“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Tuesday, November 06, 2007

Is the Sauce for the Goose Good for the Gander?

Martha's goose was cooked for less.


November 6, 2007 -- Citigroup's board saw the writing on the wall months ago, but did little to stop the world's largest bank from crashing and taking the rest of Wall Street with it.

A handful of Citigroup's highly paid directors did take a few timid baby steps last summer to find a replacement for then-chief Chuck Prince, but backed down almost as soon as they had embarked on their quiet coup, according to a source familiar with the matter.

As Citigroup's turmoil deepened yesterday, stocks of Wall Street's top seven banks tanked - with five of them hitting new 52-week lows and wiping out nearly $17 billion in stock value - pushing the blame game wider across the economic landscape.
Governance experts said the brunt of the blame for Citigroup's problems and turmoil rests with its 13 directors, excluding Prince, who collectively earned $43.8 million in compensation last year.

"Directors are not like some kind of 1950s housewife who was always the last to learn about the misadventures of her husband," said J. Richard Findlay, head of The Centre for Corporate & Public Governance.

"Their job is to oversee the CEO and to be aware of key events in strategy and risk at every stage along the way," Findlay added.

Sandler O'Neill analyst Jeff Harte said, "Public comments in support of Mr. Prince and recent management changes made by Mr. Prince suggest that the board was as surprised as anyone by [Citi's] CDO related exposures."

Insiders said some directors had been anticipating carnage from its junk mortgages as far back as the summer of 2006, with the board's risk-management panel holding more sessions than any other committee in that year and in early 2007.
But before the risk panel or board ever made its fears public, insiders began selling their shares, according to regulatory filings.

Robert Rubin - the board's key director who was named the chairman Sunday - unloaded the most stock. He sold $4.5 million worth of shares on Jan. 24, 2007, at $55.05 before shares collapsed.

Two other senior executives also sold shares as the woes in the credit markets began gathering momentum in August 2006.

Chief Operating Officer Robert Druskin sold $1.8 million worth of shares between August 2006 and January 2007 as the stock traded in the $54 range.


  1. Mr Rubin ...
    One assumes he filed the proper public disclosures, at the time.

  2. Read this column, compare it to the last few EB threads and tell me : does Patrick Buchanan read EB?

  3. desert rat said...
    Mr Rubin ...
    One assumes he filed the proper public disclosures, at the time.

    Tue Nov 06, 11:26:00 AM EST

    Didn't need to DR. He was a "public servant" in the "most ethical administration in history."

    Probably channled a good chunk of that hard-earned, risk-managed cash to some campaigns. Maybe even through Chinese dishwashers.

    He'll get the Sandy Berger Special, if anything at all.

  4. WASHINGTON (Associated Press) -- Pakistani President Pervez Musharraf reached out to Democratic leaders in Congress on Tuesday amid growing concerns that U.S. aid should be restricted or cut off until he restores democracy.

    Musharraf called Rep. Tom Lantos, D-Calif., and Sen. Joseph Biden, D-Del., chairmen of the House and Senate committees that deal with foreign relations.

    Biden, D-Del., said he told the Pakistani president it was critical he allow the elections in January as planned, and that he "take off his uniform" and "restore the rule of law."

    "It is clear to me from our conversation that President Musharraf understands the consequences for his country and for relations with the United States if he does not return Pakistan to the path of democracy," Biden said in a statement.

    Lantos declined to comment.

    Musharraf's phone calls come as the Bush administration is reviewing its aid package to Pakistan and several lawmakers have said they want to see new restrictions on the funding.

    Deputy Secretary of State John Negroponte was scheduled to testify on Wednesday before the House Foreign Affairs Committee.

    "President Musharraf must be told to revoke martial law, release the thousands of Pakistanis imprisoned in recent days, restore freedom of the press, relinquish his military position and proceed with democratic reforms," said Rep. Jane Harman, D-Calif.

    "American military and economic aid should be suspended until he does so," she said.

  5. Bolton says Condi is now in charge of MOST of our foreign policy, (biggest reason why he quit) and that MOST of it leads us into an ever more dangerous position with fewer options.
    Ambassador John Bolton, author of
    Surrender Is Not An Option: Defending America at the United Nations and Abroad.
    Mp3 Ingraham interview of Bolton:
    Ambassador John Bolton on current US foreign policy.
    A report from the inside that mostly mirrors 'Rat's notes on Gaffney:
    "Bush Doctrine 2.0." It bears no similarity to the first edition. In fact, it pretty much repudiates everything Mr. Bush stood for during his first four years in office. Worse yet, it threatens to render his legacy not simply one of unrealized goals but of betrayed principles, abandoned friends and unscrupulous deals with tyrants sure to perpetuate their odious regimes.

    Herewith is a sampling of the unraveling of Mr. Bush's policies:

    • Appeasing North Korea:
    • A Palestinian state, no matter what:
    • Closing 'Gitmo':
    • Farewells to sovereignty:

    The problem is not merely that those adulterating the original Bush Doctrine by supplanting it with a 2.0 version will obliterate the common-sense and courageous approach made necessary in the wake of the September 11, 2001, attacks. Mr. Bush will bequeath to his successor and his people a world made vastly more dangerous, not more stable, for his administration's embrace of appeasement dressed up as "realism."

    The details of Mr Frank Gaffney Jr. indictment can be read here @ the Washington Times, that hot bed of BDS Liberals and fellow travelers.

  6. Comments on Citibank, Rubin, et al.

    It is interesting to see that the fired executives this month of the largest U.S. bank and the biggest U.S. brokerage had no experience in the business of their employers. How could they be successful?

    Prince, a lawyer, has never gone out and made a loan. He
    has never been through the boring (and necessary) process of documentation of a loan. If he had ever been through a loan documentation process, I doubt he would have made so many mistakes.

    In the same vein, Stan O’Neal, the just booted CEO of Merrill Lynch, has never sold a stock or bond. How could he become the head of the biggest brokerage in the US?

    Both Prince and O’Neal are talented. Neither one, though, should have been named CEO as they lacked experience in the main business of their employers. Both should have been kept as competent bureaucrats within their companies.

    Rubin made a big mistake and should be fired immediately.

    Bring back the bright and multilingual John Reed.

    Citigoup shareholder since July 1995

  7. Just found this at Belmont:
    Tamquam Leo Rugiens said...
    For an enlightening and informed discussion of Foggy Bottom by John Bolton being interviewed by Hugh Hewitt, go here:

    Part 1:
    Part 1

    Part 2:
    Part 2

    Also, Lawrence Wright is on Hewitt today, will probably put audio up at townhall, perhaps a transcript, as well.

  8. John Bolton ...
    JB: Well, I think your analogy is a good one, and the Law of the Sea is a particular problem. You know, we’ve learned from experience there are not just the problems the Reagan administration saw in the Law of the Sea treaty. We know from the international criminal court that when you set up these adjudicatory bodies, internationally, you’re turning over potentially enormous grants of our sovereignty to them, so that the problem is actually worse than we originally saw it. And that’s why I thought in the early days of the Bush administration there was so much promise, because he was prepared to reject the Kyoto protocol, withdraw from the anti-ballistic missile treaty, unsign the international criminal court treaty, and a variety of other things, all of which we’ve left behind in this…now this push to support the Law of the Treaty shows the completely 180 degree nature of the turn that they’ve taken.

  9. Luckily, EVERY GOP leader rejects their Globalist Leader's Shameless Policy of Surrender, at least on the Law of the Seas.
    Wonder if Gore would have gone completely nuts if he had won?
    Hard to believe he'd be on the Global Warming Jihad if he was responsible for the WOT, and had a GOP prodding him on.

    In retrospect, Congress should have broken with tradition long ago, and abandoned their wayward party leader.
    Fat Chance.

  10. At BC:
    "Obviously, when it becomes clear that Musharraf is about to lose control of Pakistan's nuclear weapons we need to send special-ops guys in and seize Pakistan's nuclear arsenal. Simply destroying their nuclear weapons with an air assault isn't good enough because the bomb pits could be extracted from the rubble.

    My prediction is when the time comes to seize the arsenal, what we find are decoys and the real arsenal is Somewhere Else.
    Sign up Boys!
    That one should make Carter's Desert Disaster look like a Picnic!

  11. Peace o' Cake!
    Nichevo said...
    "I have been tacitly assuming this is the case - that we are either in place or plugged into their nuke infrastructure, equipped to perform just such a seizure."

  12. doug, they are delusional over there.

  13. Remember when they tried to do grab and snatch in Viet Nam? Special ops to take out 80 missile sites?

  14. The mystical powers of Special Ops.

    They cannot remember Son Tay or Desert One.

    I participated in some "Spec Ops" stuff that did not make the news, but nothing like raiding missile silos and mobile launchers defended by real Army. Heck the Taliban took out that SEAL Team and the rescuers, not that long ago. The MoH ceremony for the young Naval LT was just a few days ago.

    Pakistani nuckes, they are not Panamanian airplanes, nor US students in Granada. A whole different kettle of fish.

    Much as I think of 'em, the Ranger Bn would be over streched, invading Pakistan.

  15. While in the despots backyard, things are going from "Bad" to "Worse"

    Police Will Prevent Bhutto Rally Near Pakistani Capital, Official Says

    ISLAMABAD, Pakistan (Associated Press) -- The party of former Prime Minister Benazir Bhutto vowed Wednesday to hold a rally near the Pakistani capital to protest emergency rule despite threats from officials to crush it.

    Lawyers, meanwhile, scuffled with police during a third day of protests against President Gen. Pervez Musharraf's weekend declaration of a state of emergency.

    Attorneys' attempts to demonstrate have been repeatedly put down with police force. However, a violent clash with Bhutto's supporters would dramatically escalate the political crisis engulfing a country that is also battling rising Islamic militancy.

    "We denounce the government ban, and want to make it clear that our supporters and leaders will reach Rawalpindi for the rally," Babar Awan, a senior member of her Pakistan People's Party, told The Associated Press.

    The mayor of Rawalpindi, a garrison city just south of Islamabad, said police would be out in force to prevent anyone reaching the park where Bhutto hoped to address supporters on Friday.

    "We will ensure that they don't violate the ban on rallies, and if they do it, the government will take action according to the law," mayor Javed Akhlas told the AP.

    Akhlas said there was a "strong threat" of another suicide attack against Bhutto, who escaped a blast during a procession welcoming her home from exile in Karachi on Oct. 18 that killed more than 140 people.

    A suicide bomber blew himself up a few hundred yards from President Gen. Pervez Musharraf's office in Rawalpindi on Oct. 30, killing seven people.

    With the encouragement of the United States, Musharraf had been holding talks with Bhutto that were widely expected to lead to a power-sharing arrangement after parliamentary elections slated for January.

    But with the constitution suspended, authorities have detained thousands of opposition activists, lawyers and human rights workers, put a stranglehold on the media and suggested the election could be delayed by up to a year.

    Officials say about 2,500 people have been detained, though opposition parties put the figure at 3,500.

    2,500 or 3.500. bet there is nary a jihadist in the bunch. Secular lawyers and Costitutionalists. that's who as been setained, from the reporting.
    In Swat the Army falls back, or so the reports goes.

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  17. Remeber, hermanos, that it was decided at Tota Bora, it was a bridge to far for the Ranger Bn, or so thought the future "Hero of Iraq", General Tommy Franks.

    To far for them to go, not enough support nor positive intel, for US troops, a raiding Ranger Battalion, to be sent to kill Osama.

    Let alone capture 48 some nuclear warheads. Plus the reactors.
    And the spent fuel.

    Such a large Operation, against cnventional forces, wouldn't be "Special" for very long.

  18. Back when ABC first started to report Taliban Camps and raids gearing up 3 years ago, it was "Too Far" for the USAF.

    Things just get easier over time for those who watch and wait, so all's well!

    Just don't say nothin about kickin the can!
    ...that's reserved for Bubba.