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Archive for November, 2008

The Seventy-Year-Old Teenager

Andy Spero | November 29, 2008 | 0 Comment(s) |

The Curious Case of Robert Rubin

The weekend edition of The Wall Street Journal has a front page interview with Robert Rubin: Rubin, Under Fire, Defends His Role at Citi.

We’ve criticized Citi’s board in the (recent) past, and we’re still particularly fixated on the fact that few directors had financial industry experience.  That seems neither wise nor even prudent for a financial institution with over $3,000,000,000,000 of assets.  (That’s $3 trillion, but we like to write it out for effect, because it seems like a lot of money.)

As… Read the rest

Left Wing Bias: Let's Hope So!

Andy Spero | November 28, 2008 | 0 Comment(s) |

That’s a title we never thought that we would write, but before we chase away our regular readers who share our political and economic world-view, please let us explain: it’s not as bad as it looks.

In Kimberly Strassel’s WSJ column, Hillary of State, Ms. Strassel describes how the mainstream media have now returned to providing a favorable opinion of Hillary Clinton’s foreign affairs qualifications (to be Secretary of State). 

We must admit that that this is the first time in our life that we viewed overly-favorable coverage of any… Read the rest

Good Luck with that: Getting Bank Examiners to Act

Andy Spero | November 28, 2008 | 0 Comment(s) |

This post greatly expands upon a comment we made about regulation in Even A Perfect Bailout Will Fail and possibly elsewhere.

Regulators as wise monkeys.

Today’s The Wall Street Journal has an article entitled, Bank Examiners Are Told to Step Up Sanctions on Lenders.

The first sentence of the article says it all: “The U.S. government’s armies of bank examiners have been ordered to be more aggressive in applying formal sanctions to financial institutions when problems are found.”

Unfortunately, ordering does not make it so, and we doubt that it will… Read the rest

More Evidence of the Lack of Forethought that is TARP

Andy Spero | November 28, 2008 | 0 Comment(s) |

The Wall Street Journal today, November 28, reports Rescue Plan Strained by Lack of Staff.

We’ve criticized the government’s response to both the domestic mortgage crisis and the larger global confidence crisis since it–that which became TARP–was first proposed.  (We use the singular “it” because we’ve not heard any government official decouple the problems either in their initial panic or in the intervening months.)

Since mid-September, other than times when we were too busy to write, our criticism as been consistent, harsh, and steady: (1) initially the government officials, led… Read the rest

The Mortgage Crisis: Why Not Incentivize the Private Sector?

Andy Spero | November 26, 2008 | 0 Comment(s) |

In today’s (November 26) edition of The Wall Street Journal, there is a Deal Journal article entitled, “Paulson Plan: ‘Truly Idiotic.’”

Although we’ve not gone that far in describing TARP et al, we’ve been harshly critical of Mr. Paulson.  In fact, we’ve mentioned that his series of actions don’t seem to constitute an actual plan, because the word “plan” implies a certain degree of, well, planning or foresight and forethought, and those prerequisites seemed absent in his Panic of ’08.

The quoted accuser in the Deal Journal article is Charles Calomiris, a… Read the rest

Happy Thanksgiving!

Andy Spero | November 26, 2008 | 0 Comment(s) |

This year–the founding year of our various independent ventures–we are especially grateful for all that we have and have experienced.

So, we wish a Happy Thanksgiving to our family, friends, clients, and acquaintances (and even to our detractors and enemies, who unknowingly have provided truly invaluable assistance to us.)

However, we can’t offer Thanksgiving wishes without mentioning an excellent column that appeared in The Wall Street Journal three years ago this week.  It was an excerpt of History of Plimoth Plantation, which was written by colony’s governor, William Bradford.… Read the rest

Bill's and Bill's*

Andy Spero | November 24, 2008 | 0 Comment(s) |

Bill’s and Bill’s, Bill’s and Bill’s
It’s bailout time, for the Citi
Plead-a-ling, hear them sing
To-day, it is our bail-out day!

Citi sideways, Wall Street sideways
Dressed in bank hol-i-day style
In the air there’s a feeling of Christmas
Bankers laughing, taxes passing
Wasting pile after pile
And on every street corner you’ll hear…

Trill’s and Trill’s, Trill’s and Trill’s
It’s Christmas time for the Citi
Plead-a-ling, hear them all sing
“We want… Read the rest

Citibank? Bad Bank? Good Bank? How About Our Bank?

Andy Spero | November 23, 2008 | 0 Comment(s) |

Update: Well this post is already obsolete, but we stand by our criticism.  We tax payers should not subsidize Citigroup shareholders.

Tonight (November 23), The Wall Street Journal reports in Bailout Talks Accelerate for Ailing Citigroup that the government is negotiating to be the residual claimant of a separate entity that would house Citigroup’s worst assets and derivative bets.

Citigroup could lose up to $50,000,000,000, and then the government would absorb the losses.  It is kind of like buying flood or hurricane insurance after the flood or hurricane.  (Seems kind of… Read the rest

Should Citi Be Nationalized as a Warning to Others?

Andy Spero | November 21, 2008 | 0 Comment(s) |

Note: We’ll likely expand and edit this post in the morning, but wanted to circulate the idea before bedtime.

We’re rather diligent–but not obsessed– about keeping up with financial new.1  We’ve heard many financial firms announce lay-offs and have read how at a few, like Goldman, senior managers have decided to forgo bonuses.

As we recall, most banks have announced withdrawals from subprime mortgage origination and loans, which seems like a wise move, but given the magnitude of their errors and mistakes, we’re very surprised that we haven’t read… Read the rest

When the Going Gets Tough…Quit.

Andy Spero | November 21, 2008 | 0 Comment(s) |

We very much enjoyed the article, As Firms Flounder, Directors Quit, in today’s (November 21) Wall Street Journal.

The title completely summarizes the content: as many firms have faced financial difficulties, outside directors have quit because they’re “too busy” to direct the firm that they agreed to help direct before it was in such dire trouble.

A week ago Thursday, we wrote The Failure of Boards to Direct in response to a different WSJ article about… Read the rest

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