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Long Live the Financial Supermarket
Long Live the Financial Supermarket
This is an interesting piece in the WSJ that details why Citi find itself in the position is it today. More importantly to me was this statement at the beginning of the article:
"Somewhere in his memoirs, Henry Kissinger confides his judgment that small, vulnerable nations breed the best statesmen (he cites Singapore's Lee Kuan Yew and Austria's Bruno Kreisky), whereas big, powerful countries can get by with mediocrities."
That statement hit me like a ton of bricks.
Thoughts?
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I gather from my reading from other sources that when C went to the trough for the second time, Sheila Bair (FDIC chairwoman) told them that further requests for Fed money would mean REGULATORS would do the break-up for them. At least C is doing it on its own terms this way. They also have a new CEO who has long fought for the break-up of the company. I'm sure he wishes it wasn't doing so at bargain-basement prices.
There is some hope with the recent Morgan Stanley buy-out (it was for 51% of MS.)
A joke I saw on the Internet: What do you get when you cross Citigroup and Morgan Stanley? "Citi-Morg" Hopefully, that doesn't ring true for them. The Morgan Stanley deal should provide Citi with some much needed capital infusion.
Here's a chart from a NYT piece on the break-up:
Big picture: I smell new anti-trust litigation and laws in the air. I'm sure the Feds will continue to throw around their weight when banks come asking for more TARP money, just as it did w/ Cit. I also sense an overturn of at least part of Gramm-Leach-Bliley.