Saudi Arabia and CitiBank

[Trassin]

I was debating someone about Ron Paul's policy towards the middle east last night and the idea of pulling our support for middle east countries, Saudi Arabia in particular. Her counter argument was that the Saudis could do serious damage to our economy via their control of CitiBank.

Is there any truth to this and if so what is the solution?

What should I be reading to better equate myself with this argument and counter points to it?

[mikilu]

Saudi's control via Citibank is IRRELEVANT at this point in time.

Why ? If you or your friend had been paying attention to the Wall Street Journal over the weekend and read up on the financial blogs, you would know the Citibank is in BIG trouble.

BIG as in being close to INSOLVENT trouble.

Its quite possible in the near future that Citibank will need to get bailed out AGAIN (they were bailed out in the 90s by a Saudi Prince, and hence their control of it) either by the gov or by some other parties.

Dont believe me ? Google MLEC and read the blog entries about the new master conduit being setup by Bernake and Paulson. Look at what Citibank's share price has done since the MLEC story was uncovered over the weekend.

Good article at

http://accruedint.blogspot.com/2007/10/with-our-combined-strength-episode-two.html

But the SIV issue is complex and may take a bit before you get your head wrapped around it.

And it is NOT just Citibank, the SIV troubles have most of America's big banks and many big Euro ones.

So tell your friend Citibank is irrelevant at this point, America's financial system has MUCH bigger things to worry about.

P.S. - Please visit http://financialpetition.org/ and sign the petition to congress to stop the financial practices that landed Citibank in the fire.

[r3volution]

oooo nooo , not 1 less chain bank . what will we do ?? every 1 should have there $ in a local bank anyway .

[mikilu]

You honestly think that if Citibank goes under the other banks will remain unaffected ?

And this is not just Citibank, many of the other primary dealers (JP Morgan) have issues too.

But hey, if you think local banks are immune if the pillars of your banking system go down, ok.

[r3volution]

I'm sure it will be the end of the world :rolleyes: .way to contradict your self ..