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When Jamie Dimon was ousted from Citi, he took the bank’s rising stars with him. Now, Dimon and his loyal crew are Wall Street’s most triumphant survivors.
The list of those at fault in Citigroup’s near-demise is being written as we speak. But there’s another list: those who might have been able to save the joint if they’d still been around.
Much attention has been paid in the past several days to Citigroup’s lurch towards risk in the tail end of the housing and liquidity boom. That decision ultimately brought the institution to its knees, leaving Citi literally begging Uncle Sam to step in and save it. The begging worked, and the house that Sandy Weill built will live to see at least a few more days. But the finger pointing has begun. The bulk of it has been toward those deemed complicit in the banking behemoth’s reckless decisions made in search of an extra buck:
Sandy Weill: Did his empire building result in a company that was literally unmanageable?
Chuck Prince: Did Weill’s handpicked successor have any business running such a complex institution after spending the bulk of his career as general counsel?
Bob Rubin: On top of making some $20 million-plus a year for a job with no actual responsibilities, did the revered former Secretary of the Treasury goad naïve Citigroup executives into taking risks they should have eschewed?
Vikram Pandit: Reportedly hand-picked by Rubin to take the reins from Prince, did the former Morgan Stanley number two miss the chance to make some tough decisions over the past year?
Tom Maheras: Did Citi’s trading chief have any idea how devastating his reassurances to Prince and Pandit about the company’s risk exposures would prove to be?
That list will grow. But, in what you could call a Tale of Two Cities, there’s another list that hasn’t been circulating as much: the list of those people who weren’t there to help. Some were forced out by Weill or Prince. Others chose to leave to hitch their careers to Jamie Dimon, Weill’s erstwhile heir-apparent, who was fired shortly after the creation of Citigroup itself in 1998.
Dimon, the one-time dissident prince of Citigroup, now sits atop JPMorgan Chase. His bank is widely considered the most stable big bank today. Dimon is the king right now, and Weill is the former king. Those who went with the dissident prince have prospered. Those who stayed (or retired) have not. It's one of history's reversals, when the prince trounces the king.
Tracy Quan's latest novel is Diary of a Jetsetting Call Girl, set in Provence and praised in The Nation as a "deft account of occupational rigors and anxieties before the crash." Tracy's debut, Diary of a Manhattan Call Girl, and the sequel, Diary of a Married Call Girl, are international bestsellers. A regular columnist for The Guardian, she has written for many publications including Cosmopolitan, The Financial Times, and The New York Times.
Joe Mathews is a journalist, an Irvine senior fellow at the New America Foundation, and a contributing writer at the Los Angeles Times. He previously served as Justice Department reporter for the Wall Street Journal and as a city desk reporter at the Baltimore Sun. He is the author of The People’s Machine: Arnold Schwarzenegger and the Rise of Blockbuster Democracy.
Gerald Posner is the award-winning author of 10 investigative nonfiction bestsellers, ranging from political assassinations, to Nazi war criminals, to 9/11, to terrorism (www.posner.com). Posner lives in Miami Beach with his wife, the author Trisha Posner.
The Daily Beast is dedicated to news and commentary, culture, and entertainment. We carefully curate the web’s most essential stories and bring you original must-reads from our talented contributors.
Renata Espinosa is the New York editor of Fashion Wire Daily. She is also the co-founder of impressionistic fashion and art blog TheNuNu and a sometimes backup dancer for "The Anna Copa Cabanna Show."
Amanda Fortini has written for The New Yorker, Slate, Elle, and New York, among other publications. She lives in Los Angeles.
Duff McDonald is a contributing editor at New York magazine and a former contributing editor at Condé Nast Portfolio. He is working on a book about Jamie Dimon, chairman and CEO of JPMorgan Chase, to be published by Simon & Schuster in the fall of 2009.
Duff McDonald is a contributing editor at New York magazine and a former contributing editor at Condé Nast Portfolio. He is working on a book about Jamie Dimon, chairman and CEO of JPMorgan Chase, to be published by Simon & Schuster in the fall of 2009.
Duff McDonald is a contributing editor at New York magazine and a former contributing editor at Condé Nast Portfolio. He is working on a book about Jamie Dimon, chairman and CEO of JPMorgan Chase, to be published by Simon & Schuster in the fall of 2009.
With $800 billion on deposit Citi needs more?? To big to fail is not a Business plan!! It's a Ransom Note!
Your thesis is ill-conceived. Those who could have saved Citi are cut from the same cloth as those that oversaw the decimation of Wall Street. The only savior is Uncle Sam. Welcome to the new, new (old) world order. And thank goodness because ultimately it means a strong central banking system.
I have to agree with coloradokarl it not just the 800 billion in deposits but the 200 million customers but here is my question how does a company with a market cap of 20 billion need 45 billion to be rescued and at the end of the day with the US gov't buying up the toxic " whatevers" how does this company survive after all this tax payer money I think the Fed only owns 8% of the company,.
I bet the boys over at GM and Chysler would like to hire this crowd to argue it's case. If I sound confused it is only because I am Maybe Mr Rubin can answer some of these questions???
The reason the govt is paying institutions more than their marekt cap is clearly they are making whole the speculators who bet right and are owed trillions on the real estate and soon to be credit card and then CDS affairs. The system is a joke - we are paying off specualtors ar the people's expense. Nice joke,
Thank you.
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