If anyone has any doubt…and they shouldn’t…that the [tag]subprime mortgage[/tag] debacle (sort of running out of ways to describe this…any suggestions?) is having an enormous impact on not only the world of [tag]real estate[/tag], but the world in general, they need to consider this sobering fact:[tag]Citigroup[/tag] 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 [tag]security[/tag] post [tag]9/11[/tag].
Citigroup has raised 14 and a half BILLION dollars from the [tag]Kuwait[/tag] 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, [tag]loans[/tag], [tag]credit[/tag] 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 [tag]subprime[/tag] 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!)