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The CEO of Citigroup, Vikram Pandit, gave a lecture to finish the first day of the National Summit in Detroit. The purpose of the summit is basically just a meeting of the minds, business, economic and government leaders, to develop strategies to keep America competitive in manufacturing, energy, technology and the environment. Citigroup has been under a lot of scrutiny for the manner their business has been handled, negligent loaning and collecting so much TARP funds, which has too arguably been mishandled.

In synopsis, Pandit told the crowd that America needs to accept the fact that tighter credit is just going to be the norm now. He says we are in a new world where borrowing will be harder, loans will be harder to obtain, and stricter, more steep, credit is just going to be the state of affairs, even subsequent to the fiscal market has improved. ?U.S. spending and credit construction were the two main drivers of development. The world desires new drivers of growth ? and a new business model,? Pandit told the group at the summit.

He said he expects loans to be more limited and costly. Those lesser APRs are a fixation of the past in his eyes and even as rally occurs, banks will be vigilant with paying out loans, almost to a burden. He also wants corporate reorganization over a quantity of industries. He agreed that Citigroup has received ample support from the state and praised ?strong state action? for the place they are growing themselves back to. He in addition talked about that Citigroup has updated its business plan, reducing costs by 25% and labor force by 20% as well as dwindling their confidence upon credit and utilization.

He also held responsible the credit critical situation on free-for-all banks that he accused of being a ?shady banking organization? that packaged wholesale money into student loans, home mortgages and credit cards, a format that was responsible for over half of credit over the last five years. Pandit also blamed the ?shadow banking system? for a large credit gap when that market fell apart and credit was withdrawn.

It is obvious that we are in a new age of credit with more regulations on credit cards that will bring about credit issuers to put into practice new fees and amplify APRs and shorten credit, at least for a time, but are we in fact to the point where we can no longer rely on credit? That may also fail, because you will see less consumers worrying concerning their credit scores and financial institutions will lose money from lack of credit issuing. Streamline all you want, but no financial institution can rely so little on profit from borrowing that they will be able to tighten credit that much. It sounds like another one of my infamous ?self fulfilling prophecies?, as the credit market will ?cut off its own nose to spite its face? and the financial institutions will forbid themselves from further growth. What do you suppose?

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