Robert Rubin's role in Citi Group's demise and the current enonomic mess: NY Times:

[amborin]

"Today, Citigroup, once the nation’s largest and mightiest financial institution, has been brought to its knees by more than $65 billion in losses, write-downs for troubled assets and charges to account for future losses. More than half of that amount stems from mortgage-related securities created by Mr. Maheras’s team — the same products Mr. Prince was briefed on during that 2007 meeting.

Citigroup’s stock has plummeted to its lowest price in more than a decade, closing Friday at $3.77. At that price the company is worth just $20.5 billion, down from $244 billion two years ago. Waves of layoffs have accompanied that slide, with about 75,000 jobs already gone or set to disappear from a work force that numbered about 375,000 a year ago.

Burdened by the losses and a crisis of confidence, Citigroup’s future is so uncertain that regulators in New York and Washington held a series of emergency meetings late last week to discuss ways to help the bank right itself.

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.

Citigroup insiders and analysts say that Mr. Prince and Mr. Rubin played pivotal roles in the bank’s current woes, by drafting and blessing a strategy that involved taking greater trading risks to expand its business and reap higher profits. Mr. Prince and Mr. Rubin both declined to comment for this article.

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. During the same period he helped beat back tighter oversight of exotic financial products, a development he had previously said he was helpless to prevent.

And since joining Citigroup in 1999 as a trusted adviser to the bank’s senior executives, Mr. Rubin, who is an economic adviser on the transition team of President-elect Barack Obama, has sat atop a bank that has been roiled by one financial miscue after another..."

<snip>

<http://www.nytimes.com/2008/11/23/business/23citi.html?_r=1&hp=&adxnnl=1&adxnnlx=1227459878-5K82poETNJwzCoseJI8Vzg>

sure wish this guy was not part of our great new admin...

[fascisthunter]

1. there ya go...How is this "Change"?

this is why people skip elections, and I guess why the DLC hated the 50 state strategy. The tent is much smaller than most realize and they want to keep it that way.

[amborin]

2. imho

the big diff between dems and rethugs is:

environment, wars, end of radical fundie influence

otherwise, as noam chomsky so correctly pointed out, there's little difference

but: progressives can fight to implement their agenda

[Christian30]

3. I saw this and wondered...

if we want this guy on our team. At the same time, I've read some of his prescriptions for fixing the economy and they're pretty progressive.

[Sarah Ibarruri]

4. Me neither. Will Obama switch him out after a couple of months? nt

[SOS]

5. Rubin is at the core of the destruction of the US financial sector

Obama should kick him out immediately.

[amborin]

6. Rubin was the partial architect of much of what's impoverished main street, to say nothing of wall

street; he's very bad news