From Across the Curve:
The Citibank story is certainly the top story of the day. I know the news broke in the middle of the night but it seems to me that after 15 months of this and after Bear, and Freddie and FNMA and AIG and Lehman that the markets are inured and somewhat desensitized to news which prior to August 2007 would have been viewed as momentous.
Effectively the taxpayers are propping up an outfit with $2 trillion in assets and equity markets are screaming. I guess I think that there should be a deeper concern at our plight and the realization that the problems which infect our system could run so deep.
It is also ironic that Citibank is too big to fail and requires rescue. The regulators encouraged them as the firm spread its tentacle across the financial landscape. The new Administration should make its first order of business a review of the risk still inherent in the system. JPMorgan is an aggregation of JPMorgan, Chase, Manny Hanny, Chemical Bank, Texas Commerce Bank, National Bank of Detroit Bank One and First Chicago. That makes no sense and if the new administration wishes to establish “change” then they should begin by splitting up these supersized entities and establishing them as new firms which are not too large to fail.