If anyone has any doubt…and they shouldn’t…that the subprime mortgage debacle (sort of running out of ways to describe this…any suggestions?) is having an enormous impact on not only the world of real estate, but the world in general, they need to consider this sobering fact:
Citigroup today posted a $9.83 billion dollar loss for the first quarter, it’s first such quarterly loss since 1998 when the current configuration of the banking empire was created.
To raise money, Citigroup has had to hold out the tin cup to foreign investors, including Arab enterprises. So much for U.S. national security post 9/11.
Citigroup has raised 14 and a half BILLION dollars from the Kuwait Investment Authority and a Saudi Arabian prince who has long been an investor in the bank. Apparently, the house of Saud is the only house around without a mortgage problem.
A hefty amount of the raised money comes from the government of Singapore.
So let’s see–that means two Middle Eastern countries, including Saudi Arabia which contributed most of the 9/11 hijackers–will have access to all sorts of personal banking information of each and every American who does business with Citibank–social security numbers, mortgage histories, loans, credit arrangements, addresses, phone numbers, places of residence and business, number of people in your family, your entire spending history if you are a Citibank customer.
But, do remember to take your shoes off at the airport lest you encourage terrorism!
Citibank is the nation’s largest bank, by the way.
The bank is saying its capital base has been depleted by the beating it has taken on subprime mortgages.
But, there is more to this story, of course.
Citigroup also says consumers are really falling behind regular credit—credit cards, loans, that sort of thing.
That, too, is directly related to the housing mess because fewer and fewer people are able to use their homes to borrow against since the value of their homes has more than likely declined.
I don’t like making financial predictions, but, here goes: What began as a mortgage issue will soon become the worst banking fiasco in recent memory as more and more major and not so major banks post losses.
It has already started; it has only just begun. (Yes, I like that Carpenters song, too!)
subprime mortgage, real estate, Citigroup, security, 9/11, Kuwait, loans, credit, subprime
Article Author:
Charles FeldmanCharles has written 149 articles for us.
Visit Charles's Website: http://www.thefeldmanblog.com
Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog.
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We don’t need the banks falling again. Hopefully the losses stop, but I tend to agree with you.
Someone told me the other day that we were going to be in a depression in 6 months, I was like yea right fool
But man, reading this… it could be possible.
I dont think we are in a crisis YET… but i think the worst thing that can happen is the government try to bail out all these bad mortgages people need to learn you have to pay the consequences for your descisions… while i feel mortgage companies are partly at blame for putting so much risk out there and not telling the whole truth to get people in homes… but ultimately it is your responsibility to read the fine print.
MadMoney – I’m guessing that you don’t live here in the US from your comments. I think you and the President are the only people who might actually think we’re not in a crisis. YIKES!
I think it’s a very bad crisis – maybe this is the factor that contributed to the silent recession in the country?
I’m a realtor in Moreno Valley. Bank-owned homes dominate the new listings here. Even with the prices set at a 21% discount to the rest of the market, nothing’s selling. Trying to get anyone – from Mayor to Governor to President – to do anything is almost impossible. Here in California, the Governor woruld rather stump for relaxing term limits than try to help solve this problem. It seems the only way out is to help honest, hard-working folks buy these things (instead of vulture investors).
Thanks for the Post.