The Citi Never Sleeps

The first time I visited Brazil back in 1994 I remember being surprised by the fact there were billboards all over Sao Paulo stating in english “The Citi Never Sleeps” with the Citibank logo.

I guess it was sleeping as it made at least $306 billion in bad loans.

Check out this Time article from 1965. It’s entitled “We Are All Keynesians Now”. Redux in 2008.

Economists talk about smoothing out the business cycle. Hopefully somewhere along the way we will learn that unbridled capitalism on the one end is too much of a temptation for greed and unbridled socialism on the other end is too much of a temptation for a different kind of greed (anyone want a nice dacha, cheap?).

We need free markets but we need to have a legal and regulatory framework that absolutely protects people and their property rights. Taking undue risk with people’s investments is a violation of fiduciary responsibility and in my opinion is akin to theft. And the government has a fundamental responsibility to ensure that property rights are respected in society. Otherwise the whole system crumbles.

This is not about sub-prime mortgages or credit swaps or derivatives. It’s about greed and people taking wild risks with other people’s money. I’d like to see a few hundred Wall Street bankers go to jail for a long time. Then you would see far more adherence to the fiduciary responsibility.

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0 Responses to The Citi Never Sleeps

  1. Rob says:

    The Americans are investing $20 billion in C, and guaranteeing their assets. The government can now dictate executive compensation and bonuses.

    Citigroup is also building our new courthouse in Moncton. It’s interesting that a company partially owned by the American government will own a Canadian government facility.