Quick grandpa side bar note: the media, government and FCIC treat this “crisis” as though it was a natural disaster when in fact it was 100% human made. The weather Gods did not play a role in subprime mortgages nor did the Wind, Rain, Snow or Heat Gods command a position on boards of the largest financial institutions in this country. That being said, on to the post…
Chuck Prince and Robert Rubin performed an Oscar-like apology during today’s hearing albeit they missed the big awards event by a month (clearly, that is not all they missed).
Chuck Prince: And..... Action!
"I'm sorry that the financial crisis has had such a devastating impact on our country. I'm sorry for the millions of people, average Americans who have lost their homes". "And I'm sorry that our management team, starting with me, like so many others, could not see the unprecedented market collapse that lay before us".Robert Rubin: And..... Action!
Almost all of us in the financial system, including financial firms, regulators, rating agencies, analysts and commentators missed the powerful combination of forces at work and the serious possibility of a massive crisis". "We all bear responsibility for not recognizing this, and I deeply regret that".This was the extent of their attempt of an Oscar-like tug at the heart strings performance. The remaining moments of their performance was classic Wall Street “excuse-speak”.
“….they weren’t aware of the size of Citigroup’s position in mortgage-related securities or the risks surrounding them….”
“It’s hard to put yourself back mentally at that time…”
Citigroup’s faith in the creditworthiness of CDOs “looks pretty unwise” today…
“…blamed the financial crisis on a combination of prolonged low interest rates, the growth of the securitization market, policies encouraging home ownership and the “patchwork nature” of subprime mortgage regulation...”
Rubin: …spotted “market excesses” prior to the financial crisis and predicted they would lead to a “cyclical downturn” at “some unpredictable point.”
“The overriding lesson of the financial crisis was that the financial system is subject to more severe downside risk than almost anyone had foreseen.”
…Warning signs that a crisis was coming “were not obvious at the time”
Chuck Prince: “I think it is absolutely incorrect to suggest that Mr. Rubin had any central responsibility to what happened at Citigroup”.
“At the time, the financial people were working very intensely with the fixed-income people to try to determine exposures…”
Robert Rubin: “didn’t remember the presentation that was made to Citigroup board members”. The remaining assets were “super-senior” and were probably viewed within Citigroup as presenting different “classes of exposure…”
Grandpa's time to cut to the chase:
Chuck Prince and Robert Rubin are pathetic excuses for Human Beings let alone Wall Street executives. The two of you justified your monsterous compensation packages as you alledged you were the "best and brightest" on Wall Street.
Chuck Prince compensation (Andrew Sorkin NY Times 4/5/10): As a thank-you present for running the bank into the ground, the board gave Mr. Prince a parting gift valued at $12.5 million. Yes, you read that correctly, $12.5 million. That exit bonus was on top of the $68 million he received in stock and options he had accumulated over his many years at the company; a $1.7 million pension; and an office, car and driver for up to five years. In exchange, Mr. Prince signed an agreement not to compete with Citigroup for five years.
We parents and grandparents do our best to shape and guide the next generation to take responsibility for their actions, take pride in how they conduct themselves and to place integrity as a top tier virtue.
Grandpa suggests you read the following:
It worked for us....
No comments:
Post a Comment