BIGGEST BANK/ BIGGEST AUTO MFGR. NOW JUST A MEMORY AS DOW COMPONENTS-NOW UNFAIR COMPETITORS WITH OTHER BANKS AND CAR MANUFACTURERS

Then you thought of the DJA, it used to be that it represented the most prestigious names in American industry. The best, the biggest, the companies that were leaders in the world and in the USA in their industries.

Now both GENERAL MOTORS AND CITIGROUP are no longer the biggest (and best) of their class and will be removed from the DJA. It is ironic as these American icons move towards listing obscurity as the government takes then over (for all practical purposes) and destroys the value of their long suffering stockholders.

It can be said that now both of these icons will be forced to pander to the government mandates that have no relation to being operated for a profit, although they theoretically will pay back the loans ( yeah, right, another government promise).

CITI BANK has already shown how it supported the ability of bankruptcy judges to circumvent the law and reduce the principal balances on secured mortgages, and thus became a mouthpiece for its government saviors. never mind the bad precedent set by showing that the rule of law can be circumvented and simply set aside by a judge.

Why would a future secured lender consider it safe to lend as a secured creditor, if his lien can simply be set aside by a judge?

You got it, the secured lenders will now demand more collateral, more down payments, etc., or a government guaranteed loan in order to provide mortgage financing.

So how is this policy going to help with increasing lending?

Thus CITY BANK will no longer be a participant in the FREE economy, but simply mouthing government mandates irrespective of the profit that is expected for businesses to generate. Worse yet, as a government supported entity, it will be competing with other banks unfairly, since they do not have access to the unlimited resources of the government (taxpayer) funds.

GENERAL MOTORS likewise, has now become a mouthpiece of the "green" politically correct administration mandates of what type of cars to build as mandated, rather than build cars that people want.

Also, this government supported catastrophe will now be unfairly competing with FORD MOTOR for instance which has not used any taxpayer funds. GM has started offering no interest loans for its cars, it is rebating phenomenal sums to buyers of some of its vehicles directly competing with un-supported companies who have to fight the government supported ones.

Thus GM is using taxpayer funds to unfairly compete with other companies using YOUR money to do so, virtually guaranteeing continued losses due to the no interest loans and rebates. Also, there is virtually no change in the high hourly labor costs ongoing with GM which was the whole reason for the planned reorganization.

General Motors Corp. and Citigroup Inc. were removed from the Dow Jones Industrial Average, replaced by Cisco Systems Inc. and Travelers Cos., after the first global recession in 70 years crippled their earnings and sent their shares down more than 90 percent.

GM, which filed for bankruptcy protection today, and Citigroup, which was found by the Federal Reserve to require $93 billion in additional common equity at the end of 2008, became the first companies since American International Group Inc. in September to leave the 30-stock average. GM’s ouster was expected after John Prestbo, Dow Jones Indexes editor and executive director, said in early May the automaker would come out in the event of a bankruptcy filing.

“The parlous state of GM has left us with no choice but to remove it from the Dow,” said Robert Thomson, managing editor of the Wall Street Journal, in a statement announcing the change. The newspaper’s editors decide the makeup of the average. News Corp., the media company headed by Rupert Murdoch, has been its publisher since acquiring Dow Jones & Co. in December 2007.

Citigroup has traded below $5 since mid-January and is in the process of converting preferred stock into common shares, giving the U.S. government a 34 percent stake.

“We were reluctant to remove Citigroup at the height of the financial frenzy, but it is clear that the bank is in the midst of a substantial restructuring which will see the government with a large and ongoing stake,” Thomson said.

Considered Again

Thomson said Citigroup may be considered for the index again after it has “refashioned itself,” according to the statement.

Kraft Foods Inc. was named to replace AIG in the average on Sept. 18, the day after the nation’s biggest insurer was taken over by the U.S. government to avert its collapse.

GM, which had its last profitable year in 2004, was the worst-performing company in the average last year, losing 87 percent, and 77 percent this year through May 29. Its shares fell below $1 on May 29, putting them below the minimum normally required to trade on the New York Stock Exchange. GM entered the 113-year-old index in 1915, replacing preferred shares of U.S. Rubber.

GM, the fourth-biggest bankruptcy in U.S. history after Lehman Brothers Holdings Inc. and Washington Mutual Inc. in September and WorldCom Inc. in 2002, had been the lowest-priced company in the average for most of the past year. Citigroup closed at lower prices than GM on 27 days this year, mostly in March. The Dow average is price-weighted, meaning the lower a company’s share price, the less influence it has.

Global Dow

GM and Citigroup were removed from News Corp.’s 150-stock Global Dow in April, less than five months after that index was introduced.

“The issues facing GM have been widely known and disseminated for some time,” said Jonathan Armitage, head of U.S. large-cap equities at the American unit of Schroders, the U.K.’s largest independent money manager. “It was less a question of if but of when” this day would come.

The Dow average was devised in 1896 by Charles H. Dow, co- founder of Wall Street Journal publisher Dow Jones & Co. Originally containing 12 stocks, it expanded to 20 companies in 1916 and to 30 in 1928.

There are no rules for inclusion in the gauge, according to the Dow Jones Web site. Usually, a stock is added only “if it has an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors and accurately represents the sectors covered by the average,” the Web site says.

Yes, those guidelines appear accurate. Both of these companies no longer have the excellent reputation, can demonstrate sustained growth or have a large number of investors, since their original hundreds of thousands of investors were wiped out by the government actions.

Nice, our government is now destroying the leading businesses in America, while using YOUR funds to do so. Then, it is bringing these businesses back like the ZOMBIES in a B movie to compete with REAL businesses.