Citi of Arabia

That is, I swear, the title of an editorial in today's WSJ. It's an amusing read. Apparently the WSJ believes in free markets up to the point where the markets do something that they don't like. Like having shifty Arabs buy up our good assets. Harsh? Judge for yourself:

Abu Dhabi's 4.9% stake combined with the 3.9% stake of Saudi Prince Alwaleed bin Talal makes them the bank's dominant shareholders, and who knows how many other smaller holdings are in Middle Eastern hands. The small Gulf states may be governed separately from Saudi Arabia, but they are closely linked by geography, family ties, and national interests. For purposes of political influence, they often behave as part of the same tribe.

Got that? "[S]ame tribe." Nice. And these are just the big deals. Who knows how many other Arabs from the same tribe have bought little pieces of Citi - hell, Arabs may own all of it for all we know! And if they own it they'll use it... for what exactly?

and it offers a Middle Eastern entree into the U.S. financial system that since 9/11 plays a pivotal role in the war on terror.

Ah, yes, they'll have an entree into the U.S. financial system which up until this time has been great at stopping Saudi Arabia and others in the tribe from funding terrorism. WTF? Note to the WSJ: they really don't need the U.S. financial system to fund terrorists.

And, on top of all the other nonsense, the editorial uses a weird phrase:

Citigroup did have to shore up its balance sheet, and we suppose petrodollars are a better source of capital than U.S. taxpayers under a "too big to fail" doctrine. On the other hand, where were Mr. Rubin and the bank board when Citi was betting so much on subprime?

Did you catch it? How in the hell is that an "On the other hand"? It's my understanding that when one uses those words, it indicates that you are making a counterpoint to your previous statement. Most of the time it wouldn't be a big deal and I'd let it go, but it stuck out for me because they do it again later in the editorial:

Readers of these columns might recall in particular Abu Dhabi's adventures in Beltway banking. It was Sheik Zayed, the father of the current ruler of
Abu Dhabi, who owned the infamous Bank of Credit and Commerce International, or
BCCI, whose fraudulent tentacles spanned the globe, including the highest levels
of Washington politics a decade and a half ago.

The current emir, Sheik Khalifa bin Zayed al Nahyan, is not his father -- who always maintained that he was a victim of the BCCI fraud himself. And Robert Morgenthau, the Manhattan District Attorney who investigated BCCI, tells us that Abu Dhabi "has been responsible" since BCCI.

On the other hand, the bank was forced to settle for hundreds of millions of dollars after lying to evade American banking laws. Mr. Morgenthau also recounted that the elder Sheik Zayed once called to inform the State Department that, if Mr. Morgenthau indicted anyone in the royal family over the scandal, he would pull his billions out of the U.S. and make no further investments here.

So in the 80's, al Nahyan's father led BCCI. However, al Nahyan is not his father, and Abu Dhabi has been fine since BCCI. On the other hand, in the 80's his father was a crook and said unpleasant things.

If this was an off-the-cuff speech maybe I'd understand, but I'd expect someone proofread this. Perhaps I expect too much.

One last thing to keep in mind, the next paragraph after the excerpt above reads:

Mr. Morgenthau says this message was passed to him via the Justice Department. His reply: "Tell them that you don't control that cranky S.O.B. in New York." As a long-time New York DA, Mr. Morgenthau could stand up to such political pressure the way the Justice Department might not. In certain corners of the world, large investments come with political expectations.

"The way the Justice Department might not." Truer words were never written on in a WSJ editorial. When it comes down to our safety, or the profits of the friends of highly placed Republicans, even the WSJ knows what the score is.