The Reckoning

In September 2007, with Wall Street confronting a crisis caused by too many souring mortgages, Citigroup executives gathered in a wood-paneled library to assess their own well-being. There, Citigroup’s chief executive, Charles O. Prince III, learned for the first time (emphasis added) that the bank owned about $43 billion in mortgage-related assets. He asked Thomas G. Maheras, who oversaw trading at the bank, whether everything was O.K. Mr. Maheras told his boss that no big losses were looming, according to people briefed on the meeting who would speak only on the condition that they not be named.

Oh, and it just gets better and better. But seriously, this isn't really funny at all. Unless you are sitting on a pile of gold and are loaded for bear, the next couple of years look to be, um, troublesome. Citigroup is poised to make the failure of AIG and Lehman Bros look like walk in the park. Oh, and what's Emperor Nero doing? That wanker is probably watching ESPN and scratching his ass... Rome, may yet burn.

And as the credit crisis appears to be entering another treacherous phase despite a $700 billion federal bailout, Citigroup’s woes are emblematic of the haphazard management and rush to riches that enveloped all of Wall Street. All across the banking business, easy profits and a booming housing market led many prominent financiers to overlook the dangers they courted.

While much of the damage inflicted on Citigroup and the broader economy was caused by errant, high-octane trading and lax oversight, critics say, blame also reaches into the highest levels at the bank. Earlier this year, the Federal Reserve took the bank to task for poor oversight and risk controls in a report it sent to Citigroup.

The bank’s downfall was years in the making and involved many in its hierarchy, particularly Mr. Prince and Robert E. Rubin, an influential director and senior adviser .... When he was Treasury secretary during the Clinton administration, Mr. Rubin helped loosen Depression-era banking regulations that made the creation of Citigroup possible by allowing banks to expand far beyond their traditional role as lenders and permitting them to profit from a variety of financial activities.

Heckava Job, 'Rubie.' Something tells me the usual suspects (Rush, et al) will be blathering with gusto how this PROVES that Obama wants to destroy the economy by hiring the former Clinton Treasury Secretary as part of his transition team, despite that it would only prove Rubin was just as blind and greedy and arrogant as his Republican counterparts. While glossing over the fact that a Republican Congress, led by none other than Republican, Phil "Mental Recession" Gramm spearheaded the legislation with his winsome and folksy routine, "those pesky rules and regulations are hindering smart business, the Great Depression was so, 'yesterday,' y'all!" Stop your whining, and start passing the buckets of water... but somehow, I think, they'd rather just poor gas on the thing.

These guys, you have to admit, have balls!

Please Give Us Taxpayer Money (h/t Atrios).

So we can use it to run ads telling everyone how awesome we are.

In a bid to reassure investors, Citigroup is running advertisements in US and international newspapers on Sunday underlining its stability.

Simply. Fucking. Stunning.