Wednesday, October 17, 2007

Prince vs Rubin: Who's Fault?

With everything being said about Citigroup (C) both here and everywhere else the last few weeks, something struck me as funny today (not funny hah,hah)

Robert Rubin, who sits on the Citi board has made about $100 million doing that the last few years and has been roundly regarded as "integral" to operations. But, here is the thing. After the most recent quarter which is rapidly becoming a Citi-implosion only and not a "banking sector issue" I have only one observation.

If Rubin is so "integral" to results, then this becomes the scenario. Either Prince is listening to Rubin and getting such bad advice he is running both his job and the bank into the ground OR he is ignoring Rubin's council in which case, why are we paying Rubin $100 million and if Prince is ignoring him and the bank is faltering, why does he still have a job?

These are the only possible scenario's out there. Rubin and Prince have been the very public faces of the bank and it's moves so the credit and or blame lies there. Either way, if Bank of America (BAC) grows earnings when they are release tomorrow morning expect (rightfully) investors to become very impatient. Prince had a pass on this quarter because we thought all the banks would suffer but it turns out it is looking more and more like only Citi will.

Citi will close near or at 2 year low today. Unacceptable.

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