The Real Reason Citigroup Is a Mess

this must be the most ignorant piece on citi i've read. Clearly, you are too wrapped up in your cynicism and half past six analyses to draw your poor thought out analogies.. shame on you

While I will agree that Citigroup under Weill should have moved to clean up these companies that they bought, I refuse to believe that all of this mud needs to be dumped on the current Citi management's doorstep. Commercial Credit, Primerica, Associates First Capital, and other lenders in their vein certainly bear a greater share of the fault here.

Did Sandy's management turn a blind eye to what their acquisitions were doing/had done? Yeah, sure. That's fairly obvious. I'm not saying that they're angels in this. But let's not let the management groups that blazed the path off the hook simply because they got their buyout checks and ran.

Way to not prove a point or support an argument. Pure Genius.

The natural result of deregulation is that any law standing between the greedy and a quick profit will fall by the wayside. Soon kidnapping and armed robbery will be as rampant as it was in the old west, since the constitution is just a piece of paper and the admistration of justice is left to crooks like Mukasey, Gonzales and their Federalist Society goon buddies.

By the way, Primerica never sold any Adjustable Rate, Interest Only, Negative Amortization, Balloon Note or Pick a Payment Option Mortgages that caused all of this stuff to happen. Currently 12.8% of all mortgages in the U.S. are in some form of default (meaning they are at least 1 payment behind or more), 29% of all ARMs are in some form of default, only 0.09% of Primerica's loans are in some form of default. Staggering difference. Read the 7th paragraph of this article, http://www.americanchronicle.com/articles/81254.

And the “Tennessee rugulators” or “Insurance Commissioner” was lobbied by his cohorts in the life insurance industry who were having their policies replaced because the life insurance industry sells cash-value insurance, which Dave Ramsey says “is a complete rip-off” and Suze Orman says “is on her top ten hate list”.

So their may be a bad guy or companies here, but not at Primerica!!!

Please detail your source for the Primerica quote.

This article is obsurd!! Obviously the financial services industry is in a mess…. and the blame game has started.
The mess we are in is very complicated and most people wouldn't be able to understand the processes and events that took place to get us where we are today. There was a tremendous amount of greed on many different levels and companies through-out the financial industry right down to the rating agencies and were rating the financial strength of the lenders of these debt instruments.
I don't know where this gentleman got his information about Primerica Financial… as far as I can see they are one of the stable, compliant and growing companies with-in Citigroup.

GUEST COLUMN by Steven Earl Salmony

November 26, 2008

Chapel Hill(NC)News

http://www.chapelhillnews.com…

Billions end up paying for excesses of the wealthy on Wall St.

Our lexicon of business activities is being expanded daily, thanks to the “wonder boys” on Wall Street. We are learning about derivatives, collateralized debt obligations, credit default swaps, recapitalization, puts, short selling and so on. We are gaining a new vocabulary from the recent meltdown of the financial system and expected slowdown of the real economy worldwide.

Where did this debacle begin? Well, it began in the center of the human community's banking and investment houses in the financial district of NYC. Supposedly, the “brightest and best” among us go to Wall Street, know what they are doing and do the right thing. Unfortunately, such assumptions turn out to be colossal mistakes.

How did this calamity occur and why is the human family in such dire economic straits? It appears that grotesque greed and a culture of corruption have come to dominate significant operating systems of the global political economy.

Powerful people in high offices within huge business institutions with access to great wealth are recklessly and deleteriously manipulating the unbridled expansion of the global economy in the small, finite planetary home God blesses us to inhabit.

Self-proclaimed Masters of the Universe have surreptitiously “manufactured” a subprime “asset bubble” and perversely fostered its uneconomic growth within the world economy. Not unexpectedly, this asset bubble did what bubbles do. The subprime bubble burst and made a mess. Global credit markets have frozen, stock prices are tumbling and the value of the dollar is gyrating.

Evidently organizers, managers and whiz kids overseeing the global economy, and the unraveling (i.e., deleveraging) of the worldwide subprime swindle are running the artificially designed financial system of the global economy as a pyramid scheme. This is to say that the international financial system is being operated so that most of the wealth funneled pyramidally into the hands of a small minority of people at the top of the world economy where this wealth is accumulated and consolidated. Note that 30 percent of annual corporate profits end up in the accounts of a tiny number of people. At the same time, the vast majority of people on Earth, near the bottom of the global economic pyramid, are left with very little wealth. Does the economy of the family of humanity exist primarily to provide wealth to the already stupendously wealthy? The “bankstas” among us evidently think so.

In the 1980s, this extremely inequitable method of distributing wealth and arranging business activities was called a “trickle-down” economy. We have been repeatedly told how this 'rational' economic scheme is good because it “raises all ships.” And yet, from my limited scope of observation, the billion people living on resources valued at less than one dollar per day and the additional 2.7 billion people being sustained on two dollars per day of resources now appear to be stuck in squalid conditions. The 'ships' carrying these billions of less fortunate people (i.e., more people than lived on Earth in the year of my birth) do not appear to be lifting them out of poverty.

Steven Earl Salmony

AWAREness Campaign on the Human Population,

established 2001

http://sustainabilitysoutheast.org/content.html…

Hey Mary and Steve,
There's plenty of blame to go around for sure. However, you really should verify the accurateness of your sources and do your homework before you get up on a high horse and point your fingers. Greed, laziness, media sensationalism, political cronyism and too big of a government is at the basic root of the economic mess we are in today.
That you don't bring up the fact that government legislation created the scenario for all of this is ludicrous. What of the legislation that created Fannie Mae and Freddie Mac under Jimmy Carter then expanded reckless loaning mandates under Bill Clinton? Then when one party wanted better oversight over Fannie Mae & Freddie Mac it was stopped by the other “so called” party of the people. This opened the way for greedly, unscrupulous mortgage brokers and rogue loan officers that just saw this as a way to pump up the transaction volume and become temporarily wealthy at everyone's expense. And this doesn't address the fact that many people took out loans that really should have known better and are also at fault. You may not fully understand the “truth and lending” section of your mortgage or refinance statement but if you sign it it's true whether you understand it or not. It is my belief that most people in this situation do unwittingly trust the banks, loan officers etc and so most the blame lies on the banks, mortgage brokers and loan officers.
For the most part, CitiMortage did exercise due dilligence when originating loans etc not counting the fact that there are always some bad apples in the group. Citi's complicity in this was in it's sheer size and disconnect and that they bought up some many of these subprime loans in tranches. It was seemingly easy money and short sighted but to point a finger squarely at Citi is preposterous. Furthermore, it is a fact that Primerica Financial Services though CitiCorp Trust Bank has never, read it again, “never” originated anything other than fixed rate simple loans. In fact most people with these loans exercise an equity builder option which gets them out of debt years sooner and lowers the total cost of their loan by tens of thousands of dollars.
You really do sound like someone getting on the bandwagon of the blame game without taking into account the whole story, complete with all of the facts. Just the facts Maam, just the facts please!
JSMcElroy

Citi bought many now defunct mortgage companies with the idea of packing the mortgages and selling them as securities. They did not originate the loans that they now have on their books. However, the investment bankers, not CitiMortgage, Primerica, or Citifinancial, ; should have known better. The loans orignated by Citi's inhouse companies were nothing like what they were buying for resale. You can find the names of many of these companies at the implode-o-meter website. When they came back onto the books, they were put into a separte unit called Citi Residential.

Bang on my friend. Been in the investment business for years and havent heard st8 talk like that in years. May it go bankrupt for its sins and may I profit from the trade, me and a zillion others on the NYSE. Remember readers most shorted stock on the nyse as of last week. Dont stand in front of a moving train…

Bang on my friend. Been in the investment business for years and havent heard st8 talk like that in years. May it go bankrupt for its sins and may I profit from the trade, me and a zillion others on the NYSE. Remember readers most shorted stock on the nyse as of last week. Dont stand in front of a moving train…

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