As the Citi Sleeps

As I watch my bank die, I ponder all of the consequences of it as I have now grown accustomed to its stellar online services and being a beneficiary of its free services. I for one am not sure how I will survive without my free interbank transfers which I use on a regular basis. I have had accounts at many banks over the years, but no one has had as great a website as Citi. In addition, they have long combined all accounts, whether asset or liability, banking, brokerage, credit cards and savings, to figure your total worth to them which in turn determined your monthly checking account fees. Both my husband and I came into our marriage with varying forms of Citi accounts that once combined practically guaranteed that, for the most part, we would enjoy free checking, a nice benefit for us poor folks who would never qualify otherwise since we would never have the rather hefty account minimums required. 

Over the years we have been fortunate to save quite a bit in fees. Odd things would happen though, if we paid down our credit card, this would reduce our stake dipping us into to monthly fee territory or when we moved our brokerage account to a discount online broker dipping us into monthly fee territory again. Then one day, our mortgage having been sold multiple times eventually landed at Citi. At first I was not excited to have that much exposure to Citi after they had gone through a rather irksome period a while back when they seemed to snub their noses at their less than wealthy account-holders. I even cancelled my citicard because they p'd me off. But I was back on track when it came to light that by merely linking our mortgage account to our checking account, the amount of our worth to Citi would guarantee free checking for life so I changed my tune pretty quickly though having to see the entire mortgage amount staring me in the face everytime I log on sometimes is a little disconcerting. 

Now the powerhouse Citigroup stock is less than $5 and they are thinking about selling themselves. No amount of Saudi investment and countless billions in bailout funds has been able to help them stave off the devastation caused by that 3-word financial instrument that keeps rearing its ugly head; credit swap derivatives. They will be the bane of our existence because they are difficult to understand and impossible to comprehend. And ironically, Treasury Secretary Henry Paulson's decision to jettison the fundamental intent of the TARP bailout by not purchasing those toxic assets from banks dealt another decisive blow to the Citi umbrella. 

What will happen if they choose to sell themselves in part by spinning off vital assets like the credit card business or the mortgage business? What will happen if they choose to sell themselves in whole? Whatever happens, the world will change for me, spinning off any assets will reduce by stakehold, my worth to Citi or if Citi sells itself and ceases to exist, I will have a new bankmaster. In any event, I will most likely lose my free checking privileges. 

Boy, it can be very easy to start protecting the monster when it serves your purposes. If I was on the other end of the stick, I would surely be spouting off about how they deserved their fate in varying degrees of negative yada, nay-yada. But now as I watch my bank fail, I realize that they have somehow been good to me and I will be sad to see them go especially when I have to start paying those monthly fees again.