Who's the biggest banker in the world? At one point, arguably, you were. The U.S. Taxpayer.
When the Treasury Department bailed out Wall Street in 2008, American taxpayers became involuntary investors in many of the biggest names in banking: Goldman Sachs (NYSE: GS ) . JPMorgan Chase (NYSE: JPM ) . American Express (NYSE: AXP ) .
No sooner did they get the money, though, than these banks promptly began clamoring to pay it back, with interest. Anything to get the Federal watchdogs to unclench their teeth from the bankers' pinstripe bottoms. Seems the banks didn't necessarily want taxpayer support (at least, not with strings attached), and already.
Your wish, our command -- good riddance
And it looks like one more banker is about to get its wish. Following in the footsteps of its better-balance sheeted brethren, Citigroup paid, back in December, $20 billion out of the $45 billion in TARP funds it had received. As for the balance, which Treasury had converted into an equity stake in the bank, the U.S. Treasury began selling that off this year. So far, one-fifth of our Citigroup (NYSE: C ) stake has been liquidated, with more sales in the offing:
Over the course of 23 trading days in April and May, the Treasury liquidated Citigroup shares. Selling at an average rate of 65 million per day, it raised an estimated $6.2 billion in cash. That's a 27% profit compared to the government's initial buy-in price of last September -- not a bad return, considering that the S&P 500 as a whole is basically flat over the same time period.
Encouraged by its success, Treasury has already authorized Morgan Stanley (NYSE: MS ) to facilitate the sale of another block of 1.5 billion Citi shares. If they maintain this sales pace, taxpayers could finally be done with this stock in just a little more than four months' time.
What's it mean to you, the investor? Downwards pressure from the government's fire sale may be contributing to Citi shares' 16% slide over the past month. If you're looking for a pop in Citi stock, you might want to wait till the sales run their course. On the other hand, there's nothing like having a "motivated seller" on the other side of your trade to help you snag an attractive price. Perversely, the best time to buy Citigroup stock might be right smack-dab in the middle of the Treasury's selling spree.
At least, that's the way I see it. But what do you think? Take the Foolish Rorschach test, and give us your read on the chart up above, down below.