In response to Citibank’s Pandit’s statement about Citibank posting profits for the first 2 months of 2009, I think this is nothing but a coincidence. This started the 4 day rally we had in the market this week. This is not to say that their bank will fail but it means that don’t expect Citibank to post profit every month this year, especially with credit card debt rolling in from the rising number of delinquencies. Foreclosure are to housing as Credit Card Settlement + Bankruptcy are to credit cards.
I can go out and spend all the $100k credit limit on my plastic in just a few days. I can make things look really good for a month or so until my payment is due. When the time comes to pay I will be in one serious world of hurt (inflation).
That is what we just did over the past two months. Pretty soon that bill is going to come and I have no idea where Obama thinks the money is going to come from. China doesn’t really want to pick up the tab as China’s Wen Jiabao has communicated today and nobody else can.