Bush and big U.S. banks beg for help from the oil barons
Bush has been doing some fast talking in the court of Saudi Arabia’s King Abdullah, imploring His Majesty to boost oil production to so that gas prices for U.S. consumers can come down in time for the fall election.
As part of his charm offensive, Bush has promised to bolster the dictatorship’s arsenal with “900 sophisticated satellite-guided missiles.” He also rattled his tattered saber against Iran, Saudi Arabia’s archenemy.
While Bush and the King talk bombs, oil, and war amid the bling of the royal family’s “lush horse farm,” bankers over on Wall Street are squirming to get their paws on a few (billion) of the petrodollars that are swelling Saudi coffers.
Citigroup — the world’s largest bank — Merrill Lynch, and now JP Morgan Chase have all admitted to staggering, multibillion-dollar losses from the ongoing subprime mortgage meltdown. To keep themselves in business, these giant institutions are essentially selling chunks of themselves to foreign governments and other mega-investors in exchange for massive “capital infusions.”
The trend may be in its early stages. No serious observer thinks that the big U.S. banks have come even close to fully reckoning with losses from the subprime debacle. And then there’s the looming specter of credit-card debt: these same institutions are crossing their fingers that strapped U.S. consumers can keep up with their massive credit-card bills as we edge into recession. If not, expect yet more epochal losses for for the big banks.
And more begging, as well. Among the gilded doors Wall Street’s finest will be knocking on are those of the Saudi royal palace. (Prince Alwaleed bin Talal is already a major and influential Citigroup shareholder.) Other Mideast oil barons should also brace themselves for pitches from Wall Street. Citigroup has already gotten a tidy $7.5 billion from the Abu Dhabi Investment Authority, run by an oil-producing arm of the United Arab Emirates.
Not only do we depend on the benevolence of Mideast oil producers to run our cars, but also, increasingly, our banks.