Oh, the irony, the stupidity and the hubris of the big boys on Wall Street and the complicit Bushite-McSame GOP politicized agencies.
Citigroup thought it had Wachovia in the bag.
Yes, that Citigroup, whose director and chair of its executive committee has been Robert Rubin, the glib and greedy
"What meltdown?" Financial guru who blamed everyone but the financial institutions for the catastrophe, and under whose watch, Citigroup in January of this year had written down more than $24 billion in losses due to "greed, cynicism, bad judgment" and imprudent high risks.
For more about the questionable Mr. Rubin, the darling of the Democratic Capitol Hill leadership, just enter Rubin on the quick search at this site.
Of course, the politicized FDIC should not have allowed travesty, but held an auction for Wachovia, instead. But the avarice of Citigroup and other Wall Street perps of this financial system crisis coupled with a Bushite FDIC that does the bidding of this regime's corporate financial cronies equals a buyout that is fraught with danger.
In addition, the lessons of the Enron debacle during this administration were ignored by this criminal regime's deregulation agencies and by the financial institutions irrational engineering for profit.
From a commentary at
The Guardian:
"Start with the Houston-based energy trader's notorious lack of transparency. After Enron's implosion, everyone talked about how important it was to be able to understand how a company makes money. Now raise your hand if you understand how a modern financial services firm makes money. No hands? The truth is, there is no way to understand. These companies are as opaque as Enron. Just as Enron had off balance-sheet vehicles - SIVs - that allowed it to book earnings and hide debt, Citigroup and other financial institutions had structured investment vehicles that did the same. Indeed, Citigroup had to take almost $50bn of SIVs back on to its balance sheet after they ran into trouble. It would be nice if the accounting rule-makers would grasp this basic tenet: if they want to hide it, we want to know about it."Of course, SIVs are only a small manifestation of the deeper problem, which is the evolution of financial engineering into a dark art. Enron now seems like the canary in the coal mine. After its bankruptcy, Steve Cooper, who was in charge of restructuring it, told the Wall Street Journal his task might leave him "in a wheelchair and drooling" due to the complexity of its financial structures and the "unbelievable amount of debt accumulated around the company". Doesn't that sound like our entire financial system?
"Just as Enron packaged bad investments into a private equity fund run by its chief financial officer, Wall Street packaged mortgages given to people who couldn't afford the payments into sleek new instruments called RMBS and CDOs. But Enron's machinations couldn't make the losses go away, and Wall Street's shiny acronyms can't turn a defaulted mortgage into good money.
"As for the lessons we've forgotten, how about this one: financial statements aren't supposed to be fairytales. Enron was castigated for its abuse of mark-to-market, or fair value, accounting. This is supposed to allow investors to see what the market says a security is worth, instead of just what the company paid for it. Employed correctly, it makes a company's finances more transparent. But we all joked that Enron didn't mark to market - it marked to myth, to whatever it wanted them to be. In this, the US regulatory agency, the SEC, was complicit, because it signed off on Enron's use of this accounting and never ensured it wasn't abusing the rules.
"Which leads to the most sobering repeat lesson of all. Most of the believers in the free market only believe in it when it is going their way. When it doesn't, it's someone else's fault. Enron's former leaders often cited their free-market beliefs. Its demise, they said, was due to a short-sellers' conspiracy."
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