Daily Archives: March 13, 2009
“Shareholder value is a result. Not a strategy.”
Jack Welch, former CEO of General Electric
Citi and Bank of America are being intellectually dishonest. It’s probably true, both companies have operating profits from the various lines of business in January and February. However, the problem hasn’t changed; it’s the quality of the assets on their balance sheets. Did anyone ever question whether Bank of America could make money with their retail banking operations? No. Did anyone question Citi’s ability to post a profit from investment banking operations? No. These two CEOs should leak some more “internal memos” and write more op-ed articles in the Wall Street Journal, because apparently investors are fooled (for now).
All it takes from Citi or Bank of America to turn an operating profit is a hundred plus billion dollars in bailout money.
Commentary by Caroline Baum
March 12 (Bloomberg) — “Counterfactuals from such flawed structures cannot form the sole basis for successful policy analysis or advice, with or without the benefit of hindsight.”
Even if one missed the headline (“The Fed Didn’t Cause the Housing Bubble”) and the byline (Alan Greenspan) on the op-ed in yesterday’s Wall Street Journal, there could be no confusion over authorship: That “Master of Garblements” and former Federal Reserve chairman was back to defend his legacy. Continue reading