FedUpUSA

Archive for the ‘Vikram Pandit’ Category

They still write fluff pieces in the WSJ trying to convince you that an admission of criminal conduct isn’t actually an admission and thus couldn’t be prosecuted….

A former top U.S. official in charge of investigating the financial crisis said the government has concluded that many inquiries of wrongdoing by financial executives can’t succeed as criminal prosecutions.

“There’s been a realization and a more deliberate targeting by the Department of Justice before we launch criminally on some of these cases” said David Cardona, who was a deputy assistant director at the Federal Bureau of Investigation until he left last month for a job at the Securities and Exchange Commission. The Justice Department has decided it is “better left to regulators” to take civil-enforcement action on those cases, he said.

Uh huh.  Let’s remember that Citi’s former chief risk officer testified under oath before the FCIC, presenting written documentation, that the firm — all the way into the executive suite — was fully aware that 80% of the loans it was writing and selling on in 2007 did not meet quality standards.

Yet they sold them anyway without disclosing this fact to the buyers.

Were this a food quality case where 80% of the meat sold by a slaughterhouse was known to contain contaminants and led to the death and/or sickness of thousands of people, or a steel quality case where 80% of the steel was known to contain imperfections that led to the collapse of a building and the death of thousands, the executives in question would be sitting in the graybar motel and the firm involved would be out of business.

This is not a singular example.  Wachovia, for example, entered a deferred prosecution agreement — a guilty plea, in effect — for money laundering to the tune of hundreds of millions of dollars of funds laundered for Mexican Drug gangs.  Then there’s the Jefferson County Alabama case in which municipal officials and related parties were actually convicted and went to prison and yet nobody from any of the financial firms involved was criminally prosecuted, nor were the firms themselves.

The latter is especially galling since in order to receive a bribe (the base allegation of corruption that was proved to a criminal standard and led to imprisonment) someone else must offer said bribe and the victims of this scheme were the entirety of the citizens of the county who are stilling paying for the corrupt practices involved and have received no restitution nor do they have any hope of it in the future.

While the apologists say that these cases are “hard to prove” this assertion does not pass the smell test — in many of these cases that I have bird-dogged for years now we have sworn testimony as evidence, in others (e.g. the cases outlined in the 60 Minutes piece that I covered the other day) there are actual whistleblowers who have and will testify and in still others there are actual prosecutions of people on the “other side” of the transactions in question that have led to convictions — that is, cases where the required standard of proof has been met!

You are free to come to whatever conclusion you’d like as to the reason for the lack of prosecution of financial firms and the executives running them, but the “mainstream media” apologist game does not stand up to even the most-cursory level of inquiry.

Stunning interview with Citigroup’s CEO, Vikram Pandit.  Now, perhaps he might want to address how he perjured himself in front of Congress….but I digress….  From Bloomberg:

Vikram Pandit, chief executive officer of Citigroup Inc., talks about the financial crisis and the outlook for the bank and its Citi Holdings division, which contains assets marked for sale. He speaks with Charlie Rose at the Securities Industry and Financial Markets Association’s annual meeting in New York.

“When you go back and think about what brought all of this on, it was leverage. We’re still living through the impact of leverage: consumer leverage, bank leverage, government leverage. It seems wonderful to borrow just a little bit more when things are going good, but invariably the history of crises [show] leverage is at the heart of it. We learned it yet again what happens to the world when leverage rises to levels that are unsustainable, and we’re still living through that today in the form of what is going on with the governments, including our own, but not only our own. Certainly we’re all watching what is going on in Europe.”

It was just a matter of time before the administration’s covert plan of rewarding bank execs for massive failure by allowing them to load up their balance sheets with record risk once again, while paying out historic bonuses, blew up in Larry Summers’ face. Today’s attempt by the government to not only allow the failed Citi management team to pay itself an infinite amount of money more than it deserves for destroying one of America’s landmark companies (why the hell is Vikram Pandit still in charge of the Titanic?) but to pretend that it “generated” another taxpayer win by selling off its shares at a profit, was aborted after hours, when Citi could barely find enough interest to sell $17 billion at the embarrassingly low price of $3.15, below that government’s cost basis. This will preclude Obama from making a TV appearance tomorrow of how the US taxpayer made even more money by backstopping Moral Hazard. What the US taxpayer however did do, is funnel money straight out of its pocket, into that of Vikram’s worthless lackeys. We somehow doubt this will make the teleprompter of whatever it is Obama will be praising in his TeeVeethon tomorrow.

More from the WSJ:

The U.S. government reversed plans to begin reducing its trimming its 34% stake in Citigroup Inc. (C) after investors balked at buying the bank’s shares, according to people familiar with the situation.

Citigroup was nearing completion late Wednesday on the sale of about $17 billion of newly issued shares. But the offering encountered such a lukewarm response that Treasury Department officials decided to hold off on selling any of its shares until next year, these people said.

At the expected sale price of $3.15 a share, the U.S. government would have suffered a loss of 10 cents per share on its 7.7 billion-share stake in Citigroup, or about $770 million.

Treasury officials also agreed not to sell the government’s shares for at least 90 days. The 90-day lockup is a significant concession because the government previously could sell its Citigroup shares whenever it wanted.

Citigroup said Wednesday evening that it plans to go forward with repaying the financial lifelines it got under the Troubled Asset Relief Program. That includes unwinding a deal in which the government shields Citigroup from most losses on $301 billion of assets held by the company.

As Citigroup gauged interest in its huge offering, announced Monday, some investors said they were willing to buy shares only if the company extracted an agreement from the Treasury Department to hold off on any future stock sales for at least 90 days, according to people familiar with the matter.

The government now plans to unload its Citigroup stock gradually over the next 12 months, people familiar with the situation said. That is a major shift from the Treasury Department’s announcement Monday that it planned to dispose of the shares over six to 12 months.

Is this merely one of the ever increasing cracks in the economic team’s bailout plan, which as all investors are fully aware are completely unsustainable in the long run, yet sufficiently plausible over the next 90 or so days (until QE presumably ends) that one more day of buying by various algos may be warranted. Perhaps the 90 days will end up being a far too optimistic expectation.