Citygroup sells to Arab Investors

FTA: "The cash from the sovereign investment fund of the Gulf Arab state, which has benefited from this year's surge in oil prices, will be convertible into no more than 4.9 percent of Citigroup Inc.'s equity."

Abu Dhabi Investment Authority is buying up to 4.9% of Citigroup, which is far from a takeover. In fact, it's below the SEC ownership disclosure threshold.

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"When I say your dumb name, please stand up briefly, but then quickly drop to your knees and forsake all others before me." -Ignignokt

makes them one of if not the largest shareholder

Come on, at most ADAI will have no more than a 4.9% Citi stake (not by chance is it just under the disclosure threshold, but intentionally under so as to avoid disclosure!)-- $7.5 b is not getting 'em a seat at the big table. Saudi Prince Alwaleed bin Talal had been one of or the largest shareholder since he bailed 'em out in 92. Hasn't cost me any sleep.

We bring in $4 billion a day from foreign sources to cover the current account deficit, $7.5b more for a stake in Citi isn't much to worry about. In fact , I'd rather they have some skin in the game!

What's more frightening is that Citi had to pay 11% on the convertibles to get this little injection, even after floating the rumors about 45,000 to 55,000 in layoffs and another $11b in write downs come Dec. You don't pay 11% from a position of strength; junk bonds are paying 9%. These banks need to come clean about the pending losses and write downs when they mark to market. Time for full disclosure. What more problems are lurking there, when will the conduits come home to roost?

Remember in the 80's when the Japanese were buying everything. 20 years later, it hasn't been a big deal at all.

and even if it did...they would be to afraid to say it. They wouldn't want to be considered intolerant or racists.

Just like any other county outside of ours, I'm always leary of bank/land/corp. buying and selling of American interest to outside influence. Once American capitol investment is no longer souly American, we have begun to be purchased by other nations. It's one thing for a minor purchases, but a large stake or controling interests in unaccepable.

Sensor referred to the Japanese buying into American business through the 80's and it not being a problem. Ya better look again. While I lived on the NW coast of the US for 10 years I observed even in my youth the way things were heading there. Does anyone have any idea how much American soil and Business are currently owned by China and Japan? Other Countries? Take a deep look, you will find that a growing amount of our country is owned lock, stock and barrel by other countries. We've leveraged ourselves to the brink of a financial takeover.

The UK owns more of the US than any other country, last I checked. I may be out of date on that one.

I don't really care about foreign investment. I can't do anything about it anyway, and the Federal Gov't won't act to protect the citizens from foreign nations, so why get all upset? Of course, there's this little item, just mentioned in passing: much of it on the back of oil prices that have risen more than 60 percent this year, bringing record cash flow to the region.

Record cash flow, another way to say that the filthy rich are now approaching wealth beyond the dreams of avarice. I drive, so I help pay for their riches, and the US Gov't isn't doing a thing to move the country away from our dependency on oil.

Oil prices rise.....
Oil producing nations are now among the wealthiest in the world......
Our economy gets dimmer and darker as Americans pay more for utilities and transportation..........
Cost of living increases.....
Income diminishes........
Jobs are going overseas arcing out the American edge.....
Foreclosures are rampant, Banks are brinking on collapse.....
Wealthy Arab and other Countries offer us the "Bailout" with a price....
We still owe them and we're paying them in a triple dipping way.,...
In effect, we are paying them to buy up all of our resources and debt....
Sooner or later, they will collect on the debt!

It's Hangman and Monopoly and we're on the losing end.

The concept of an "American" corporation is going the way of the horse and buggy. Once a company reaches a certain size it has to go multinational to survive. A multinational corporation will not do what's good for the U.S. any more than it would for any other country. It's the bottom line that counts.

Thomas Freidman, Harvard trained econimist and columnist, wrote a book several years back that explains how the U.S, will be competing on a level playing field in the world economic market. I believe the title is "The Earth is Flat".

It seems that many in this country fail to realize tha when the time comes other countries will be just as ruthless to us as we have been to them. In the words of a Chinese diplomat in a conversation with Mr. Friedman, "You have taught us well."

Is now headed downward.

The world is an ever evolving place and the U.S. cannot simply stay the economic powerhouse of the world forever. History has taught us that.

http://toledoohioneighborhoodconcerns.com/blog

I don't think a foregin country having a stake in US business doing well creates problems for us. If anything it means they have a larger stake in keeping the US safe. If the WTC was owned by an Arab country then I doubt Islamic extremists would have flown a plane into it. IMO
But we could argue it either way all day.
I think we all should view this as good news with tempered caution. And besides the biggest losers in the housing market bubble wasn't even the US. It was Western African countries who bought into the mortgage market trying to reap the benefits from the boom.
MikeyA