We're all intrigued by the debate in Mexico over whether the huge public stake in Citigroup means the bank is essentially owned by the U.S. government and therefore cannot legally operate in Mexico. The Financial Times reported on the issue Tuesday, saying Mexico could force ailing Citigroup, which "eked out" a $101 million profit in the third quarter, to sell its Banamex (Banco Nacional de Mexico) subsidiary.
Already, Citi is among "the banking system's weakest links," as Paul Krugman wrote Sunday. Banamex accounts for 15 percent of Citigroup's global profits and is estimated to be worth $20 billion, according to the FT. It also "makes up the biggest part of Citigroup's Latin American portfolio," Marketplace reported in a segment on the controversy aired Monday.
Apart from the implications for Citi shareholders, the dispute highlights the awareness abroad of the extraordinary government interventions in the storied American free market, a phenomenon, it seems to me, that many Americans haven't fully understood (or emotionally accepted). Mexicans, who still celebrate the nationalization of their oil sector, know a nationalization when they see one. But here in the U.S., few see President Obama as not only commander-in-chief of the U.S. military, but also CEO of its largest banks, automakers and insurers.
Like the saying goes, "If it walks like a duck and quacks like a duck".... Is it a duck?
No comments:
Post a Comment