With Subprime Citigroup at Trough, What Would Rubin's
Byline: Matthew R. Lee of Inner
City Press on Wall Street: News Analysis
NEW YORK, November
24, updated -- The illegal combination of
Citicorp and Travelers in 1998 heralded the near-total deregulation of
financial markets. The expansion of predatory lending into the banking
by Sandy Weill, Chuck Prince and Robert Rubin was allowed and even
the Federal Reserve and Treasury Department, which on November 24
worst and most undeserved bailout to date, assuming the risk on $306
Citigroup's loan slop.
of thousands of lower level employees lose their jobs, Citi's top
Vikram Pandit and Robert Rubin keep theirs. It's all in a weekend's
the Fed's Ben Bernanke and Treasury's Hank Paulson. Would Barack
handpicked successor Timothy Geithner have done different? It's
he is a protege of subprime Bob Rubin. Impunity for financial crimes is
this breaking view has it, a change to be believed in.
reflects badly on the regulators too. Less than two months ago, the
tried to give Citigroup the whole of Wachovia, portraying Citi as a
savior. Since then, the regulators for example turned down National
any of the TARP funds, driving it into the hands of PNC from which the
regulators will now buy NCC's bad assets. By contrasts, Citigroup now
second serving of TARP, $20 billion on top of the supposedly maximum
billion. Will even this be enough? We doubt it.
was asked if he and Citi made any mistakes. Paralleling a response by
Bush to the same question, Rubin said "I’ve thought a lot about tha...
the context of the facts as I knew them and my role, I’m inclined to
not." Earlier, Inner City Press had asked Rubin what he had done to
Citigroup's predatory lending. "That's not under my aegis,"he
replied. Rubin has learned nothing, and his protege is being put in
Treasury. Beyond the coming conflict of interest, appropriate
questioning might well disqualify Tim Geithner.
Citigroup's Pandit, Rubin and other bandits not shown
Bronx-based Inner City Press / Fair Finance Watch
has commented to the Fed since 1998 about the dangers posed by
Prince's response was to ask, "What do you want?" When told, a
clean-up of Citi's securitization of predatory loans, Prince said that
like the pipes through which such practices flow. This then is the
expensive plumbing job, one for which their is no oversight on billing.
September 22, Inner City Press asked Federal Reserve chairman Ben
what legal basis he had rubber-stamped Goldman Sachs' and Morgan
applications to become bank holding companies. Bernanke scoffed that
authority existed, to talk to the Fed's top lawyer, who was in the
room. He in
turn pointed to a 2 a.m. press release which mentioned emergency and
transactions would be "consummated immediately." Thus, no court could
review the Fed's decision to exclude the public. Any case filed for
would be moot. The same holds true of this bailout. The
heights of crony capitalism are being
reached, for now with no end in sight.
Update of 10:40 a.m. -- President
Bush, stopping to announce the bailout to the press, said that
"Citicorp" is being bailed out. Of course, Citicorp no longer exists;
it's CitiGROUP, the successor to Travelers and Commercial Credit, that
is getting the bailout. Bush took no question, but said he'd told
Obama. And what did Obama and his economic advisers say?
Watch this site, and this Oct. 2 debate, on
the bailout and the poor
* * *
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