Feds May Fire Another CEO (Citigroup); Credit Suisse Upset Over Too Much State Intervention

Posted by on April 25, 2009 · 1 Comment 

Are you getting scared yet America?

Citigroup CEO Vikram Pandit’s job security is increasingly in jeopardy as momentum grows in Washington to oust him.

With the bank stress tests wrapping up, sources tell The Post that regulators think they might have to make the bold move of removing Pandit to signal Washington is taking as hard a line with the banks as it did with General Motors when it effectively ousted GM CEO Rick Wagoner.

The talk of Pandit being dismissed comes amid speculation that a visit to Citi’s offices by Treasury Secretary Timothy Geithner a week and a half ago might have been to discuss a change at the bank’s helm. However, people familiar with the meeting said the visit was simply to conduct a checkup on the bank.

Pandit, who took over in December 2007 from the deposed Charles Prince, has voiced his commitment to breathing life into the troubled bank, and is widely seen as not being part of Citi’s problem.

However, amid criticism that Citi hasn’t moved fast enough to clean up its balance sheet and speculation that Citi may need to raise more cash amid rising writedowns from consumer debt, sources said there’s a growing sense Pandit might have to be sacrificed.

Pandit inherited the mess of Citigroup at the end of 2007 and has done a fairly decent job at getting it back on track or at least moving in the right direction.  Obama should know all about inheriting messes, since that’s all he can say when he speaks about the economy – does that mean we can oust him since the economy hasn’t turned around since his election?  They run a big risk by doing this of completely demolishing Citigroup and the financial system.  Pandit’s strides over the past year and his business strategy going forward have helped the company, but it will take time.  If they oust him before real results can be seen, we may see the collapse of this company.  But then again, that may be what the government wants in order to force these institutions into nationalization.

This is so completely anti-capitalist it isn’t funny!  The government should not be allowed to go over the heads of the board of directors or scare a company into making a decision that befits the government’s agenda.  Who in their right mind would ever want to become the CEO of a floundering company, when the MSM has put their entire focus and scrutiny on your job performance without giving you a chance to actually enact the appropriate changes?  The government and the MSM turn this into a public side show and a witch hunt – something that the Obama Administration is incredibly good at.  They turn the focus off of those who really caused this mess, namely the government and some prominent democrats, and spin it into another AIG debacle.  This is shameful.

Credit Suisse has caught onto this game and they’re not happy.  They are in fact warning about the over-involvement of the government in private business affairs.

The chairman of Swiss banking giant Credit Suisse on Friday warned against excessive government intervention in the lending policies of banks that have been bailed out by the state.

“In view of the growing number of banks relying on government support, however, I have concerns that excessive state intervention regarding the lending policies of banks or the realignment of their structures could have negative implications for the entire sector,” said Walter Kielholz.

Many of Credit Suisse’s competitors, including local rival UBS, US banks Citigroup and Goldman Sachs, have received state funding to weather the financial crisis.

Credit Suisse has turned to private investors, but has not taken government funds.

Kielholz acknowledged during the bank’s annual general meeting that state intervention had been necessary to prevent a meltdown of the entire financial sector.

However, he said the action by governments to inject funds into banks was already giving rise to a “two-tiered banking system.”

“This has led to a distortion of competition, particularly in the refinancing market or in terms of client guarantees,” he explained.

“There is also uncertainty about how and when governments will be able to exit their stakes in these companies,” he added.

In addition, he cautioned against over-regulation of the sector, saying that while stricter supervision has been prescribed for the sector, the “benefits of additional regulation have yet to be demonstrated.”

“In particular, I believe there is a risk that these changes could be exploited as a means of ushering in protectionist measures,” he warned.

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Friday Night Bank Seizures

Posted by on April 18, 2009 · Leave a Comment 

Despite some decent profit reportings for the first quarter for some larger financial institutions, there are still a lot of small banks that are facing hardships and are being seized, sometimes in the middle of the night, by the FDIC.  Below are just two of the latest:

Bank regulators closed American Sterling Bank bank on Friday, the 24th U.S. bank to fail this year as the struggling economy and falling home prices take their toll on financial institutions.

The Federal Deposit Insurance Corp said Missouri-based American Sterling had $181 million in assets and $171.9 million in deposits. The failure is expected to cost the FDIC deposit insurance fund an estimated $42 million.

The Missouri offices of American Sterling will reopen on Saturday, and the offices in California and Arizona will reopen on Monday as branches of Metcalf Bank, which is assuming all the deposits of American Sterling.

Customers can access their money over the weekend by check, teller machine or debit card, the FDIC said.

And…

Bank regulators closed Great Basin Bank of Nevada on Friday, the 25th U.S. bank to fail this year as the struggling economy and falling home prices take their toll on financial institutions.

The Federal Deposit Insurance Corp said Great Basin had assets of $270.9 million and $221.4 million in deposits. The failure is expected to cost the FDIC deposit insurance fund an estimated $42 million.

Nevada State Bank agreed to assume the insured deposits of Great Basin, whose five branches will reopen on Monday as branches of Nevada State Bank.

For a more in depth look at aspects of the FDIC see Biggest Bank Failure of 2009.

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Speaking of Inciting Anger and Rage… Obama vs. Business and the Banks

Posted by on April 3, 2009 · Leave a Comment 

As many of us are aware, you can incite anger and rage but ultimately, it is up to an individual to act on that if they so choose.  Nobody forces anyone to act insane or ridiculous but since I received a nice comment from a liberal blaming a republican for the recent massacre in New York let’s take a look at some recent words from Obama just to call a spade a spade.

The bankers struggled to make themselves clear to the president of the United States.

Arrayed around a long mahogany table in the White House state dining room last week, the CEOs of the most powerful financial institutions in the world offered several explanations for paying high salaries to their employees — and, by extension, to themselves.

“These are complicated companies,” one CEO said. Offered another: “We’re competing for talent on an international market.”

But President Barack Obama wasn’t in a mood to hear them out. He stopped the conversation and offered a blunt reminder of the public’s reaction to such explanations. “Be careful how you make those statements, gentlemen. The public isn’t buying that.”

“My administration,” the president added, “is the only thing between you and the pitchforks.”

So the next time I hear that a family friend in Connecticut has received another death threat against themselves or their family, I will most certainly blame it on Obama – how does that sound?  I will forget that the individual, him or herself, had a choice to act and just blame it on someone else’s words. 

I do not like Obama’s words here but I certainly will not say he forced someone to commit a crime either.  He has committed enough crimes against the constitution and has done enough damage to this country all by himself. 

There were signs from the outset that this was a business event, not a social gathering. At each place around the table sat a single glass of water. No ice. For those who finished their glass, no refills were offered. There was no group photograph taken of the CEOs with the president, which typically happens at ceremonial White House gatherings but not at serious strategy sessions.

“The only way they could have sent a more Spartan message is if they had served bread along with the water,” says a person who attended the meeting. “The signal from Obama’s body language and demeanor was, ‘I’m the president, and you’re not.’”

I believe this is grandstanding on Obama’s part since his stimulus signed into law compensation and bonuses for financial companies and he also gave AIG $30 Billion more dollars after his inauguration.  We also shouldn’t forget that Treasury offered to buy up long term assets and pump another Trillion dollars into the financial market.  You think that this doesn’t pad the pockets of big hedge fund managers or corporate CEOs? Are you kidding me?  It’s no wonder why so many of them have actually increased their portfolio gains in the last year while average Americans have lost more than half of their 401(k)s.

So, just as one person was recently killed in the G20 summit protests and banners that said kill a banker were hoisted into the air, I will blame their stupidity on those individuals and no one else – because that is what is beginning to happen in New York now.

Hundreds of people are marching on Wall Street in New York City to protest the billions of dollars in bailout money to big business.

Four people were arrested Friday on disorderly conduct charges after they tried to walk in the middle of Broadway in downtown Manhattan. Marchers plan to walk past AIG headquarters and several banks on their way to the iconic bull statue on Wall Street.

So, I will wonder if liberals will be hypocritical, as usual, and not blame any violence or retched actions on their own liberal representatives grandstanding and demonizing corporate America.  If someone gets hurt in any of this, or if, in the coming months, business men and women are harmed – I will be waiting to hear from you…  I know it’s convenient to always blame Republicans, but why don’t we try to look in the mirror from time to time ok? Thanks.

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