Salmon or Steak, Sir?

Renovations of the executive offices at Citibank continue apace. The executive dining room is still open for business and the hard-working team that drove the bank into the ground will still be flying first-class. No word if the Citi wizards have decided to turn aside their bonuses. Perhaps the Compensation Committee of the Board of Directors can address this matter in private.

The Loan Sharks


No business is more reprehensible than the modern credit card industry. It's been a scandal for at least 20 years and now it's all about to come crashing down. Joe Nocera has an insider's view of the usury game and how its played by modern bankers.

URL of the Day

Can't keep all the bad news straight? Need one place to go to collect your daily dose? Look no further, Ellisbloggers! The Bank Implode-o-Meter is here.

From Bad to Worse

I think we're supposed to feel relief that Citi has been "saved" and that the financial system is therefore still "operative." But a quick glance at the terms of Citi's bailout package gives one a feeling of sea-sickness. It's a terrible deal and the political reaction against it will likely be ferocious, especially on the right. If you put this deal in front of the US House right now, it would probably lose 4-1.

That current management gets to stick around to manage this disaster is perhaps the biggest insult of all. That their "bonuses" are even discussed in the terms sheet is beyond belief.

Please Remain Calm

On day two of Citi weekend, Meredith Whitney addresses some of Citi's "issues." The New York Times looks back at how Citi managed itself to the brink of ruin.

Citibank has full page ads in this morning's local newspapers, headlined "Providing Stability. Securing the Future." The epitaphs of a once-mighty organization that will soon be sold off for parts.

Another One of those Weekends

In March, we had Bear Stearns weekend. In September, we had Lehman weekend. Unfortunately, we now enter Citi weekend, which is considerably more dangerous than the previous two. Clusterstock has been all over the Citi collapse story and they provide a good overview of what Citi weekend holds in store. It's grim and grimmer, basically, and an AIG sequel appears to be the most likely scenario.

His First Mistake

Peter Baker, arguably the most reliable Washington reporter around, reports that Hillary Clinton has decided to accept President-elect Obama's offer to serve as Secretary of State in his Administration. No drama Obama just bought himself a boatload of trouble. Not least with his core constituency, whose view of the Clintons has long been: "go away, please, I'm begging you."

Roubini and du Pont

Compelling case from Dr. Doom that the recession will be much longer and much more painful than previous recessions. That said (or linked), it does seem that we are nearing the point when the Great Mattress of Money will start returning to the stock market. At some point, and probably soon, great companies like du Pont will be seen as oversold.

Exactly Right

Mitt Romney has an excellent op-ed today on why a bail-out of Detroit is a terrible idea. There does seem to be a consensus emerging that a government-sponsored bankruptcy (Chapter 11 with TARP dollars on the back side to finance the re-start) is the best way forward. A prerequisite of any such undertaking would be new management.

Those Pesky Somalian Pirates

Are at it again. Not to be fussy or anything, but how does this work? The pirates hijack an oil-tanker laden with 2 million barrels of crude oil. They demand a huge ransom; let's say $50 million USD. How do they get paid? In cash? Which currency? Who pays? And whatever happened to that arms shipment they hijacked?