Rescue me … Citibank and Banamex

Here’s a story you probably WON’T read north of the border.

Mexican banks can be (and are, except for Banorte) foreign owned, but foreign governments cannot be shareholders.  So, what happens when — under the latest rescue plan (#3 in a series of ??) — the United States government becomes a shareholder in Citibank, whose only profitable unit right now is Banamex?

Citibank and the United States government are going through contortions to claim they’re not nationalizing the bank and Citibank is having to deny that they’ll be forced to sell off their only profitable unit so they can get the cash to keep operating.

The PRI senses a political opportunity in this, ahead of next years elections when they’re expected to return to their former position as majority party, based on growing dissent not just from the Calderon Administration’s bungled “War on Drugs” , but on issues like this, where the present administration is tarred with being too accommodating to foreign — specificially U.S. — interests.  Attacking the big banks is usually the PRD’s issue (its one of those things that won Andres Manuel Lopez Obrador a national following), but here the PRI can defend a big Mexican insitution (Banamex) with the added bonus of tapping into the always crowd-pleasing anti-gringo nationalism.