I got this note from Citibank just now

[gristy]

Good news! Citibank is participating in the FDIC's Temporary Liquidity Guarantee Program. Through December 31, 2009, all of your non-interest and interest bearing checking deposit account balances are fully guaranteed by the FDIC for the entire amount in your account. *

And as a reminder, in October the FDIC increased the amount of insurance on eligible savings accounts -- such as savings, market rate, money market accounts, club and holiday accounts, and certificates of deposits -- from $100,000 to $250,000 through December 31, 2009.**
To learn more about FDIC insurance, visit the agency's web site at www.fdic.gov or call a Citibank representative at 1-800-374-9700. You may also call the FDIC at 877-ASKFDIC (877-275-3342) or TDD 800-925-4618.

Before they got their 30B bailout and 300B subprime loan guarantee, I was ready to pull out all my cash.

Now I'm happy.

[marmar]

1. PLEASE don't close your account. We're solvent.....Trust us.

n/t

[RB TexLa]

2. They need to make the $250K limit permanent, it should have been raised a long time ago.

[Recursion]

3. That's a fair point

$100K was a woefully anachronistic limit. At least one good thing has come out of this.

[truedelphi]

4. Uh don't you understand with our current need to print up about

Seven Trillion bucks in Bailout and guarantee funds, no one's money will have value??

There is nothing good about any of this.

It's rather on the order of "Wouldn't it be nice if everyone who plays Super Lotto this Wednesday has the winning numbers."

[Idealism]

7. It won't get to hyperinflation like in Germany

The US market is too important. We use 25% of the world's oil, we are the top importer of goods in the world. We are China's and Japan's ticket to steady income. If our money becomes worthless and our country can't afford anything, it will lead to a world wide depression, which will help no one. for this reason, prices will remain relatively the same. Just add more to a national debt that we have zero intentions to pay down ever.

[truedelphi]

8. Actually the scenario that worries me the most is that we will get to the absoltue down and out

Totally broken scene that existed in Romania. No food on the shelves, no goods in the market place. A broken nation of malnourished people with their top people doing okay, until they were lynched.

You can say, as you did in your post, that our market is important - but those are just words. Our market being important was a concept that held credibility perhaps six months ago - butthat was six months ago.

The other nations in the world are now waking up to the fact that what they have been sending us, that is real goods, with material value, and what they have been getting in return, paper goods, financial instruments like SIV's and Credit Default Swaps, those paper instruments are all worthless.

So the nations of the world are waking up to the fact that we represent nothing. China cannot continue to lend to us - they just announced their own 700 Billion dollar Bailout for their own economy, so their funding will stay in house, at home in China. (Side note: the difference between their Bailout and ours is that they will be building up their infrastructure etc. which creates real jobs. They have to create about 17 million jobs a year so that the new workers that come into the system are not sitting around planning yet another People's Revolution.

Whereas our Bailout is nothing more than our Central Bank taking out our entire economy and that of generations yet unborn, and offering it to the banks it chooses (much like the old politboro did in USSR) and those banks will buy up other banks.

This does not put a single penny into the lines of credit that this country needs - such as helping an individual buy a car and as an intended consequence, helping the auto industry to sell cars. Nor is it backing up the mortgages of a group of people who were hoodwinked into buying ARM mortgages that have now severely escalating prices. Instead, it offers elimination of the competition to the chosen banks and bankers, and it allows those chosen banks to do things like buy up the local water utilities - so that in addition to haveing no credit for purchases, or for payroll expenses etc, now the average American might see an increase in their water bill. (In Bolivia, the privatization of water utilities resulted in extremely high water prices. People eventually took to the streets in order to get their water back. People died before those water utilities were returned.)

[Idealism]

9. Your historical accounts are largely on but

Romania, Bolivia, and Russia never had their currency used as the benchmark in which business gets done. None were as important as the United States is to the global marketplace of goods. If the 300 million consumers in this country stop buying clothes- that get made in China, electronics- that get made in Japan, or needing oil- largely from the Middle East, then these countries would have to lay off hundreds of thousands of workers heading them ultimately into recession themselves. The countries you named all didn't have the authority, legitimacy, and sovereignty the United States has in the eyes of the world, no matter our current troubles. There is a reason why our government bonds won't ever get downrated from AAA- no matter how much we owe- because if the US won't make good on them no one will. You are downplaying the United States roll in consumption, and it is the highest by far in the world, hands down. Without us, the entire globe would have a lower standard of living.

[truedelphi]

10. Our consumers are stopping the consumption

Not because they want to, but because they have been spent out. The jobs that paid well are going going gone. The equity line of credit once always possible to tap into even as the housing market boomed and then boomed again, that is gone too.

So the consumption is flat. The world of electronics is coming to a stand still - Sun Micro announcing huge fiscal problems and laying off people. The Semiconductor giants doing the same.

You say: "then these countries would have to lay off hundreds of thousands of workers heading them ultimately into recession themselves"

Laying people off is exactly what those countries are doing. China is facing tough times. (Hence its recent Bailout announcements.) Hong Kong also. India retained a superb set of banking regulations, and so wasn't taken in by the flights of fancy that other nations fell for, as our financial brokers sold SIV's to the nation of Denmark and others. So India might remain above the fray.

But the world economy ruled in early October that it had finally figured out what nonsense our "financial instruments" were.

That is why the stock market was below 8,000 for much of last week. The writing is on the wall - and the 660 trillion dolalrs derivative losses that are in the pipeline have damaged our credibiility to the point that the government bonds will indeed see themselves going from triple A to F-. Not what I want, but apparently our Masters on Wall Street did fool far too many people for far too long.

[Idealism]

11. Have some optimism, sir!

Our bonds won't get downrated because we can just print money to pay them back. Whether they are a good investment or not is another topic... The world is mulling a bailout for each country practically that has been globalized. If India isn't constructing one now, they will be, because capitalism has been spread like a virus to every corner of the world. The stock market was below 8,000 not because countries thought our instruments to be frivilous, it has dropped so drastically because of the lack of confidence in the banking sector. The confidence stems from solvency issues. Citi has over $600 billion dollars in toxic debt, and because of the wonder that is securitization, every bad mortgage that gets packaged up ruins the entire proverbial bunch. No one knows the value of the assets they are holding, so confidence, and subsequently the price the stock is worth drops like a rock. I admit its not a rosy outlook, but I don't think the world will let their biggest gravy train to just end. Of course our consumer spending will be cut back, largely because the past two decades of growth was fueled on credit, but it still will leave us the clear leader in trade imports and spending per capita, so cheer up :)

[truedelphi]

12. minor aside, can I point out that the oracle at delphi

was always but always, a woman??

[Idealism]

17. Just a term of respect

sir or madam :)

[girl gone mad]

15. Europe's currencies were reserve currencies..

in the 1920s. They were in our position then, net consumers in debt to the USA. They chose to devalue their currencies and default on the debt (or partially default and force renegotiation).

As a result, Europe suffered a milder downturn during the Depression. If a similar pattern transpires, the US will default and China will bear the brunt of the collapse.

[Idealism]

16. Fortunately China has reserves of USD's over $2 trillion

They can bear the brunt because they will keep producing goods at incredibly low wages. Europe in the 20s isn't comparable to the current amount of consumption in the US today, percent-wise or in aggregate demand, so I don't believe the US dollar will go the way of the mark or the leera.

[truedelphi]

19. But how do you answer this -

MAjor market players are driving the price of oil down belwo $ 50 a barrel. In order to break down the Middle East.

Oil is traded on the dollar, as youmay have noted earlier.

The economy becomes unsustainable for the Saudis once Oil drops to below fifty bucks.

Then it is possible that we will see the Saudi's dropping the dollars, and turning to Gold.

Some forecasters state that gold could go as high as $ 1400 per ounce by Dec 31 and reach 2000 an ounce mid year next year.

[Idealism]

20. Oil should never have been the level it was

That much is now starting to be common knowledge that speculators got a bit ambitious in their greed. The Saudi's don't own gold, or gold mines. They may invest in it but they do not produce the commoditiy, why would they ever stop pumping oil?? The stone age didn't end because we ran out of stones, is the saying. The Saudi's know this and until we don't rely on fossil fuels to power our automobiles, they have us by the balls metaphorically speaking, and will continue to export oil because it is the only thing they do. The Middle East will lose relevance once we get off our addiction to oil, and they understand that and will do everything they can to squeeze every penny they can out of us.

[truedelphi]

21. You might wanna check out the top story over here

Some of it echoes things you are saying but some of it may not.

http://firedoglake.com/

Story is titled "Expanding Treasuries"

[Idealism]

25. Another thing I forgot to mention

OPEC countries, Saudi's included, spend next to nothing to pump oil out of the ground. Its mostly automated and they don't even pay for their own security. The US guards oil lanes, and its been estimated that 1/3 of the Defense budget goes to protecting these lanes, so the end cost of production for crude oil is not as high as you would think. The Saudi's can still make money off of $50/per barrel, they just don't make as much. Now they may have budgeted for higher, and there could be a shortfall, but it isn't bankrupting them by any means. Chavez, I believe is having this problem, as he's promised expansive public programs that due to the drop in oil prices, he won't be able to pay for. I've heard Venezuela needs oil around $100 per barrel just to sustain the ambitious initiatives he has planned.

[amerikat]

5. The limit should be tied to the inflation rate.

Just saying. Update the amount covered every year.

[gristy]

6. Should have said the email's subject line said "Unlimited FDIC Insurance Coverage on your Citibank "

:wtf:

[JackRiddler]

13. This is quite the implicit confession about what they think you're likely to do...

If they let the public have a peek at their books. No?

[bridgit]

14. I thought this Citi Bank stuff was common knowledge. When bush bails Citi he's bailing UAE...

'Abu Dhabi and Citigroup: What next?

30 November 2007

Abu Dhabi Investment Authority's $7.5 billion Funds investment in convertible bonds issued by Citigroup, the Wall Street money centre banking colossus reeling from the resignation of its CEO Charles Prince and untold billions in subprime/ CDO losses marks paradigm shift in the global financial markets.

Sovereign wealth funds have now replaced private equity as the anchor investors in international banking institutions when a financial neutron bomb guts their balance sheet.

ADIA has the luxury of taking a long term perspective in its Citigroup investment. After all, Citi is a financial conglomerate with a 7 per cent dividend yield, branches and subsidiaries in more than 100 countries, crown jewel retail banking assets and a world class investment bank Salomon Smith Barney that would well be spun off just as American Express spun off Lehman Brothers in a 1994 IPO on the New York Stock Exchange.

Moreover, since its shares have plunged, almost 40 per cent since the summer when billionaire hedge fund manager Eddie Lampert built a stake in the bank, ADIA bought into Citigroup at a rock bottom valuation metric, as low as 1.4 times book value.

Above all, Citi has no permanent CEO and on verge of its most traumatic cost restructuring since the fateful summer of 1991, when Prince Walid bin Talal invested almost $600 million as the bank reeled from ruinous losses in the Latin American syndicated loans, Texas and New England commercial real estate and busted leveraged buyouts. If history repeats itself, ADIA could earn a windfall if Citigroup manages to survive the Wall Street credit crunch without slashing its dividend and engineers a new corporate strategy.

ADIA has been investing in global financial markets across all asset classes ever since it was established to handle the emirate's petrodollar surpluses back in 1970's. While its assets under management are not known with any precision, estimates by London bankers range as high as $800 billion. Nor is Citigroup ADIA's only financial investment.

Abu Dhabi's sovereign wealth fund has acquired strategic stakes in LBO house Apollo Management, David Rubenstein's Carlyle Group (demonized in Michael Moore's movie Fahrenheit 911) and Middle East stockbrokers EFG Hermes.

Banks and brokerage houses are assets whose franchise value can be best evaluated by ADIA's money managers, who are easily the most attractive SWF buy side client for any international financiers in the Gulf anywhere between Oslo's Oil Fund and Singapore's Temasek. Yet investments international banks and brokers has meant huge reputation risk for the Abu Dhabi in the past.

The emirate was the largest shareholder in BCCI, the rogue bank whose collapse in 1991 amid fraud and money laundering meant a $5 billion loss and a blizzard of litigation that still continues. Yet a strategic investment in Citigroup offers Abu Dhabi inestimable value added benefits. A turnaround play in global bank with $2.4 trillion in assets. Access to deals, investment banking expertise, economies of scale in money management and a global profile.'

http://www.zawya.com/printstory.cfm?storyid=ZAWYA20071130065141&l=065100071130

It all fuckered sideways, and there's no way in hell the Bush family is going to let their oil rich friends take a hit cause they'll start crying if they can't make money enter the American taxpayer and that's where all the money is going

[Deny and Shred]

18. Upping FDIC to $250K is industry-wide, not just Citigroup.

The letter has nothing to do with the bailout $$ per se. The FED upped it for all FDIC institutions, about a month ago.

Citi got $20 Bil in the first round, now another $30B plus $306B in guarantees on their bad assets.
This picking winners and losers is pure theft.
C closed at what, $3.77 last Friday, went as low as $3.05? Anyone with knowledge of the weekend bailout made quite the profit by Monday. Oh, but I'm sure there were zero friends who got advanced word - sure.

I guess the Saudis didn't have investments in Lehman. Actually, targeting US financial firms in which the Saudis have large investments is an interesting play. When the firms are again on the verge of collapse might be the time to pile in over the next 2 months. If you're right, they will get a fresh batch of free cash, and the stock will jump close to 100%.

[Robbien]

22. Glad you are happy. They are too. They got our taxpayer cash

and are looking forward to their Xmas bonuses.

They are also happy you plan to keep your hard earned cash with them. They promise to be oh so trustworthy and use it only for good.

[truedelphi]

24. And gristy does not seem to "get" that it is meaningless

To say that "You r money is insured with the FDIC up to 250,000"

That is just like three years ago, when the buyers of the SIV's were told that their purchases could be insured with Credit Default Swaps. Once the system implodes, all guarantees are off.

[Greyhound]

23. Did you forget your sarcasm smiley? n/t