Friday, January 9, 2009

Rubin retires from Citigroup

Robert Rubin, finally resigned from Citigroup today, and his resignation letter read like a proffer designed to deter lawsuits. A year ago, he said that the financial system problems were because "a more educated electorate" needed to hold politicians accountable.

Rubin pushed Citigroup to increase risk, and Citi's CEO, Chuck Prince, who didn't "know a CDO from a grocery list" relied on Bob Rubin for advice and support.

Christopher Whalen, managing director of Institutional Risk Analytics said, "Robert Rubin, in my opinion, spent a decade neglecting his duties as a director, just judging by their performance...It's the job of the board to supervise the managers. He had embraced a riskier strategy for a bank that was ... already a high-risk bank"

I'll let NY Mag dissect Robert Rubin:

In both interviews, he refused to accept any responsibility for egging on the risk-taking that led to Citi's travails, claiming that as an emeritus board member he really didn't know anything about the day-to-day stuff that was going on. As he told the Journal:

"The board can't run the risk book of a company," he said. "The board as a whole is not going to have a granular knowledge" of operations.

And Newsweek:

"Actually, I'm probably close to 20 years beyond which I had a granular knowledge [of financial details]."

So, sure, even though he "knew what a CDO was," as he told the Journal, he wasn't expecting that anyone would actually, like, listen to him when he told the bank to grow their holdings of them or, furthermore, when he said "the only undervalued asset class in the world is risk." After all, he was just a doddering old man! And:

"I wouldn't run a financial institution based on someone's view about what markets would do."

Not that he wasn't worth the $115 million (excluding stock options) he took in from Citi in the past nine years:

Mr. Rubin said his pay was justified and that there were higher-paying opportunities available to him. "I bet there's not a single year where I couldn't have gone somewhere else and made more," he said.

Because after all, he was making some important decisions in the exact year that that company lost half its value. Or so he says when the Journal asks what he thought he'd accomplished, over that time period.

"I think I've been a very constructive part of the Citigroup environment. That has become particularly manifest since August '07. I have been very involved."

Oh God. This is so awkward, we actually closed our eyes. What was his strategy here? "I will begin by defending my salary, which I will later say was given to me for basically fly-fishing, then I will suddenly cop to being really involved during the worst possible moment in the bank's history"? Ugh. It's like when Angelina Jolie tried for ages to be like, "Brad and I only fell in love after he was divorced," and then let slip to Vogue about how they fell in love on the set of Mr. and Mrs. Smith, which they filmed when he was totally still married to Jennifer Aniston. Only all at once in the same interview. Anyway, Rubin should probably have consulted with Angelina before trying to work the press in his favor. She might have convinced him to avoid what will surely be pointed to as the "inflection point" of his fall from grace.

What a difference between sports and Wall Street. See below!

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