Citigroup CEO dancing while Rome burns
The following (from a story by David Weidner at Marketwatch.com) neatly expresses the American corporate mindsoul:QUOTE
A few weeks ago, Charles Prince, Citigroup’s CEO, famously said the bank was gladly lending even though there have been ample observations, from even the most modest of sources, that the credit market was overheated. See full story.
“When the music stops, in terms of liquidity, things will be complicated,” Prince told the Financial Times. “But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”
The problem, of course, is that Citigroup is bracing to be stuck holding more leveraged bridge loans than it bargained for. If Citi can move the debt off its balance sheet, it’s likely the bank will have to pay a premium to dump it on some other investor, Citi’s CFO, Gary Crittenden said. That, of course, is going to mean charges and other costs when the bank reports in the third quarter.
As one Citigroup insider said to me the other day: no one’s dancing anymore.
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