New York Luckily our annual “relationship” meeting with Citigroup was the day after they announced more multi-billion losses, layoffs, and restatements. Clearly, we were slipping into the building between the seams. Things looked somewhat normal, but people were still waiting for more shoes to drop.
The news was sobering in many areas. Citi shared that their own economists now were predicting that home values would decline by 4% annually on average in at least 2008 and 2009 and it would 2010 before any uptick in housing markets would be felt. Ironically, but perhaps not surprisingly, ACORN Housing shared that they were going to increase the loans coming into Citi because retreats by other partners had made Citi now the best product through our channels. New reports similarly indicated that the only positive economic indicator was that demand for new housing mortgages was now higher from consumers than it had been in four years, probably driven by price adjustments that are prompting some people frozen out of the market based on affordability to try and get back into the game.
A headline in the papers had been “World Comes to Rescue Wall Street” with the story that follows detailing the far eastern and Middle Eastern new investments in Citi and Merrill Lynch to shore up their balance sheets. Citi seems to see most of its good news in its business coming from its international footprint, and it is a safe bet that more of their hopes and investments will move to increase their footprint in that direction than here on the home front.
There was progress in the meeting.
The housing numbers were good and our loan portfolio with Citi was still ahead of the national default and foreclosure curve, and we were committed to keeping it there. The New York development programs were ramping up. The foundation made us all blush by reporting that the Citi Foundation board believed by a wide margin that the grant to ACORN for the tax and benefit centers was the best performing investment that the foundation had ever made and by a large margin.
In the new Citi world where it is all about performance, perhaps there is an improving future for us there, since we believe in the same thing.