Tuesday, November 27, 2007

Petro Dollars Bail Out The CITI

And here is more news from Dubai Investments Inc. Petro-Dollars from the middle east bail out the sub prime victims of U.S. excess.No not the mortgage holders or home owners, but the greedy capitalists. They can always expect to get bailed out if not by the Federal Reserve than the Oil Reserves in the Middle East.

And who is going raise the specter of American Security interests over this Wall Street take over? Why no-one, well perhaps Lou Dobbs. This is globalization in action. Just what it's proponents predicted, but not as they expected.

Citigroup Inc., the biggest U.S. bank by assets, will receive a $7.5 billion cash infusion from Abu Dhabi to replenish capital after record mortgage losses.

Citigroup rose 5.7 percent in German trading after acting Chief Executive Officer Win Bischoff said in a statement late yesterday that Abu Dhabi Investment Authority will help ``strengthen our capital base.''

Abu Dhabi will buy securities that convert into stock and yield 11 percent a year, almost double the interest Citigroup offers bond investors, underscoring the New York-based company's need for cash. Citigroup's fourth-quarter profit will be reduced by as much as $7 billion because of losses from subprime mortgages, which led to the departure of CEO Charles O. ``Chuck'' Prince III and a 45 percent slump in the company's stock.

``Clearly, Citi has a problem with capital adequacy after the subprime crisis,'' said Giyas Gokkent, head of research at National Bank of Abu Dhabi PJSC, Abu Dhabi's biggest bank by market value. ``ADIA has seen an opportunity to get cheaply into a blue-chip stock.''

With the purchase of a 4.9 percent stake, Abu Dhabi, the largest emirate in the United Arab Emirates, would rank as Citigroup's largest shareholder ahead of Los Angeles-based Capital Group Cos. and Saudi billionaire Prince Alwaleed bin Talal, data compiled by Bloomberg show.

Depleted Capital

The investment follows purchases by U.A.E. fund Dubai International Capital LLC in companies including London-based HSBC Holdings Plc, Europe's biggest bank by market value, and New York-based hedge fund Och-Ziff Capital Management LLC. In Abu Dhabi, state-backed Mubadala Development Co. agreed to buy 7.5 percent of Washington-based buyout firm Carlyle Group. ADIA also owns a stake in Leon Black's New York-based buyout firm Apollo Management LP.

While Joe and Jane Consumer in America get no relief, which only will mean even more American retailers will go crash this shopping season as they desperately drop their prices as fast as the U.S. dollar's decline. It is a season full of desperation.

Holiday shoppers spending carefully
Deep discounts lure, but analysts wary

Discounted sweaters, laptops and personal GPS navigation systems drew large crowds during the Thanksgiving shopping weekend, according to several early surveys, but customers also appeared to temper their spending amid concerns over the economy.

Despite positive signs over the weekend, analysts cautioned yesterday that retailers must keep enticing customers with bargains to sustain momentum through the end of the year. Several retailers and economists say this holiday shopping season could be the worst in five years, in part because of the slumping housing market and higher energy costs.

Retail Desperation on Display in Early Hours

Upbeat holiday shopper traffic on Black Friday may prove short lived

Wall St little changed as investors track retail sales

The lackluster start of trading followed a market rally Friday as big retailers unveiled hefty discounts to lure shoppers into the nation's malls.

"So long as consumer spending keeps rising, the economy will stay out of recession," said Dick Green, an analyst at Briefing.com.

Other analysts said retail sales so far appeared to have been relatively robust over the weekend despite a housing market slump and a related credit crunch.

Banking giant Citigroup is meanwhile planning its second round of "large-scale" layoffs in less than 12 months, according to a report by the CNBC business television channel which cited people with knowledge of the matter.


Bank Smack Down


U.S. Economy Entering Twilight Zone

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