Mullings.com (Rich Galen)
Bankers and Bookworms
Monday November 24, 2008
Just when you thought we were going to run out of people to make that “shame, shame” signal by rubbing one index finger against the other, comes a front pager in the New York Times about how the home town bank - Citigroup - has bungled and mismanaged its way to accumulated losses in the range of $65y billion.
One of the worst actors in this tragedy is former Citi chief executive, Charles O. Prince III, who should be flogged, and put into the stocks in front of Citi’s New York City headquarters every day at lunchtime for a month and let some or all of the 75,000 - that’s SEVENTY FIVE THOUSAND people who have lost their jobs come and throw bagels bathed in cream cheese with maybe a little tomato and a nice slice of onion at him.
According to the Times article, at a board meeting in September 2007 Charles O. “learned for the first time that the bank owned about $43 billion in mortgage-related assets.” According to the piece by Eric Dash and Julie Creswell, Charles O. had to ask the senior trader of the bank if “everything was O.K.”
Actually, if the losses were only $43 billion everything might have been O.K. But the fact that the head man had no idea that his bank was on the hook for that much is beyond belief. And the fact that the guy he turned to didn’t know - or wouldn’t say - that the losses were about 50 percent higher than he was being told should be a criminal offence.
Another player strutting and fretting his hour upon the stage is one of Wall and K Streets’ favorites, former Clinton Treasury Secretary Robert Rubin who should join Prince in the stocks.
Rubin has been a senior director and “influential advisor” to both Prince and the man who preceded him, Sandy Weill. He makes $17 million a year for his excellent advice and, according to a Citi press release, as of August, 2008 after Prince got canned, Ruben was granted the title of “Senior Counselor.”
Rubin was Treasury Secretary when the rules about what a bank could and couldn’t do were changed. Here’s the thumbnail from the NYT piece:
Mr. Rubin helped loosen Depression-era banking regulations … by allowing banks to expand far beyond their traditional role as lenders and permitting them to profit from a variety of financial activities.
During the same period he helped beat back tighter oversight of exotic financial products, a development he had previously said he was helpless to prevent.
Let’s read that last bit again: The Sainted Robert Rubin “helped beat back tighter oversight of exotic financial products…”
Like mortgage backed securities and credit default swaps and like that.
SIDEBAR
Can we play “Let’s Pretend” for a second?
Let’s pretend that Bob Rubin was not Treasury Secretary for Bill Clinton, but had that job for George H.W. Bush.
Let’s also pretend that Bob Rubin had not been “a senior economic advisor” to Barack Obama’s campaign, but had that job with the campaign of John McCain.
I think, if he were a Republican, Mr. Rubin’s culpability in creating, not just an environment, but the actual rules, which have caused the total collapse of the financial system as we know it … might have gotten a mention somewhere along the campaign trail.
END SIDEBAR
Now, of course, Citigroup execs (not CitiBANK, thank you Mr. Rubin) are in heavy talks with the only organization in the world which can save their bacon, the U.S. Government.
I want to see Bob Rubin hauled up in front of the House or Senate banking Committee to explain what he has done which warrants a $17 million salary?
Yeah. Right.
[snip]
On the Secret Decoder Ring page http://www.mullings.com/dr_11-24-08.htm today: The full “strut and fret” line by Macbeth. ...and:
Links to the stories about Citigroup: The Reckoning - Citigroup Saw No Red Flags Even as It Made Bolder Bets http://www.nytimes.com/2008/11/23/business/23citi.html?_r=1&ref=business
"I have given my soul to the democrat party, and thus, deserve all the I can steal, and expect and even higher position in governemet allowing me more access to public funds, Don't you agree Senators?"
Will Obama be a parallel? That’s the question.
Have we affirmatized the eschaton?