The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Fine Makes Stock Price Go Up

Aug 4, 2014

The government gave Citigroup a seven billion dollar fine for selling rotten mortgage-backed securities that tanked the economy in 2008. Sounds like a lot of money, right?

Investors know otherwise. The day the fine was announced, Citi’s stock went up by 4%. After all, no one went to jail, even though the bank stole billions of dollars through these scams – much more than the fine. Compare this to the penalty a poor person gets for stealing $1500!

The investors who drove Citigroup’s shares up recognized this fine for what it was: a green light for the banks to keep using any scam they can think of.