CitiBank to lay off and fire 10.000 workers

Citibank is a major international bank, founded in 1812 as the City Bank of New York, later First National City Bank of New York. Citibank is now the consumer and corporate banking arm of financial services giant Citigroup, one of the largest companies in the world. As of March 2007, it is the largest bank in the United States by holdings

Citibank has operations in more than 100 countries and territories around the world. More than half of its 1,400 offices are in the United States, mostly in the New York City, Chicago, Miami, and Washington DC metropolitan areas, as well as in California.

Citigroup (C) plans to lay off and fire at least 10,000 people starting this week and to raise interest rates on millions of its credit-card customers, The Wall Street Journal reported Friday, citing people familiar with the matter.

Executives have told officials to slash their compensation budgets by 25%, the Journal said.

In addition, Citibank is going to announce steep increases in the credit card interest rates and I’m sure we’ll also see higher credit card fees as well. The goal will be to place more “innocent” land mines in front of consumers that they can step on to increase revenue for Citibank.

Consumers can opt out of the rate increase, the Journal said, and will be able to use their credit cards until their expiration. This follows a similar move by American Express
(AXP).

The Journal also mentioned that Citigroup called “completely erroneous” its report that the firm was considering replacing Sir Win Bischoff as chairman, but it said it stood by the article and that people familiar with the matter said the move was still being considered.

American Express to Be Bank Holding Company

American Express (NYSE: AXP), sometimes known as "AmEx" or "Amex", is a diversified global financial services company, headquartered in New York City. The company also has major offices in Fort Lauderdale, Florida; Salt Lake City, Utah; Greensboro, North Carolina; and Phoenix, Arizona. The company is best known for its credit card, charge card, and traveler's cheque businesses.

American Express agreed to Be Bank Holding Company

American Express announced today that the U.S. Federal Reserve has approved its application to become licensed as a bank holding company and to be regulated by the Federal Reserve.

Qualifying as a bank holding company will provide American Express maximum flexibility and stability in this challenging economic environment. It aligns American Express' regulatory status with other companies in the financial services industry, further diversifies the Company's funding sources and access to capital, and provides opportunities to expand its deposit-taking capabilities.

American Express had already operated a commercial bank and a savings bank supervised by federal regulators. But the bulk of its assets were not in those institutions. As a bank holding company, these assets are now under federal supervision, a move that expands the amount of financing it can request from the government. That means the bank could qualify for up to $3.6 billion of the Treasury Department’s money, instead of just a small portion.

His announcement came as American Express reported a 24 percent drop in third-quarter profit and said it would slash 10 percent of its work force as it prepared to write off a larger pool of credit card loans. American Express wrote off about 5.9 percent of these loans in the third quarter.

How Barack Obama to cure Subprime Mortgage Crisis

US citizens will face their election on 4th November 2008. Who will become the president? Barack Obama or John McCain ? Who will be elected, one thing sure to do is to solve the US Economy, including the subprime mortgage crisis.

What did Obama do to help create the subprime debacle? Well, Obama joined with a group of other Chicago lawyers who bullied and threatened area banks to loan money to poor minorities who couldn’t afford the mortgages.

Barack H. Obama is running around telling everyone that the housing mortgage market collapsed primarily because of some vaguely described “deregulation” that took place sometime under George Bush–or maybe under Clinton; I’m not clear on that. I’m not sure he is.

Whatever his claim is, it’s a lie.

The reality is that the housing market collapsed in large part because a coalition of race-baiting bullies brought very heavy pressure to bear on the banks to make more subprime loans on properties in low-income communities. Those who didn’t approve the risky subprime loans were accused of “redlining”–i.e., refusing to make loans on properties in those neighborhoods.

Who were these bullies?

Some of the bullies were out in Washington pounding the tables and screaming at bank executives about “redlining”.

At the same time, other bullies were stalking big city courthouses, filing frivolous and extortinate lawsuits against banks based on novel “disparate impact” theories of what might be held to constitute “redlining.” In other words, even banks which were making lots of loans in low-income communities were being sued if they weren’t approving just as many loans in low-income communities as they were in high-income communities.

Here is a short video from Democratic presidential candidate Barack Obama in which he promises to create a ten million dollar fund to help keep people in their homes and a tax deduction for homeowners who do not itemize on their income tax returns.

Things that You Never Want To Tell A Mortgage Company

Yes it is important to be honest when speaking to a mortgage company, however when you are starting or in negotiations with a mortgage lender in an attempt to stop or delay a home foreclosure there are some facts that you should never tell your mortgage company.

Personal Finances
Never discuss your household finances over the phone with the collection department. What you don’t know is that you are being qualified and not know it. This is the easiest and fastest way to get a turn down. Request a homeowners assistance package so that you can submit the require information.

Cash Flow
Never tell them you are broke. Even though you may qualify for a special forbearance or modification, you will still need legal fees and foreclosure cost. These fees cannot be put back into the loan. Your lender prepaid them to their attorney to start the foreclosure process.

Not Living In The Property
Never tell them you do not live in the property. Under FHA guidelines, before you are granted any workout, you must reside in the property. If you have moved out and your property became an investment property, you better get someone in there with a lease or rental contract before the sale date.

Employment Status
Never tell them you are not working, in most cases you will not be approved. Depending on your sale date, your mortgage lender may not be able to qualify you for a special forbearance because of the amount of time left. If you can’t find a job, I suggest you start a small business months before your sale date, make some money, deposit your income and prepare a Profit and Loss Statement to prove income. Telling them you get paid cash and you can’t prove it won’t hold water.

Money Management
Never admit the reason you fell behind is because you mismanaged your money. How do you expect for them to give you a workout when you still have the potential of falling behind again?

It is important to be honest with a mortgage lender, it is also imperative that when speaking of personal financial details you are giving such sensitive information to the correct department and person.

The manner in which your personal information may be used to either help or hinder your efforts to stop foreclosure is not always used in the same way.

If you are behind on the mortgage or the lender is starting foreclosure proceedings now is the time to act, and I mean act fast. Educate yourself on what the foreclosure process is and how it will progress. Learn who you need to talk to and in what order you should contact them. What other options are available instead of simply allowing the lender to foreclose and sell your home. Check out The Foreclosure Survival Handbook for answers to all these situations.

Dollar Rises Against Euro in Europe Global Crisis

The euro and dollar dropped to fresh multi-year lows Friday as emerging markets continue to flush investments with heightened fears of global recession.

The euro fell to a new two-year low of $1.2496 overnight and nearly a six and a half year low of ¥113.79. The dollar dropped to a 13-year low of ¥90.87.

Now one would think that the dollar, viewed as the source of much of the world's commodity price inflation this decade, rising from long-term lows would be a cause for celebration.

Not exactly.

While the dollar's rally against most of the world's other major currencies does mean commodity price pressures are likely to continue to subside -- and that's good news for inflation, economists say -- the dollar is nevertheless rising for the wrong reason. Namely, an economic slowdown in Europe.

Euro, pound plunge on recession concerns

"It's not so much as the dollar is strengthening but that the euro and pound are weakening on the likelihood that central banks in Europe will have to cut interest rates more to deal with a recession," economist Peter Dawson said. "Europe is also seen as later in the business cycle than the U.S., which means the U.S. economy is likely to recover sooner, which also helps the dollar. "

The dollar took full advantage of that sentiment Wednesday, surging two cents to $1.2837 versus the euro and three cents to $1.6407 versus the British pound. The dollar also rose 1.6 cents to $1.1672 versus the Swiss franc.

However, the dollar fell one yen to 98.91 versus Japan's yen on the relatively stronger Japanese economy. Japan's banks have only modest exposure to toxic assets, one major reason why risk averse investors are seeking out the yen, Dawson said.

Dawson's outlook for the dollar heading into Q1 2009? "The dollar will continue to strengthen. The focus in Europe and the U.S. has to be on stimulating the economy, and that includes more interest rate cuts, along with fiscal stimulus, and other measures," he said. "The U.K. and European Union are not likely to complain about their currencies weakening. They'll probably secretly cheer it because it will make their exports cheaper."

Forex / Economic Analysis: Indeed, all dollar rallies are not alike. And as economist Dawson noted, the focus on all continents is on jump-starting economies. The euro and pound will fall, since the two currencies strengthened to extreme levels during the commodities boom -- one of the major, unsustainable imbalances that existed in the global economy.

Fannie Mae Freddie Mac take over by government

What are Fannie Mae and Freddie Mac

Fannie Mae is the nickname of the Federal National Mortgage Association, while Freddie Mac is the Federal Home Loan Mortgage Corp.

Fannie Mae is the older of the two. It was created as a government agency in 1938 under U.S. president Franklin Roosevelt's New Deal. The idea was to give local banks federal money to finance home mortgages, since private lenders were leery of lending money. The government wanted to help more people buy homes, and encourage the building of affordable housing. In 1968 it became a private company.

Freddie Mac was set up in 1970 to expand the secondary mortgage market, and ensure there was competition with Fannie Mae's monopoly. Both companies buy loans from banks or mortgage firms, and re-sell these as mortgage-backed securities. Together they own or guarantee about half of U.S. mortgages.
The two were put under "conservatorship" by the U.S. Federal Housing Finance Agency on Sept. 7 - essentially a takeover by the government.

UK bank bail-out 64$ Billion to HBOS Barclays and Royal Bank of Scotland

Britain waded in with 37 billion pounds ($64 billion) of taxpayers' cash to bail out three major banks on Monday, in a move that could make the government their main shareholder.

Royal Bank of Scotland (RBS.L) said in a statement it will boost its capital by 20 billion pounds, including the UK government taking 5 billion pounds in preference shares and 15 billion pounds underwritten by the government.

HBOS (HBOS.L) and Lloyds TSB (LLOY.L) will also participate in the government scheme "upon successful merger," the Treasury said in a statement on Monday.

Barclays (BARC.L) said in a separate statement it would boost its capital by more than 6.5 billion pounds but expected to do so without government help.

Finance Minister Alistair Darling said extreme times called for extreme measures and that he was prepared to make even more money available if necessary.