Mr. Rubin is… or let’s make that was, as he’s resigning … chairman of Citigroup’s executive committee. Citigroup is breaking up it’s “supermarket” bank investment business model, despite receiving bailout funds.
Citigroup signaled a breakup of its unwieldy financial supermarket model with a possible deal to sell a share of its prized retail brokerage business to Morgan Stanley, said several people with knowledge of the discussions, underscoring the enormous problems the bank continues to confront even after receiving taxpayer bailout funds.
The new chapter of wrenching change came as former Treasury Secretary Robert E. Rubin, who came under fire for his strong support of that model in an advisory role that helped fuel the bank’s troubles, said he would resign.~~~
For Mr. Rubin, his resignation is a sobering turn in a sterling career in Washington and on Wall Street. Since joining Citigroup in 1999 as an adviser to the bank’s senior executives, Mr. Rubin, 70, who is an economic adviser on the transition team of President-elect Barack Obama, has sat atop a bank that has made one misstep after another.~~~
In his capacity as a senior adviser to Citigroup’s top executives and board, he pushed hard for the bank to step up its trading of risky mortgage-related securities and other complex investments as long as it improved oversight — a strategy critics say sowed the seeds of the bank’s current troubles. Mr. Rubin, whose contract specifically absolved him from daily operational responsibilities, has maintained that he could not have foreseen the current mess.
Remember this guy? Let’s jog your memory…
Back in 1995, Clinton had Mr. Rubin – as his Treasury Secy – rewrite the rules for the Community Reinvestment Act, This was, as I mentioned in my Sept 22, 2008 post, the first domino falling in a perfect storm of housing and lending events.
Now if you’re standing, you’d better sit… Now that the election is over, and the media’s beloved candidate has taken the White House, the NYTs decides to cop to the truth about the economic housing origins.
Yup… the below is from the ol Grey Lady herself – the lead linked article in this post.
When he was Treasury secretary during the Clinton administration, Mr. Rubin helped loosen Depression-era banking regulations that made the creation of Citigroup possible. 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.
Woof… it’s a brand new day, eh? LOL
But wait, we’re not done with Mr. Rubin’s “sterling career” yet. In 2002, he was uncomfortably close to the Enron scandal. Yet, as even the uber-left rag, Common Dreams states, Rubin danced out of that shadow with a “get out of jail free” card.
As Enron’s accounting irregularities were being discovered and its fortunes rapidly sinking, Bob Rubin placed a call on November 8 to Peter R. Fisher, current undersecretary of the Treasury for domestic finance. According to Treasury, Rubin wanted to know if the Bush administration was going to intervene with the big credit rating agencies, who were about to lower their rating of Enron’s debt. Since Rubin’s Citigroup was holding hundreds of millions of dollars worth of Enron’s debt, it had quite a large stake in the outcome of any such decision.
Treasury told the press that Fisher said no, and Rubin agreed with the decision — as if this were just an informational call to discuss the pros and cons of political intervention to protect the credit rating on Enron’s bonds. But this should not be allowed to drop.
The public needs to know more about this phone call, and any others that Rubin may have made on Citigroup’s behalf. Whether or not they are technically illegal, such actions are a blatant and corrupt abuse of one of the highest offices of our government.
So why do we care about Rubin now? Rubin’s replacement as Clinton’s Treasury Secy replacement was Larry Summers… the same Larry Summers who is now the *current* appointed
Treasury Secy [see my update: NEC Director] with the Obama administration… and in sole charge of all that bailout cash.
UPDATE CORRECTION: As Chuck snidely pointed out in his comment below, I erroneously swapped the positions of Tim Geithner and Larry Summers in their admin appointed positions. Geithner has his hands on the taxpayers bucket of cash, and Summers has Obama’s ear as his NEC Director and top advisor.
Geithner was Under Secretary of the Treasury for International Affairs, working under both Rubin and Summers. Some say Summers was Gaithner’s mentor, but other sources described him as a Rubin protégé.
Well ain’t that an improvement? LOL
This, of course, make the potential of a Rubin position in the Obama admin even worse… reuniting the damaging cabal of Clintonian economic team once more.
Rubin is also a member of Obama’s Transition Economic Advisory Board.
After his latest “sterling” career moment of helping drive Citigroup into the ground , Rubin’s unemployed.
So the burning question is, how long before this loser shows up in Obama’s Treasury Department or economic team to help spend the taxpayers money?
Vietnam era Navy wife, indy/conservative, and an official California escapee now residing as a red speck in the sea of Oregon blue.