Just Asking: How much time, effort and money has the Federal Reserve and the United States Treasury Department expended on saving Citigroup?
Citigroup, without a doubt, is the nation’s signature financial institution. An organization whose failure might trigger a cascade of related financial insitutions.
But I would like to know, exactly how much time, effort and money has the Department of Treasury and the Federal Reserve spent on saving Citigroup? And how much of this bailout inures to the benefit of its executives and large shareholders, one of which is Prince Walid bin Talal of Saudi Arabia, the biggest shareholder of Citigroup?
Connections to Obama …
We have just heard that Robert Rubin, who served in the Clinton Administration as the Secretary of the Treasury and most recently as the Senior Counselor/Director of Citigroup, is giving up his post at Citigroup but will remain a director until the upcoming Citigroup annual meeting this year.
What is especially troubling is that Rubin is said to serve as a top economic adviser to President-elect Barack Obama and his protégés Lawrence Summers (also a Clinton Treasury Secretary) and Tim Geithner (President of the New York Federal Reserve) play important roles in the Obama Administration as the director of the White House National Economic Council and United States Secretary of Treasury, respectively.
Both democrats, Rubin and Summers, were complicit in removing a number of regulatory restrictions on financial institutions – which were signed into law at the last minute by none other than President Clinton. One piece of legislation, Financial Services Modernization Act, which destroyed the barriers between commercial banks, investment banks, insurance companies and securities brokerages.
Another piece of legislation bearing their fingerprints was Phil Gramm’s Commodity Futures Modernization Act which overrode state gambling statutes and permitted wild derivative-based securitization schemes to flourish.
What I want to know …
Exactly how much of this political theatre and manipulation of bank bailout funds has involved Citigroup? And, is this why there is a lack of transparency in the Federal Funds allocation of loan monies?
There is no doubt that Rubin earned tens of millions of dollars based on the performance of Citigroup and has played an important oversight position within the institution that was said to be near the point of collapse prior to the emergency Federal Reserve actions and Treasury bailout.
A more important question …
Can these men, who allegedly are still extremely close to certain financial institutions, provide honest counsel to a president who knows little or nothing about big money financial institutions and their governmental lobbying efforts?
According to Reuters News Service …
“Robert Rubin quits Citigroup”
“In a letter to Chief Executive Vikram Pandit, Rubin praised management for making the ‘tough decisions’ to restore Citigroup to health. But he admitted to not having seen the recent deterioration in markets.”
"’My great regret is that I and so many of us who have been involved in this industry for so long did not recognize the serious possibility of the extreme circumstances that the financial system faces today,’ Rubin wrote.
“A November 23 front-page story in The New York Times called Rubin ‘an architect of the bank's strategy’ to chase profit by expanding in collateralized debt obligations and other risky products.”
“The strategy backfired as credit markets tightened and housing prices fell, causing $20.3 billion of losses in the year ended Sept 30. Many commentators, editorial pages, websites and blogs have faulted Rubin for Citigroup's problems.”
Is this the quality of Barak Obama’s economic advice?
Considering that these are all wealthy, politically-connected businessmen, can they be trusted to put aside their past loyalties and feelings to render honest service to the American Public or will they be revealed as yet another embarrassment to the neophyte President and his party?
Reference Links …
“Nullius in verba.”-- take nobody's word for it!
“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw
“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”
“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS "The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius “A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell “Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar “Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS
“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS
"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius
“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell
“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar
“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS