RUSH: ‘Citigroup reported…’ Let me check the price here for Citi. What is it? Well, they’re up above two bucks, two bucks and 11 cents. They were just under two bucks on Friday. The Dow Jones Industrial Average down 119. There is absolute… No matter where you look in the market, which is where the real polling data is on all these plans coming out of Washington, you don’t find anybody that is confident. You don’t find any institution that is confident about what is happening, and now this. ‘Citigroup Inc. is reportedly negotiating with government officials to have the US [government] boost its stake in the troubled bank to as much as 40 percent…’
That’s 10% shy of nationalization, which the Obama administration said last week, ‘No, no, no, no, no. We’re not thinking about nationalizing banks. Oh, no, no, no, no. No way.’ Of course, those statements of Obama’s all have expiration dates. ‘Such a move by Citigroup would result in the New York-based bank ceding far more control to the feds than executives likely desire, and would dilute shareholders’ investments. The Journal, which said Citigroup made the proposal to its regulators, noted that sources say executives would prefer to keep the government’s stake closer to 25 percent.’ Twenty-five percent, 40%, 5%, what the hell difference does it matter? We’re going to get more Fannie Mae, Freddie Mac. Fannie Mae and Freddie Mac were sold to us as ‘private-sector institutions’ that were owned by the government. That is not possible, and we see what happened with both of those.
They are at the root of the housing problem. By the way, the mortgage thing just continues to percolate out there. There are more and more people getting fed up that they are going to be bailing out people who refuse to, or never could, pay their mortgages. Do you know that this is a five-state problem? Do you know this mortgage business is a five-state problem? By the way, Citigroup, before I move on from this, Robert Rubin from the Clinton Treasury department used to be at Goldman Sachs and he goes over to Clinton. He leaves there, goes to Citigroup as the big savior, and resigns after taking it into the toilet. So you have Citigroup run, owned, and operated by Democrats. You have Fannie Mae and Freddie Mac run, owned and operated by Democrats. You got Goldman Sachs, mostly run and operated by Democrats. Does anybody see a pattern here?
Some of this stuff, it’s just too incredulous to believe that all of this is coincidence. Let me find these five states. These five states where most of the problem is. Here they are. Nevada. You tell me, by the way — when I go through these five states, except for one of them, you tell me — that the people in these states are dirt poor, that these are the people who are just unfortunate losers in life’s lottery. Nevada. You know people move to Nevada and Las Vegas and Reno for the anticipation of big bucks. Do you know what’s happening to the business meetings industry, the golf industry? I have a friend. Now, get this. I have to check. I want to make sure I get the company. Yes. Well, I’m not going to mention the company, ’cause if I did, it would give away the place. I don’t want to give away the place.
It’s a big resort. There is a Wall Street firm that every year plans a giant week-long seminar to teach people how to make money, their clients and customers. Now, what happens is that they bring in these people, like a hedge fund conference, and it generates a lot of money. They charge $3,000 a person to come in, stay at the resort, and listen to experts testify how they can make big money. This Wall Street firm canceled at a full penalty. They had to pay the resort the $1 million. The resort is going to get the $1 million. They put that in the contract, because they had to book practically the whole resort, and they couldn’t book anything because these guys had taken it all up. The cancellation came too late to open it up. So they had a rider in the contract that if you cancel and you don’t do this, you still have to pay the full boat, which is a million dollars.
So the Wall Street firm (this is this year) paid the million dollars and they took the loss, all to make sure that nobody knew they went. The only reason they canceled is ’cause they didn’t want it getting in the news that they had gone to the resort to conduct a three- or four-day seminar on hedge funds and how to make money in them. They thought it was worth losing a million dollars to avoid press coverage! Now, this is fear, because if you are taking bailout money — and this bunch is, if you’re taking bailout money — and you’re getting dragged up, your CEO is getting dragged up to face Barney Frank and Chris Matthews, and then the president of the United States gets on his high horse and starts ripping you a new one, it’s probably worth it to you to throw away a million dollars and cancel your money-making seminar.
It’s a profit center that they do. Cancel it because it’s at a big resort, so nobody knows you had it, because you didn’t have it. You didn’t do it. It’s fear and paranoia, not just of the public but of our elected officials, fear of government. Now, these are the best and brightest titans we supposedly have on Wall Street — and I’m going to tell you, folks, if they are scared to death to the point that they will throw away a million dollars to avoid ‘bad PR,’ quote, unquote, can you imagine the kind of fear that’s going to be engendered in the hearts and minds of average Americans or that could be generated in the hearts and minds of average Americans? Now, other resorts are also getting these kinds of cancellations, but some of them do not have contractual riders that say they get paid anyway.
The golf resort business is way down. Any of these giant resorts around the country where big meetings are held to facilitate business all because of these AIG guys after they got their bailout, they went out to some spa someplace and the PR. It just infuriates me that this kind of silly public relations and the holier-than-thou attitude of people who have never done business with any of these firms can get this whole thing shot down. I mean, everything in this economy is under assault; it’s being slowed down or targeted. What about…? What was it, Merrill Lynch, 1.2 million to redecorate an executive suite, all hell broke loose, $1.2 mil. That was before TARP money, and that was considered so bad that the CEO gets canned.
So now here’s another Wall Street firm throwing away $1 million on nothing. Nobody got anything for it. There was no stimulus, other than the resort got its million dollars. But none of the employees of the resort got any tips; the restaurant didn’t have any customers. They got their booking fee but they didn’t get what they were going to get had all the people shown up. How silly is this? How absolutely stupid to throw away $1 million to avoided the bad PR. Anyway, here are the five states with the leading number of foreclosures. Nevada number one. California number two. Arizona number three. Michigan number four. Michigan’s the only one of these states with what you would consider to be in dire straits. Well, California as well. It’s a mess out there. But you don’t think of California as a state such as New York or others with just everywhere you look, massive, rampant poverty. And then number five is Florida. Number five is Florida. In most of the United States this mortgage, quote, unquote, crisis seems pretty manageable, but five states are weighing us down.
In Nevada, the mortgages underwater are about 48%. In California, 27%; Arizona 29%; Michigan, 38.6%; Florida 29.2%. Those, of all mortgages in the state, those are the percentages underwater. What do you think New York’s percentage of mortgages underwater is? It’s 4.4%. The national average for mortgages underwater is 14.7%. Nevada 47 or 48%, 27% California, 29% Arizona, 39% Michigan, and 29% Florida. So it’s not a nationwide problem, is the point. It’s not a crisis that’s affecting everybody nationwide, but it provides photo-ops and sob stories for the Obama administration to go ahead and make this a big national concern and a sense of duty that we pay for these poor people who had no business being given loans in the process.
RUSH: I want to give you something to think about. Those five states that I just read — California, Arizona, Nevada, Florida, Michigan — with the highest foreclosure rates, not so sure about Michigan, but could be, but all those states have an inordinately high percentage of illegal immigrants. Now, the next question is, are we giving mortgages to illegal immigrants? I guarantee you there will be a lot of people who don’t live in those states who would be stunned to learn that illegal immigrants are getting mortgages. I know exactly what the no verification thing was all about. It wasn’t just about illegal immigrants. It was making sure the poor got in there regardless the reason they’re poor. Now, not every illegal immigrant had a mortgage, but in these states — I guarantee you, you throw that into the mix for people that even that live in those states, who know it, but I mean you throw that into the mix with people that don’t live in those states, to find out not only are we — (laughing) — sorry to laugh, folks.
It isn’t funny. But what the hell else are we going to do here? When you throw in the fact that we’re bailing out, you are perhaps paying the mortgages for illegal immigrants in addition to welfare for them and health care for their kids, when you find out how money — we don’t know what the percentage of these foreclosures that people are going to be exempted from, happen to be illegal immigrants, you think that might start a little, what we call a ‘Rush fire,’ around the country?