral policy, which is to seek to push up the value of the company’s equity by giving taxpayer’s money in one form or another.
The other action intended is providing subsidised loans to private investors to buy toxic assets in the hope this will drive up the price and reduce bank losses.
Whether the taxpayers interests are being protected as well as the interests of the shareholders is not clear.
Assume that AIG is is functionally bankrupt, ie liabilities exceed assets. When AIG announces an estimated $60 billion loss, the taxpayer has absorbed the entire amount. Because there is essentially no common equity, the government’s preferred is the next in line. Imagine the following scenario; AIG goes into liquidation, assets are sold, debt is paid 80% of par, and taxpayers get nothing. NOTHING. $150+ billion down a black hole. Debt needs to be put in a risk position for any future TARP-like funds. Until bond holders come to the table, the government should not provide ANY additional funds.
For all future government bailouts, I propose a new acronym, SLUDGE (Senior-in-Liquidation Unprescidented Depression-avoidance Government Equity). SLUDGE funds will be the first in line in any liquidation, thus SENIOR to all liabilities. For all other accounting measures, it will be treated as ‘TCE’ equity. Existing debt will be subordinated, by constitutional amendment if necessary.
I would also agree to the acronym SLURRY if the general terms are the same.
To David Blake,
That’s what I thought, until I saw the rumblings about the government merely getting 40% for its $45BN preferred.
Based on the terms of the 2/9/09 Geitner’s “Plan to have a Plan”, $45BN preferred would be exchanged into 65% equity stake.
50% ownership by the USG would make it difficult for Citi to operate in foreign markets and afterall Citi is really a globally systemic bank not just a US systemic bank. Would the government of Mexico want to deal with a majority owned USG bank? Probably not and that then puts Citi’s current revenue engine (Banamex)in jeopardy. The 50% mark is also a potential cross default trigger for any of Citi’s debt because of ‘change in control’ provisions that are likely in some/all of its loan agreeements.
So? We’ve had a CDS trigger in FNM and FRE already. As long as bonds are made whole, the triggering of CDS is just red herring.
AIG was bad enough but at least the government got an 80% stake. And what was so sacred about going above 50% anyway?
Re: the Banamex issue, as I said above, it can be dealt with by a simple routine divestiture requirement with a timeframe defined.
This was a great explanation of the various capital ratios.
But one big question is when will we see calculations for BofA that includes Merrill Lynch data (since the data on the web so far only goes through Dec 31 2008, before the sale was finalized)?
“Someday I’ll learn to proof-read before posting.”
I don’t see why you should be apologizing when you’re giving away your insight and expertise for free.
I think most of your readers are extremely grateful for what you and Simon are doing, typos and all.
1. Nationalize the Banks. NO NEED TO DO THIS.
2. Bad Bank, print Trillions to buy toxic assets at the prices set my Chase, etc. This ignites inflation, bad idea!
3. Four Banks today: Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo, and some others as well.
4. Create separate bad banks for each of these four institutions, and finance them by having the government assume an amount of each good bank’s corporate debt equal to the value of the troubled assets put into the bad banks.
5. Each CEO will be given one chance to sell any assets to a new bad bank owned entirely by the government. Assets will be conveyed at year-end, audited book values, not at some inflated price.
6. Right now, those assets are illiquid and depressed, but the government can hold onto these assets until they regain value, with complete transparency.
7. Government pays for these assets by not printing new cash, but by taking an equal dollar amount of each bank’s liabilities, notes, bonds and other obligations. Government, not the banks, chooses which liabilities it would take responsibility for, notes and bonds with maturities of 3 to 10 years. Government pays down these liabilities thorough the cash flow that will be generated from the troubled assets themselves
8. Government hires professional money managers to oversee the liquidation. (Note of Disclosure, this is what my firm does best, getting the most money I can from the folks I work for, in this case, You, and the American People, Mr. President.)
9. The Banks retain strong assets bases, no longer have toxic securities, and will start to extend credit again.
10. Insurance companies benefit exchange weak debt to securities guaranteed by the Treasury.
11. The program must be mandatory. Government should also get stock warrants, the ability to purchase stock in the future at a guaranteed price.
12. These banks become the four best capitalized and cleanest banks in the world. Government could sell the warrants to private parties, another bonus for taxpayers. Private investors exercise the warrants, infusing even more common equity capital into the banks.
13. The Four Banks will have a clean balance sheet and the best capital ratios in the world, and start making new loans.
14. ALL NEW MORTAGE LOANS WILL BE MADE AT NO HIGHER THAN 8% INTEREST, AND WILL BE MADE 15 OR 30 YEAR FIXED, WITH THE FIRST PAYMENT DIVIDED EQUALLY BETWEEN PRINCIPAL AND INTEREST.
15. After the Recovery, Mr. President, you will have the political capital to convert Federal Reserve Notes to a New United States Currency, backed 33% in silver and gold, in exactly the following manner
The U.S. Treasury WILL ARRANGE FOR
1. Loans in freshly created U.S. Paper Currency to Banks to bring their cash reserves up to 100%. All currency labeled United States Notes will be recalled and burned.
2. Banks would pay 3% interest to the Treasury on these loans.
3. Fed borrows from the Treasury the new currency to bring their cash reserves up to 100% to cover their demand deposits plus all government funds against which checks are being drawn by the government. The amount of U.S. Securities held by the Federal Reserve would be credited against these borrowings, canceling an equal amount.
4. 15% flat tax ACROSS THE BOARD, CORPORATE AND INDIVIDUAL.
Thank you for the excellent explanation of the “gobbledygook”. It must be borne in mind just HOW ARBITRARY it all is..
Wall st is “afraid” of nationalization (the N word) but is benefitting from JURY-RIGGED GERRYMANDERED numbers in the ENTIRE BAILOUT.
*How much bailout: arbitrary
*Converting Preferred to Common: forced (not per agreement)
*What price, and what % control: forced arbitrary calc.
Everything is being “decided” between Government and Citi to CIti’s benefit. and THIS is NOT “nationalization”…..wall st. crooks! just so the elites can say we adhered to “market” discipline!
There is one another thing which lends credence to the view that these semantic quibbles may be irrelavant. The Modigliani Miller theorem claims that (under certain conditions) it does not matter if the firm’s capital is raised by issuing stock or selling debt, or what the firm’s dividend policy is. All these debates about the exact nature of government stakes also assume (or hope) that the share prices will rebound once normalcy is restored to the markets, so that government can exit without too much cost to the tax payer. So the issue at hand is to get the normalcy restored by getting confidence back in the banks and thereby stem the decline in asset values, and not debating capital structure!
thanks for information…
I’m trying to understand how the dilution of common shares work.
Let’s say for example I own 5000 shares of “C”, then what would happen to the 5000 shares after the government converts to common shares?
Would it mean that I would loose a lot of quantity of shares or the price in each share is a lot lower?
52/64=81, there must be another 1% in another form.
I still want to know if privately held preferred shares are going to be mandatorily converted. If so at what price? Also what about the special Cap trust preferred? Will they be converted mandatorily. Will they still receive a dividen?
Thanks. It explains the Fed/Citi dance to convert pfd to common.
But this should do absolutely nothing to sooth a bank CEO as he watches daily bear raids on his share price.
I really appreciate everything you do through this site. You’re always concise and current, I thought I would let you know I read your blog daily. Thanks again
Excellent overview. I enjoyed reading it very much.
One issue is the banks “trust preferred” securities.
While the street facing securities aren’t actually debt, they are backed by junior subordinated (the lowest of the low in the DEBT portion of the capital structure) bonds. And they have legal rights against these bonds (i.e. rights of subrogation, etc.)
These trust preferreds are trading at a slight premium to the plain vanilla preferreds. However, given the legal rights they have, do you, or anyone, have any thoughts on how they will be / should be handled?
I believe these instruments will get back par $25 in the end, but I welcome the debate.
Hi! I have not even made through the entire article however, your explanation and ($100) example of capital adequacy and tangible common equity have proven most enlightening. I got crossed up with the $100 dollar example and initially thought that the $100 in assets consisted of the total debt plus the capital, which in the example was also equal to $100. Clearly this is not the case as the $100 in assets consist of “commmon shares” valued at $100; and the outstanding debt liabilities are equal to$ $90 and $99 leaving a balance of capital of $10 and $1. It took a couple of read throughs to get this. As the article discusses differing ways for accounting for assets (i.e. preferred shares may be viewed as assets or liabilities), I thought the $100 in assets was actually comprised of the ($90 and $99) “debts” plus the ($1 and $10 in) capital referred to in the exammple. (I don’t know if more clarity can be provided here.) In any event, the article is most enlightening thus far. Thank you!
Hi! The article was so revealing that I had to compliment you before even completing my read of it!(See my previous comment.) Your explanation and ($100) example of capital adequacy and tangible common equity have proven most enlightening. I got crossed up with the $100 dollar example, and initially thought that the $100 in assets consisted of the ‘total debt plus the capital’, which in the example was also equal to $100. Clearly this is not the case as the $100 in assets consist solely of ‘commmon shares valued at $100’. It took a few read throughs to get this. As the article (early on) presents the challenge distinguishing between debt and equity (by noting that “preferred shares are like debts”, but are also “like equity”) I thought the $100 in assets (in the example) actually consisted comprised of the ($90 and $99) “debts” plus the ($1 and $10 in) capital referred to in the exammple. (Whether more clarity can be provided here may be debatable. Perhaps I was reading to fast.) I do want to let you know that the article has been enjoyably intresting and illuminating on the subject discussed. Thank you!
Hi! The article was so revealing that I had to compliment you before even completing my read of it! (See my previous comment.) Your explanation and ($100) example of capital adequacy and tangible common equity have proven most enlightening. I got crossed up with the $100 dollar example, and initially thought that the $100 in assets consisted of the ‘total debt plus the capital’, which in the example was also equal to $100. Clearly this is not the case as the $100 in assets consist solely of ‘commmon shares valued at $100′. It took a few read throughs to get this. As the article (early on) presents the challenge distinguishing between debt and equity (by noting that “preferred shares are like debts”, but are also “like equity”) I thought the $100 in assets (in the example) actually consisted of the ($90 and $99) “debts” plus the ($1 and $10 in) capital referred to in the exammple. (Whether more clarity can be provided here may be debatable. Perhaps I was reading to fast.) I do want to let you know that the article has been enjoyably intresting and illuminating on the subject discussed. Thank you!
The concept of TCE is counterintuitive. If all you have to do to make a Bank solvent is issue more shares, then it is a receipt for devaluation. I ask myself what good does the added stock do. The Bank can not spend it. Debt vs assets (excluding stock) is a much better way. I just don’t see TCE as an asset. In fact when a Co. buys back shares and the shares for one reason or another do not go up appreciably, then the TCE goes down? Ridiculous.
Fabulous article. So is Citi a good long term buy at $3?
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