Wednesday, January 14, 2009

The Citi Shoe Drops

"Citigroup finds itself pushed to abandon its universal banking model" the headline reads.

And just who is doing the pushing?
Under pressure from Washington and Wall Street, Citigroup plans to split itself in two, according to people with knowledge of the plan. The government, which has twice supplied it with public funds during the financial crisis, totaling $52 billion, wants to avoid a repeat, insiders say.
As one insider put it:
Where Citi goes from here is no longer entirely under its control. Citigroup has "a new CEO," said William Smith, a Citigroup investor who has long sought a breakup of the company. "His name is Uncle Sam. He is an activist, and he wants the company monetized."
Take money from the devil, be prepared to dance to his tune.

Welcome to the surreal world of Fascism where business decisions are made not by projecting profit and loss, but by gauging the disapproving expressions of regulators. Reap what you've sown, pragmatists.

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