c1ue

Reconsidering Citigroup: The Middle Line And 3D Marketing

I'm no expert, but my suspicion is that having consumer banking will be a net positive should the liquidity glut dry up.

At present money is very cheap to come by - due to Fed policies.

However, it is not very difficult to see a scenario where the present spending/negative savings scenario reverses both on the consumer and the commercial front. One of the bigger probabilities for this to happen is a collapse in the dollar - which in turn would drive interest rates up due to inflation increasing.

While this certainly would impact the lending side (and M & A, and securitization, etc) parts of the big bank financial models, I do wonder whether this is more or less adverse than a lack of credit to extend.