Saturday, November 28, 2009

Memory Hole, Citigroup Edition

File this one under nobody could have anticipated:
DECEMBER 16, 2008

Citi Voices Upbeat View on Dubai

As Debt-Fueled Growth Weighs on City-State, Bank Raised $8 Billion in Year

MANAMA, Bahrain -- With questions about Dubai's looming debt obligations swirling, Citigroup Inc. said it had raised $8 billion for the Persian Gulf city-state over the course of the past year and still had a positive outlook on its economy.


Analysts and bankers in Dubai question where that cash is going to come from next year, especially since two pillars of Dubai's economy -- real estate and banking -- are feeling the pinch. The statement from Citibank did little to address those concerns.


A Citigroup official said the $8 billion in loan financing for Dubai had been syndicated from other sources, but that an undisclosed amount had come from the bank's own balance sheet. Mr. Bischoff, who visited Dubai in November, said at the time that the bank had "lots of billions" of dollars of exposure to Dubai debt.

In November 2007, the Abu Dhabi Investment Authority, the sovereign-wealth fund owned by the capital of the United Arab Emirates, injected $7.6 billion into Citigroup. Earlier this fall, the U.S. government became Citigroup's largest shareholder, after the bank took part in a U.S. Treasury Department bailout.

Well isn’t that just peachy.

Meanwhile, our business press elites keep telling us that they are shocked SHOCKED to learn of Dubai’s debt woes.

No, really!

Maybe I’m remembering it wrong, but I thought the point of the bailout was so that companies like Citigroup would free up credit for American businesses and families. Not, you know, send it to bad debt risks in freaking Dubai.

And then we have this:

Nov. 26 (Bloomberg) -- Citigroup Inc., the bank owned 34 percent by the U.S. government, said it didn’t offer Brazil a stake in the company amid the credit crisis.

Brazilian Energy and Mines Minister Edison Lobao had said Nov. 24 that the New York-based company offered the stake as it sought to raise money -- comments that Finance Minister Guido Mantega called untrue later that day. Yesterday, newspaper O Estado de S. Paulo reported that Gustavo Marin, Citigroup’s Latin America president, offered the country a 50 percent stake in the bank’s Brazilian unit.

Is it just me or does it seem like these folks operate in their own little world where anything goes? No rules, no morals, just do whatever they please, answerable to no one?

I used to be worried about what would happen if banking behemoths like Citigroup failed. Now I'm worried about what happens whey they don't.