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What Happens to Citibank's $8 Billion Loan to Dubai?
On Friday, I provided some specifics about who had loaned Dubai money, and the potential fallout from Dubai's debt crisis.
But I just found another interesting tidbit.
Specifically, 7 Days - one of the largest papers in Dubai - wrote in March:
The US public will be “outraged” by Citibank’s $8 billion loan to Dubai just six weeks after the bank was bailed out, The report Will Citi be repaid in full on its $8 Billion loan, which apparently came out taxpayer bailout money?
US House of Representatives domestic policy subcommittee chair-man has
said. Dennis Kucinich commented on the Dubai loan and other US banking
investments as a congressional panel released a report that strongly
questioned Citibank’s actions. The report, shown to 7DAYS, cites the
Dubai loan as the largest of the “questionable transactions” by banks
after the US government bailed them out. It notes that the loan to
Dubai’s public sector came on December 14, just six weeks after the US
government gave Citibank a $25 billion bail-out.
quotes Win Bischoof, then chairman of Citi, as saying the bank agreed
to the Dubai loan because “we continue to place the Gulf region among
our globally most significant markets”. The report also questions JP
Morgan’s $1 billion investment in India and Bank of America’s $7
billion investment in China. “When the American people find that their
tax dollars, which were supposed to be used to get us out of this
financial crisis, are instead being used to ship jobs and investments
overseas, there will be outrage,” Kucinich said. The report notes the
loans were not illegal and that it is not known if they were directly
funded by bail-out funds. A Citibank official was quoted at the time as
saying the $8 billion came from the bank’s own funds and third party
sources. The report was released as the committee prepares to question
banking chiefs about their use of bail-out funds.
Big hat tip to the anon who has posted this info all over.
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I don't see anything wrong here. Someone has to help Dubai to avoid that horrible financial crisis. United States is one of the most economically powerful countries in the world and Citibank is a nice bank for sure. As I have read not so long time ago, this loan has gone straight to the Dubai. I mean no problems at all. So this article is not very correct to my mind. However let's just be happy that crisis is almost finished and we will be able to live our lifes again. Thanks for the great article by the way. Keep publishing them in the nearest future too.
Adam Peterson from getcashadvanceloans.com
I remember something like a $7.5 billion investment in convertible and/or $12.5 billion in convertible debt by Abu Dhabi investment group in Citigroup in 2007/08. I do not know if that was in addition to previous holdings.
Couldn't they have some influence over Citigroup?
Our economy has been reduced to a giant check kiting operation with printing presses pumping cash into it at break neck speed. We are bleeding to death and killing donors left and right. The thing is, the heart of a vampire (what we are trying to save) is a black hole singularity event. The definition of the situation is always "not enough."
Seperate from the symbolic paper shuffling, infinite game of musical chairs described above (I watched someone's business go bankrupt for a few years before they finally wrote the obit, you keep shuffling paper, losing more $ each go round hoping the next new injection gets it, but it doesn't) there are still real, concrete, obdurate, resources. It seems to me the obvious long play is getting these in your posession and holding them, if you can afford to.
The bullshit is mind numbing. I wish they'd just stop.
In other news state and local governments are "outsourcing" construction work to China State All Fall Down Construction
They will save big bucks on labor and materials, for instance cement that contains 30% melamine and other inert white powders is bound to be cheaper.
I wish I was kidding!
Waldo
Financial suicide
It's all about extend and pretend. The Citi loan delayed the debt standstill from 12/08 to 11/09. We have another 5-10 years of this BS, get used to it.
Ruh roh.
The loan was to ICD, which has explicit government backing. It will get repaid in full and on time.
The question is, which specific entity did the loan go to and was it to cover losses from some other dubious transaction, either with Citi or another US financial entity? Clearly, there is a systemic element here, which drove this... rather than just a loan to provide general working capital or pay impoverished Bangladeshi laborers...
Agreed - nothing is ever what it first seems.
Typical assumptions that people are stupid all over. The bank says"A Citibank official was quoted at the time as saying the $8 billion came from the bank’s own funds and third party sources". So you give me money and I put it in my right pocket,then I take money out of my left pocket and loan it to somebody else. Then when you question me, I reply"but I loaned my own money". What bothers me in those explanation is that like they are telling you you are stupid. And even if you are smart,tough luck. Either way we are going to do it,so you better accept our explanation...
The government loans money to CITIGROUP FOR FREE!
CITIGROUP loans money to china at 2.5%
CHINA buys debt from the government at 4.3%
LOGIC NO?!
China sells "stuff" to Americans at 300% margin.....
Dubai doesn't pay interest on borrowed loans no ? Islamic rule of something.
Stimulus spending at its best. Speaks highly of fractional banking - I hope some of the other fractions were loaned helping American business and taxpayers.
fcuking outragious. this is "exhibit a" as to why these banks should be in bankruptcy court if they fail.
Boy are you sweet and polite.
They should be swinging, like you know, on a playground set, with their mothers pushing them.
This is a non-credible threat. Their mothers would never push them. Their mothers hated them from the day they were born. That's why we have to put up with them now.
Ms C,
I don't think their mothers really hated them. I believe it is much more likely these guys and their mothers loved each other a little too much, if you get my drift...