Thursday, November 29, 2007

Citibank - proof the "subprime" lending mess is bigger than you think

Unless you missed it, Citibank (actually parent company Citigroup) got a bail-out yesterday from Abu Dhabi, the investment arm of the Saudi government. The Sauds paid $7.5 billion (yes, Billion) for a 5% stake of Citi. As such, they become Citi's biggest shareholder.

Some will see this as Bush's fault, others as Clinton's. Some will see this as a problem with big oil. Others will see this as an attempt by the middle eastern bloc to control the US. Any or all of those may be valid.

I see this as a sigh that the "subprime" lending mess is bigger than you think. It has impacted one of the top two banks in the nation (depending on how you look at it, Citibank is #1 or #2, Bank of America shares the lead with them).

We can no longer blame the subprime mess on irresponsible banks or irresponsible borrowers. I don't believe there is any simple "fix" for the problem and I believe it will affect us all.

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