The Buzz About Citi's Future Writedowns

It is time for all of us to recognize that many people cannot and should not own a home. Even if they contract to buy one and contract to borrow money for the purchase, they simply won't ever pay the debt. The idea that anyone who wants to buy a house ought to be permitted to do that is ridiculous. We need to expect a borrower to demonstrate that it is safe to expect the borrower to do everything in his/her power to pay the debt. We need to expect a lender to do everything in its (corporations are ideas, not people) financial skillset to determine if a borrower is a good risk and if collateral is appropriately valued. As a society we do not owe borrowers or lenders any bailouts. Adults should take fiscal responsibility for themselves. I am tired of hearing that every crisis requires the use of tax dollars to fix the problem. If the new USA had tried to rescue every citizen with a problem in 1789, this country could never have grown past thirteen squabbling states. The backbone of American accomplishment has been citizen willingness to take risks and pay the price of failure. There is no cosmic law that says nobody should ever get hurt. If I walk off the roof of a ten-story building, I will fall to the ground. That is a cosmic law. If I borrow more than I can pay back, using collateral that is not worth the amount of the loan, I should take the consequences and my lender should take the consequences. It isn't anybody else's fault.

Oh, correction on that last post Forgot, by the time both candidates to choose from have passed through a Rove mill ? the US corporate advertisements become embedded into the promises and speech. I forgot, we ALREADY live in a corpocracy, and I really don't see any change in that any time soon. China perhaps opening up capitalistically can bring some serious new challengers to start competing via lobbying. I know one group of Chinese lobbyists, heh, that are overstaying perhaps at the local Holiday Inn's in D.C. - Bank of China. maybe it's the free Wi-Fi that attracts them, I don't know but I'd love to see how BoC if at all has found way to - uh oh, nm. This column keeps politics out of things, and I'll follow from that - nm

Speaking of the desertly hillbillies ! ? Just imagine if the Saudi's or UAE sits there shorting on oil ! heh something tells me that just makes for one crazy illusory mirage. One thing for sure... wrong article to post this, but I do wonder what kind of nightmare scenario you could reveal with the concept of naked shorting applied to commodities. I can see Muriel Siebert going "Oh god, that's far worse than where we are right now !" somewhere, somehow someone is applying naked shorting concepts to commodities I bet. I found myself on this term bear run yesterday - rather surprising, it is illegal, but it's when a group of people spread a rumor, or get together to push a stock down to cover losses on a short. I suppose the Bear Runner's for the most part, either don't exist, or don't get caught ? Now, on the OTHER side of the dodecahedron here, I do say - let's be real - bear run ? Hey, this isn't far from one group of psychotic amish coming over to burn the barn of another group, only to get smashed the next week and rebuild both barns - no, that's just not a good example, thankfully the amish won't ever be online, so I'm safe there ? But this concept of a bear run ? Nothing in the markets is really all that scary when you consider, say, a REAL 17 foot tall Kodiak bear in Kamchatka comin' after ya at 36 mph ? Really - this is light temporary human civilization is at THIS spot on the map stuff - the market abuse, the bear runs, the naked shorting (if it ever happens ? heh)- the commodities exploits - the CDO's and attempts to obfuscate what's under the hood, onward.... It's all light stuff compared to say - ? a big 17 foot kodiak comin' after ya in a real bear run ? eh ? bears only attack one or a few people though, the bear runs I'm referring to attack and damage entire companies. On the flip side, as I was saying, this is all pretty basic animalistic tendancy stuffs I keep running into with thievery, corruption or otherwise exploitive practices on Wallstreet. Then again, I can see an animal being cunning, but lying ? no. Would a REAL bear ? ever get involved in a bear run ? Well, wolves circle - I Killer Whales do this too, the circle to force a desired scenario - and everyone eats. I'm not sure real bears would ever work together like wolves, not that they are not related ? Perhaps WallStreet needs a third party ! the Wolves ! Then you could have the bulls, the bears, and the wolves. Soon, it approaches rock paper scissors. At the end of the day, I think all that happens through mercentile exchange is an open, outwardly demonstration of the common shared belief in the infra-structure of inter/intra-commerce interchange. Bottom line is 4.x billion people still make under $3 a day and seem to derive a meaningful experience of living. Seems WITHOUT globalism, nationalism is going to sit around and steal from the casino - (e.g. these last 6 to 7 years starting with 'you got the green light baby'). The nice thing about globalism I think American's will find is - there is no more use for nuclear weapons. Of course, there can only exist one other group than the globalists! the non-globalists, or perhaps the 'terrorist' will suffice, which if you think about it, is really what's going on with semantics, we're watching nationalism fray- economically ? it's a global economy, technologically ? meaningful media interchange wise ? internet ? global - And yet ? the big fool said to push on Oh well - sooner or later the US Dollar is going to kiss it's greenback days of phony military hyped overvaluation post WW II persona to the desert wind as the Desertly Hillbillies eventually follow Kuwait, which has indeed successfully said - buh bye US D, we're unpegging. Even the Saudi's say - and where Paulson MISSED this last month, beats me, that they WILL eventually unpeg ? I like upstream thinking, and although we already see middle eastern re-deeding to US financials - such as with citi ? In some ways, IF indeed as Saudi's do report that they will follow kuwait and unpeg from the USD eventually ? (castles made of sand hmm, oh well) ? Then citi's current above water survival stage thanks to the UAE ? doesn't even really matter, because there will be bigger problems on the horizon then for the US and the USD. I still think the best argument for globalism over nationalism is 'hey, no more nation state ? no more big red target, therefore, no more - wow - go figure- no more terrorism !' once people see that, that terrorism is actually a result of stale nation state bread - e.g. nationalism ? They'll through out nationalism, looking at the mold going 'wow, no wonder there never seemed to be the right 'leader' for 300 million people, out of TWO to choose from ? ' lol Enjoy the olympics, and of course the greatest sporting event, the US november elections ! ? I can't wait to get real corporate advertisements into the voting booths ! hmm -

Buzz Gee ? regarding the nature of why these write downs occur ? I'm not sure we want to know how many planets out there have life, I mean, how many people would qualify for failing, typo, JAILING, or being jailed in respect to these so trendy write downs. I do say, leaving the supermarket ? Ought I to say to myself ? Wow - I can't pay for that, BUT, I'll just mark it as a write down - and hey, bow steady, no big waves, no coastguard raids and this drug ship might just make it to shore ? I question the difference between cleansing and laundering when it comes to the full circle treasury pipeline/Fed window involved here. One thing for sure, Citi may be candidate to go below 6 cents on the dollar and reach into the negative. That is, with citi, you're not looking at some broke person, you're looking at a broke person with tuberculosis, HIV and lord knows what else. Danger Kitty for sure with Citi. Traveller's checks or Citi Credit ... hmm... I like Citi's marketing, it's rather amazing they can pull that off. It's like a wolf going about in a rooster costume at the local rooster country club, Citi probably only sleeps with the aid of a psycho-pharmaceutical some anti-depressant or anti-histamine remarketed as a sleep aid. Let's think about this. BoA steps in with a continued support of 2 billion at about the same time iirc as UAE/Abu Dhabi stepped in with 11 billion for citi. BoA and CW ended up getting a pretty secure boat ride across lake danger kitty, but what safety net doth citi bestow on her bow ? Beats me, the desertley hillbillies (local oil princes, shieks and lord only knows at the top levels) ? Perhaps, either way, if CW needed 2 billion, and Citi needed 11 billion, I'm not sure if there is anything to be drawn from that, but what kind of effort started last november with citi ? Was it the same kind of down payment ? from Abu Dhabi ? as BoA's 2 billion was to CountryWide ? I don't think so, I think Citi was in serious trouble then, and even more trouble now. I don't even think UAE wants to approach bailing citi out, nor do I think citi will get nearly as much attention from US Congress as CW and BoA did. citi kept their toxic waste generator sub prime unit - Citi Financial, but dumped their student loans. Gee Who are these people and what interest does citi have in humanity ? Yes, let's fail on education, Greenspan's big warning over a decade ago, and he's right to do so, ('no child left behind' didn't quite meet up from idealism to realism), and after failing on education as it goes at some bigbuttocked 40 seat oak table on floor 42 at citi ? Citi goes on to promote further toxic waste generation to no doubt pass on. Makes me think of WorldCom when I think of the way citi embeds the cost of the insurance for the loan to Mr. X at 27% into the loan itself, and penalizes for early payback, amongst other traps to keep US citizens in a never ending trap of interest only living - hey wait a second, I think I got the US nation state macro economics mixed up here as the US too is on interest only living, thankfully people breed, as that spreads the debt - what is it now ? 178k per person ? their share of the US debt ? citi was no shooting star, even if it DID know it was a shooting star. citi is more like a black hole - instead of brandishing a smear of white light across the dark sky, citi sucks in any light of day from any sun it seems. citi recently celebrated it's 2,000th citi Financial sub prime unit - most often found in - yes, you know, strip malls. These credit holes to choose a term, draw people in - GREAT loan product candidates who are never qualified nor should be allowed to get themselves into high interest loans - that come with so many hindrances to pay the loan off ? It becomes clear, it's not a loan that's ever intended to be paid off, it's an interest only lifestyle in store for anyone who walks through the door, doesn't read the fine print, and signs on. Question is, if I feel this way about citi, and the US does this at the macro level ? At LEAST as to the interest only lifestyle ? This brings me back to M Lynch- on the 50 to 1 debt ratio, wondering, am I in error ? am I not living according to mimic the macro economic model ? am I to live with 50 times my earnings in debt ? Am I too supposed to live at 50:1 ? Where 50k a year equates to 2.5 million bracket ? citi's interest is so high typically, I don't think you could manage a 5 to one ratio of debt to income let alone 50. ARM's are fine, for a DOCTOR ! citi provides the equivelant of an ARM - only for really anything. CW provided the ARM, then GMAC was there (DiTech) or well plenty of fly by nighters were willing to let you take out on your newly acquired home- that was clever, but citi just says bend over as you sign the paper, and leaves you in the room by yourself, saying 'you figure it out'. Citi stooley's never do quite figure it out until it's too late. I suppose this is possible regarding the US as well. I'd say the big question is, what's moving on the soverign wealth funds with citi. I can't decide if the desertly hillbillies want to keep citi afloat so as not to go down with the ship - OR - if it's just going to be cut and run - see ya - too bad about the 11 billion, we'll make that by noon tomorrow ! (sayeth the desertly hillbillies).

How many jail cells do we really need?

from article: "Citi chief financial officer Gary Crittenden says the bank is comfortable valuing this portfolio at 62 cents on the dollar. We shall see." end paste Gee, if citi is comfortable with 62 ? What's the bottom end of their expectations ? Sheesh ? 50 ? 40 ? Are they just happy not to see the 6 that Lone Star later post-reviewed this 62 cents on the dollar to be worth ? Gee, if Lonsestar re-evaluates to 6 cents on the dollar, hey, who wouldn't be happy about 62 ?

Might be nice to see a tally of all the write downs as in - who's keeping score

Sheesh, talk about bottom of the bucket citi is close citi is like that silicon gel that adheres to aluminum buckets you can't scrape out of the bottom. Ok, maybe not. Maybe everyone doesn't make life size giraffe molds from silicon, I sure don't. My favorite unit at citi (note the caps) is citi financial. wowza - 40% ? on loans that were insured borrowing from the loan itself ? 'just sign here mr. jetco' sure, what kind of name is Jetco - but citi financial I believe hit there 2,000 mark last year for strip mall outfits. Perhaps we've all seen them. I looked a bit more into it and found CF testing CRA limits, all the while offering up loans 20 to 40% to people who could never ever pay them back - and even if they tried ? penalties for lump sum payback as far as I understand. what a predatory unit. Criminals usually exploit their own community unknowing they are ruining a non-disconeccted environment that is connected to anywhere they go. These include those who would seek to not benefit a community, but ensnare it- trap it - into in some cases ? a lifetime of debt. Imagine a loan at 35% sheesh CF did keep their strip mall sub prime unit, but dumped their student loan outfit. and student loans are backed so well by the Dept. of Education ? and they drop those and keep ? strip mall exploit city, by MY definition, criminal. As citi financial IS disadvantageous to ANY community. restitution ? is beyond imagination when it comes to citi's abuse if you ask me.

from article: "Citi chief financial officer Gary Crittenden says the bank is comfortable valuing this portfolio at 62 cents on the dollar. We shall see." Gee and that's on a dollar being a dollar. 6 cents isn't too bad is it ?

from article: "That’s the talk on Wall Street, as Merrill Lynch (MER: 26.36, -0.49, -1.82%) recently unloaded $30.6 bn in collateralized debt obligations for just 22 cents on the dollar to Lone Star Capital. On closer look, the private equity fund in Dallas is saying these CDOs are really worth just 6 cents on the dollar, as Merrill loaned Lone Star 75% of the deal to get this Kryptonite off its books, and Merrill only has recourse to these CDO assets if Lone Star welshes on the loan." end paste I have to wonder why anyone would either fail in the staff competency requirements to MISS 22 cents being 6 cents on the dollar. Gee, Lone Star either really screwed up, or they have just helped bring an ancient Chinese secret (remember the TV commercials ? ) to an otherwise non-blatent laundering process. I do say, if Lone Star gets something out of this to cover their losses, maybe from Treasury, it makes me think of those farms where you could just sign up saying you were going to raise - what was it ? Ostriches ? I think ? and the Fed Gov. would PAY you NOT to raise them, or was it a food product, where you were paid NOT to grow a certain food. Makes me think perhaps one could open a business that just consumes this toxic waste, and in turn, turns a profit by seeking to come out ahead by gaining access to the borrowing window. I don't lose any sleep though wondering who insures the insurers that insure these institutions. Always exciting to see new material here, why ? Becuase- here you get competence, direction, insight (not so much typically - well not as much opinion as I'd like the hear from Elizabeth MacDonald, but opinion can skew things from POV of a journalist), oddly from Fox ? you actually get non-biased reporting here ! Least to date, I've never seen MacDonald muddle anything with partisan insults, etc, just facts. Hmm.. I know, Ms. MacDonald, based on MY observances, you could probably be not only cleaning up with books - I'd say across the board, short of Business Russia (I really don't watch that much TV anymore), but you might be able to compete with Deepak ! I say that only because I do detect a careful ear, at core ? there is peace why ? because - you don't ever lose composure - clearly work is enjoyable (I bet I got that wrong !), if I had any wish for financial media insights, coverage, I bet Muriel and Elizabeth would not only bring clarity to the air - and understanding of just what we are looking at - as the world opens up before us, but I found myself leaving the Muriel interview with a sense of restored faith, belief that hey - it's as if children have found their way to the control room for society - and well - we can indeed shape our own future - and we don't have to tolerate abuse of commodities, etc. I bet Muriel walks by 150 chums a day, I say chum meaning some yayhoo 28 yr old guy (ok, why genderize insolence and greed !), on their way to their oak desk managing their hedge fund, or hmm - perhaps seeking to get 8 figures next year for salary- manipulating, spreading rumors, doing anything they can to get there... Muriel seems far from insolence and greed. Oh well - I'm digressing REAL fast this AM - I'll continue reading the artical now.