It wasn't that long ago that Citibank dispatched Robert Rubin to some Arab country in search of much needed cash to bail one of Americans largest banks out of financial difficulty because of the sub prime mortgage market. Then there are rumors today that Citibank is also in talks with China and Kuwait to give them even more cash, around $14 billion to be exact. There is something bad happening under the surface of the U.S. economy and Citibank may be the leading indicator as to what is wrong. For too many years, the American people have followed the lead of the U.S. government and spent well beyond their means.
While no one wants to talk about this problem publicly, in reality the United States of America is in a sad state of affairs, financially, right now because politicians and regular everyday citizens do not understand what it means to save money. The U.S. economy has been held in check from recession for years now by a consumer driven market of ever increasing spending and soon something will have to give and that will most likely be our own wallets. For most Americans, the problems at Citibank do not seem important to them. However, in reality the problems at a huge bank like Citibank are one of the most important things in their financial future.
The United States has not operated on a pay as you go system for a long time now. Instead, our economy and really our whole way of life is built on a credit system of buy now and pay later. When huge credit lenders like Citibank become so strapped for cash they they must go begging to foreign nations like China to bail them out, then the whole U.S. economy is in real danger of slipping into recession or even worse, depression. In the old days people use to look to General Motor as a guide of what was happening in the U.S. economy. Today, many people like myself look to large banks like Citibank to give us insight into what is happening behind the curtains of a complex and intertwined U.S. economy.
Keep a close eye on Citibank because I believe in this new Millennium, that one company might be the new General Motors to help the average American understand what is happening in the U.S. economy.
Read more about the Economy:
Countrywide CEO Angelo Mozilo's $100 Million Severance
Michael Dell Rebuilding His Computer Company
Wall Street Could Once Again Face - 'Black Monday'
Are American's Recession Fears Justified?
Stan O'Neal's 'Golden Parachute' Worth $160 Million
January 12, 2008 Archives