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CEOs of the biggest bailed-out banks finally appeared before Congress.
Over the course of a seven-hour hearing, there were remarkably few
revealing moments. One, though, stood out. Rep. Alan Grayson, a feisty
former prosecutor, dug his claws into Citigroup's CEO over a deal that
could end up costing the taxpayers hundreds of billions of dollars.
Citigroup, Merrill Receive $21 Billion From Investors
By Yalman Onaran - January 15, 2008 16:11 EST
Jan. 15 (Bloomberg) -- Citigroup Inc. and Merrill Lynch & Co., two of
the largest financial institutions in the U.S., turned to outside
investors for a second time in two months to replenish capital eroded by
Citigroup, the biggest U.S. bank, is getting $14.5 billion from
investors including the governments of Singapore and Kuwait, former
Chairman Sanford Weill and Saudi Prince Alwaleed bin Talal, the New
York-based company said today in a statement. Merrill, the largest
brokerage, will receive $6.6 billion from a group led by Tokyo-based
Mizuho Financial Group Inc., the Kuwait Investment Authority and the
Korean Investment Corp.
Wall Street banks have raised $59 billion, mostly from investors in the
Middle East and Asia, to shore up balance sheets battered by more than
$100 billion of writedowns from the declining values of mortgage-related
assets. Citigroup was propped up in November by a $7.5 billion
investment from the
Abu Dhabi Investment Authority . New York-based
Merrill was helped by a $5.6 billion cash infusion last month from
Singapore's Temasek Holdings Pte. and U.S. fund manager Davis Selected
``The only reason the banks are raising capital from the Middle East and
Asia is because those are the only people who have the excess capital to
lend,'' said Jon Fisher, who helps oversee $22 billion at
Minneapolis-based Fifth Third Asset Management, which holds shares of
Citigroup and Merrill.
Citigroup says gold could rise above $2,000 next year
as world unravels
Gold is poised for a dramatic surge and could blast through $2,000 an
ounce by the end of next year as central banks flood the world's
monetary system with liquidity, according to an internal client note
from the US bank Citigroup.
By Ambrose Evans-Pritchard
4:33PM GMT 26 Nov 2008
The bank said the damage caused by the financial excesses of the last
quarter century was forcing the world's authorities to take steps that
had never been tried before.
This gamble was likely to end in one of two extreme ways: with either a
resurgence of inflation; or a downward spiral into depression, civil
disorder, and possibly wars. Both outcomes will cause a rush for gold.
"They are throwing the
kitchen sink at this," said Tom Fitzpatrick, the bank's chief technical
strategist. "The world is not going back to normal after the magnitude
of what they have done. When the dust settles this will either work, and
the money they have
pushed into the system will feed though into an inflation shock. "Or it
will not work because too much damage has already been done, and we will
see continued financial deterioration, causing further economic
deterioration, with the risk of a feedback loop. We don't think this is
the more likely outcome, but as each week and month passes, there is a
growing danger of vicious circle as confidence erodes," he said. "This
will lead to political instability. We are already seeing countries on
the periphery of Europe under severe stress. Some leaders are now at
record levels of unpopularity.
There is a risk of domestic
unrest, starting with strikes because people are feeling
disenfranchised." "What happens if there is a meltdown in a country like
Pakistan, which is a nuclear power.
It is estimated by Tom
Fitzpatrick, Citigroup Inc analyst, that the gold prices are likely to
climb to over $3,500 per ounce over the next few years, which is more
than double the current price on the market that sits at $1,411.
Fitzpatrick argued on historical and technical grounds that the
long-term trend associated with gold is very bullish, in an interview
that took place with the King World News blog. He has also
predicted that silver will reach over $100 for every ounce which will
more than triple the current rate of $23 per ounce.
Gold has recently been boosted and reached a high for the three month
period that has made it surge past the $1,400 mark. This is mostly
attributed to the fact that investors have become hesitant to purchase
risky stocks at a time when there is potential military intervention
over in Syria.
The prediction of Fitzpatrick is not the typical view of other Citi
analysts, or the official estimate in-house. David Wilson, a Citi metals
analyst stated that his forecasts put gold at $1,150 by the end of this
year and $1,250 by the end of 2015.
Dennis Gartman, a noted investor and longtime bear when it comes to gold
stated that gold is a smart investment with the potential Syrian crisis.
The official bank estimates are varied with the Barclays PLC having a
prediction of gold reaching an average of $1,393 by the end of 2013,
which was on the latest report that was issued on Monday.
During the middle of June, prior to the stabilization in the summer as
well as the most recent upticks, the HSBC Holdings had posted a forecast
ranging around $1,396 for the average of gold in all of 2013. (2014)
Of course : The ones who control the money-Control
the prices of gold and everything else....