"Mirage in the Desert"

[amborin]

"....Citigroup, with its firsthand expertise with bailouts, must have been thinking when it lent $8 billion to Dubai last year. Oh, and here’s an interesting fact: Citigroup made the loan to Dubai on Dec. 14, 2008. Take a look at the calendar — that’s after it received tens of billions in TARP funds. Citigroup’s chairman, Win Bischoff, said at the time, “This is in line with our commitment to the U.A.E. market in general, and reflects our positive outlook on Dubai in particular.” Good call."

snip

"former Bank of England official who was hired as chief economist of Citigroup on Monday, says that Dubai’s credit crisis is just the natural progression of “the massive build-up of sovereign debt as a result of the financial crisis.”

snip

With all the money pouring into the region, it would have been hard for any doomsday types to make themselves heard. But there were whispers here and there, pointing out the obvious. David Rubenstein, the co-founder of the private equity giant Carlyle Group who was in Dubai at the conference, remarked to me at the time: “You know, they don’t have any oil here.”

That fact was overlooked by many investors who didn’t want to miss out on a quick buck. What about the risk?"

snip

<http://www.nytimes.com/2009/12/01/business/01sorkin.html?scp=1&sq=financial%20mirage%20in%20the%20desert&st=cse>


"From the Baltics to the Mediterranean, the bills for an unprecedented borrowing binge are starting to fall due. In Russia and the former Soviet bloc, where high oil prices helped feed blistering growth, a mountain of debt must be refinanced as short-term i.o.u.’s come due.

Even in rich nations like the United States and Japan, which are increasing government spending to shore up slack economies, mounting budget deficits are raising concern about governments’ ability to shoulder their debts, especially once interest rates start to rise again.

The numbers are startling. In Germany, long the bastion of fiscal rectitude in Europe, government debt is on the rise. There, the government debt outstanding is expected to increase to the equivalent of 77 percent of the nation’s economic output next year, from 60 percent in 2002. In Britain, that figure is expected to more than double over the same period, to more than 80..."

snip

<http://www.nytimes.com/2009/12/01/business/global/01debt.html?ref=business>

[amborin]

1. now why would anyone un-rec this?

perhaps angry that TARP funds were loaned to Dubai?

[Better Today]

2. I wish I'd seen this response before I rec'd because I always try to unrec

folks who comment on unrec's. What difference does it make whether someone unrec'd it.

[Better Today]

3. These banks are just screwing us all royally. Then there is also an OP

I read earlier about their faux profits being simply an accounting trick. It's downright annoying and scary.