I thought it would be interesting to take my understanding of the sub-prime market fallout and explain it in terms even I can understand.
Some fast-talking promoters made risky loans look like safe loans using cell-phone-bill-like hoodwinkery. Many banks, including Citibank, fell for the smooth talk and invested in the risky loans (dubbed SIVs, or Structured Investment Vehicles) as if they were safe loans.
When the truth came out Jack discovered he traded his milk cow for a few magic beans that, when planted, did not germinate.
Thanks to the United Arab Emirates Sovereign Wealth Fund (at $7.5 billion) and the Government Investment Corp. of Singapore (at $6.88 billion) Citibank will likely recover.
What does it mean that a nation that is ranked 146th out of 167 nations by Reporters Without Borders in the Worldwide Press Freedom Index now owns a not insignificant piece of the world's largest bank?
Will American financial services soon follow American manufacturing overseas?
Will all of our financial information now be exposed abroad?
When I took out a mortgage I went down to the local branch of the local bank. Before the ink was dry, they sold the loan to Fannie Mae, who then sold it to a large regional bank, which was then purchased by Citibank, who is now partially owned by the repressive government of Singapore. The experience reminds me of being sold down the river, as in Harriet Beecher Stowe's "Uncle Tom's Cabin".
All these multi-tasking, multi-global corporations are racing humanity into a ditch using the ability to spend as their golden rule aren't they?
Is life to be nothing more than a dog-fight?
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