Tuesday, July 16, 2013


 There is nothing going on and I have nothing to write about.  But tomorrow Ben speaks and although he will have nothing to say, everyone will be trying to parse his words and we can comment on the parsing.  Having said that, I might as well say a bit about Citigroup because I got this one bang on and who's going to give you a pat on the back if not yourself.

J.P Morgan got all the blow and rightfully so, but in my mind the performance of C was far more impressive for two reasons: they had a far longer road to travel and the breath and complexity of their business makes them far more difficult to manage.  But manage it they did.  A couple of years ago they realized that they had a fabulous overseas network but unless they straightened out their domestic business, full value from years of international relationships would never be realized and that is precisely what they did.  They played "little ball" overseas, collecting the simple profits from a huge commercial banking network whilst brutally rationalizing non-core activities and throwing out the door the capital gobbling legacy assets at a record pace.  It has been--so far--a hell of a performance; I look forward when they can begin to pay real attention to that international network and provide it with the full management time and capital that it really needs.  There is a way to go but I wouldn't bet against this bunch.  Boldly, I will make another prediction:  The return of investment (capital) to shareholders, when allowed, will not be as great a some people expect.  Investment in the business will come first.  Two financial fortresses on Park Avenue, one at 270 and the other at 399 will be a good thing to see and may be needed if our Euro pals keep mucking about without a compass much less a road map.

Anyway, without making stuff up that's all I have.  My Really Smart Friend, Larry is wandering around New York, Washington and all the centers of impotency on the East Coast so maybe I can get a few insights from him.  Soon I hope.  I may have to go outside and melt, thus ending it all.  Whew, is it hot.

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