This does not pass the smell test, IMHO. Here is a re-post
from prubear forum
boards.prudentbear.com
Just a few, random, rants on the Citi news:
1. Heh. Bank of America only got a 7.5% interest-rate promise
out of Countrywide for their $2 billion (now worth $1
billion), so Citi must be pretty desperate to pay 11%.
2. Citi is the largest U.S. bank by assets, but they have to
go begging overseas for capital infusions? Go figure?
3. Furthermore on point #2 above, my, my, how times have
changed. I wonder what the public reaction would have been,
say, back in November 2001 (two months after 9/11) if Citi
announced that ADIA's Managing Director, Sheikh Ahmed Bin
Zayed Al Nahayan had bought a stake in their bank?
4. Why can't Citi go to the Fed and borrow the funds? Sheesh,
you would think that the Fed (or other actors in the U.S.)
would be happy to lend Citi money at even ONE-HALF the rate
that Abu Dhabi just charged.
5. So, therefore Citi must really, really, be scroomed to do a
deal like this. In addition, the Fed and feds must know it or
they would have done the bailout themselves.
This is NOT good news, bears. I don't care if the DJIA jumps
two hundred points today. If our biggest bank has to go
begging to politically "sensitive" areas of the world for
funds, the situation is far more serious than they are letting
on. |
