Re: Bailed Out Citigroup Stimulates French Economy By Purchasing $50 Million Corporate Jet

[David Farber <dave () farber net>]

Begin forwarded message:

From: Jonathan Stade <jstade () mtroyal ca>
Date: January 27, 2009 1:22:41 AM EST
To: dave () farber net
Subject: Re: [IP] Re:   Bailed Out Citigroup Stimulates French Economy  
By Purchasing $50 Million Corporate Jet

David Farber wrote:
> From: Lauren Weinstein <lauren () vortex com>
> > http://consumerist.com/5139484/bailed-out-citigroup-stimulates-french-economy-by-purchasing-50-million-corporate-jet
> Dave, once we've moved the current batch of residents out of Gitmo, I
> have an idea for how we can use that expensive prison facility at
> Guantanamo to make a group of well-heeled Wall Street suits seriously
> uncomfortable.
>
> But no torture/enhanced interrogations!  After all, these financial
> wizards only helped to wreck the global enconomy while lining their
> own pockets and taking taxpayer handouts.  Well, OK, maybe just a few
> stress positions to keep them "on their toes ..."
>
> Bastards.

If one clicks through to the original NYPost article (http://www.nypost.com/seven/01262009/news/nationalnews/just_plane_despicable_152033.htm 
), which has a slightly higher standard of journalism applied to the  
writing, one finds a couple important facts which are skipped in the  
Consumerist posting:

a) the decision to purchase was two years ago, "Citigroup decided to  
get its new wings two years ago, when the financial-services giant was  
flush with cash, but it still intends to take possession of the jet  
this year despite its current woes, the source said."

b) Citiflight is at the same time trying to sell off two of its Falcon  
900EXs, valued at approximately $27M each.

If two years ago means 2007, then the purchase price was likely not  
$50M, probably more around $41M (cf. http://www.flightglobal.com/blogs/flight-international/2007/05/onboard-the-7x.html) 
, and perhaps even lower if the commitment was 2006.

Given that cancelling a contract of this size usually will involve  
fines for default, it certainly isn't clear that taking possession is  
a bad financial decision. In a slightly perverse argument, selling two  
planes for $54M while buying one for $41M, thus avoiding a big  
cancellation fee and reducing maintenance costs from two older planes  
to one new plane could actually be called a cost-cutting measure.

I know the Gitmo comments were in jest, but... too soon for me to find  
humour in it.

~Jonathan Stade




-------------------------------------------
Archives: https://www.listbox.com/member/archive/247/=now
RSS Feed: https://www.listbox.com/member/archive/rss/247/
Powered by Listbox: http://www.listbox.com