Comments on: Citigroup and Merrill Lynch Situation

By: Martin Davies

Martin Davies — Wed, 30 Jan 2008 09:56:57 +0000

Oh it’s all innocuous dawdle, most of these CEO’s have little visibility over the institution as a whole, they are overpaid figure heads and these institutions are generally so large that one single person makes little impact to the modus operandi of the business.

The cycle will go on and mediocrity will continue to buy the propaganda that is fed to it.

What would be really interesting is to see these mammoth banks split and run separate operations, uniquely. In this way there might be a chance that they become efficient little companies aspiring to grow rather than one single entity which suffers negative marginal economies of scale.

Under such a model the dead wood would fall off the ship.

By: Andrew

Andrew — Thu, 17 Jan 2008 05:53:35 +0000

Howard,
You may be right, but I just can’t see a new CEO not trying to get everything out at once. If I were in that position, apart from being much better paid than I currently am, I would be looking to get everything probable or even possible out at once.

By: Howard Candisbee

Howard Candisbee — Wed, 16 Jan 2008 22:21:51 +0000

Yup. Totally agree.

Except… maybe not this time. The US economy is tanking faster than the news wires can carry the message. Rumours had Citi writing off USD24B, so look for more pain to come this year. We havn’t begun to see the Credit card and Commercial Real Estate writeoffs yet…