Sam's random musings

Can’t Get Around It

Can’t Get Around It

Today’s Times has a lengthy piece on what got Citigroup into trouble. In general, the plot line is not surprising — broad problems of corporate culture, lax internal oversight of potentially risky practices, a big, risky and ultimately disastrous move into mortgage-backed securities. There’s a lot of criticism of Chuck Prince who inherited the CEO job from Sandy Weill in 2003.

I just am starting to see that this is going to be a problem that is going to continue for a long time… It does seem that in many ways we are far from the bottom. I have to say that the focus on the financial markets is something that doesn’t really look like it will have a long term impact. We are a nation that is addicted to debt, the prevalence of consumer debt is insane. The traction that CC companies have in universities pushing credit products on college students, give-aways and spreading a sense of instant gratification is going to have a long time getting cleaned up. How much debt do you carry? Can you see yourself paying out of it anytime soon, what actual assets do you have backing your debt. Unsecured debt, get ready for that crash it’s coming and it is going to take down a lot of things people didn’t see

(Via Talking Points Memo: by Joshua Micah Marshall.)