(from a financier friend who’s doing a weekly ‘Crisis Update’ – figured some of you might share my keen interest…)
You Have Got To Be Fricking Kidding Me…
Oh, look: more bailouts. The US Federal Government’s financial supermen and superwomen have agreed to rescue Citigroup. What the #@%*? It appears folks that American taxpayers could be “ON” the hook for Citigroup’s massive portfolio. Just lovely. Citi will see the government guarantee of $306 billion worth of securities, loans, real estate obligations, and other big corporate loans that may continue to sour. Citi will be responsible for the first $29 billion in losses…(oh, is that all?) And the government is responsible for the rest. And you were suckered into thinking that the one bailout package of $700 billion was it, ha! The taxpayer bailout cost now exceeds $7.6 Trillion, in case you didn’t know (please see the attached graphic).
The Feds and Citi will be creating something that is called a “bad bank” — an outside entity designed to hold some of Citi’s worst assets. First of all, what type of government creates a bad bank? That’s like creating a bad hospital or constructing a bad Boeing 747. Am I right? And what kind of marketing agency would take the job of branding this bad bank? And what would their campaign slogan be?! I pity the fool that would want the responsibility of that job (almost as much pity that I have for Bam-Bam for when he takes over the reins from George W. on January 20th). And what name would you call this bank? Well, since I’m already on the subject, here are a few….
- Citigroup Gone Wild
- Fleecing Americorp
- Hoodwinked ‘R’ Us
- We Wuz Robbed, Inc.
- Oh-No-You-Didnt.com (an online-only Citibank)
In the end, there will be no management changes at Citi, because, you know, they are all fine and upstanding people who have done an excellent job. If there are anymore bailouts whatsoever, then I am closing my Citi banking account as of tomorrow. There is only $2.48 in the account, but hey, the love affair between Citi and I will be officially over: O-V-A-H, over. Citigroup Schmittygroup.
But let’s not get too wrapped up in this financial crisis, one can sometimes forget there’s a whole world of happy news out there, like the fact that the holidays season is already upon us, being December and all. New York City is gearing up for its festive mood: ice skating couples are madly in love while doing the figure eight in the chilly winter air, Christmas shoppers are pushing the retail workers’ hourly pay into overtime at Macy’s, and Santa can finally light up a cigarette on Fifth Avenue while on his 15 minute break from those pesky kids at FAO Schwarz.
But something appears to have gone amiss in the city of Gotham this season: I was recently told by some New Yorkers that the holiday party that fashion designer Marc Jacobs has held for the last 18 years (normally at Rockefeller Center with 800 plus guests) had been canceled. Canceled?! The theme at the Marc Jacobs holiday party in 2007 was ‘Arabian Nights’ which had contortionists, five open bars, bare-chested women adorned in gold necklaces and bare-chested men balancing candles on their heads. Later in the evening, a shower of gold glitter poured over the guests. Wow. But a short email message that was sent from Marc Jacobs said that: “Due to the financial climate, I had to make the decision to cancel the 2008 holiday party.” C’mon Marc J., what would John D. (Rockefeller) have to say about this? Tis is NOT the season? Boy, I sure do miss the good ol’ days of 1927 2007. Damn, this financial crisis is a bitch.
And lastly…I have to add my two cents on Shay-Shay’s most hated city…Detroit. Don’t get me wrong, Motown has a certain Americana appeal to it that I like: the beleaguered streets that are riddled with potholes which dictates that you HAVE to purchase a new car every two years, the inner-city (predominately black) schools that are underfunded and largely ignored by city officials, and the city’s most famous resident who purchased the city’s only subway and public transportation system — and later filled it with dirt so that no one could use it (thank you, Henry Ford). Plus, it was the launching pad for other Detroiters: Madge (Madonna), Ed McMahon, Francis Ford Coppola and M&M (the Detroit city rapper that was made famous by the film 8 Mile). Yes folks, I misspelled his name on purpose.
Anyway, apparently things are bad in Motown for General Motors (GM). As part of a drive to cut $15 billion in costs, GM is no longer keeping the 562 clocks in working order, as no cut is too small. Pencils too? Yes. GM has switched from their more expensive mechanical pencils to the basic No. 2 pencils. Even the paper cups and the water dispenser in the lobby are under attack due to the massive cutbacks! At GM’s Detroit headquarters, employees working late now have to climb the stairs as the company stops the escalators at 7 p.m. What’s next, missing toilet roll paper in the bathroom stalls?
But hey, things are not that bad at GM, or so I was told by my friend Richard Loerky, who I see at my local Miami Beach swimming pool every morning. While in the locker room, Richard told me that: last week the CEOs of the Big Three automakers (GM included) all flew separately on one of their company’s private jets to make their case in Washington that the auto industry is running out of cash and needs $25 billion from taxpayer money to avoid bankruptcy. The GM CEO touched down at Dulles International in one the company’s $36 million luxury aircrafts — to tell members of Congress that the company is burning through cash, asking for $10-12 billion for GM alone. My goodness, things are really bad. I mean, they could have been more budget-conscience in this Obama economy and could have at least jet-pooled with the CEO of Ford or something…ya think?
(Mind you, don’t forget to have a quick look at the truly disturbing attachment as it was brought to you by the boys of Kansas City’s Voltage Creative Agency/Blog). Until next Sunday at the Meltdown Watch ’08….