This makes total sense. Right?

The

WSJ

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estimates CitiGroup's exposure to Dubai World's defaulted $80 billion (est.) debt

. The beauty part is Andrew Sorkin's

(in the

NYT

) that Citi lent $8 billion to the palm-island-building megajoke last Dec. 14, shortly after the U.S. government pumped $45 billion into the ailing banking conglomerate. As Sorkin notes:

A ridiculous gamble? Perhaps. Much has been made of the idea that "everyone" figured Abu Dhabi would bail out its oil-less (yet somehow oilier) brother state in the event of a default. But what is overlooked in this timeline is that Citi is

already partly owned by Abu Dhabi

, having sold part of itself in November 2007 for $7.5 billion to the oil-rich medieval sheikdom, whose "royal family" thereby became CitiGroup's

, displacing Saudi Prince Alwaleed bin Talal.

As

Reuters

reported at the time:

On the day of that report, Citi's stock traded at $29.80 per share. Today it's about $4.10.

The Abu Dhabi family is not likely to be concerned, however: Even though their warrants are pegged at $33 a share, Citi is paying them 11 percent annual interest on that $7.5 billion investment.

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That's $825 million a year.

To recap, then: Abu Dhabi sheiks invest $7.5 billion to own 4.9 percent of Citi, securing an $825 million annual income stream (so long as the U.S. taxpayers have blood in their veins). Citi

returns the favor a year later by raising $8 billion for Dubai's "public sector entities."

Can you say "bailed state?"

It seems obvious enough who loses on these deals, but who comes out ahead?

Perhaps coincidentally, oil prices began their manipulated run-up from $75 per barrel in October 2007 (just before the Abu Dhabi stake in Citi was announced), to $137 per barrel in July 2008. Among the winners in that scam was Phibro, a then-little-known oil-speculation business nested within Citi's corporate structure. In 2008, as Citi lost $30 billion or so, Phibro scored about $600 million in profits. Citi

this fall for $250 million amid political pressure relating to Phibro chief Andrew Hall's traditional $100-million-a-year pay package.

Reportedly, Hall will get all his pay, just not all at once.

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