A SINGLE VIEW

Daniel Tarullo is an arrogant, pretty much useless jerk that never had a real job in his life.  Oh, that is not to say he is stupid…far from it.  He's just a graduate of Georgetown and Harvard Law who taught at both places, was appointed a Governor of the Federal Reserve in 2009 but is an arrogant, useless jerk.

He wanted to to the Secretary of the Treasury but was more disliked than Larry Summers (and no where near as smart I suspect).  That job went to Jacob/Jack who is no where near as smart as either of them…I suspect.  Lately, he has wanted to become the Vice Chairman but that job of course is going to Stan Fisher who is smarter than all of them and a sweetheart of a guy.  So Daniel Tarullo and his ego is one pissed off guy and is kind of stuck in the job of the head of regulation and supervision which he wrestled away from the New York Fed primarily because Billy the Dud is totally useless and allowed him to walk away with it.  And now Danny Boy is going to make his bones.

You see, way back when, that is when he didn't make it at Harvard, Danny Boy decided that politics might be the best path to ego fulfillment and he joined the staff of Teddy Kennedy.  Danny Boy ran a bunch of wacko left wing stuff for Teddy and won well-earned support.  Who's his Rabbi now?  Well of course it's Crazy Lizzy Warren from the Bay State.  They have one very important thing in common:  knowing nothing about banks they both hate them.

I got to New York on Wednesday and all people were talking about was the Fed's failing grade given to Citicorp in the "stress test."  This was supposed to be a test of capital adequacy during various doomsday scenarios but what most people missed is that this go-around could be decided on either objective or subjective basis.  What is a "subjective basis?"  Who the hell knows.  But here's a comparison: in 2007/08 Bear Stearns, a slop shop, got bailed out and sold to J.P. Morgan (too bad Jamie).  Lehman which was a serious player got tanked because everyone was pissed of at Dick Fuld who ignored every piece of advice and directive he received from his regulators.  That's subjective.

In the present time, everybody was after J.P Morgan and Eric Holder and his blackmail gang got there first.  That got Danny Boy in an even fouler mood: enter Citigroup.

Citicorp was not ignoring suggestions made by regulators.  Citicorp was absolutely convinced that they had complied with what the Fed was looking for.  The people who run Citicorp and the bank are very, very smart people.  Now ask yourself; if these guys had not been so confident, would their CEO have planned to be half way around the world on the day they knew the announcement was to be made?  Of course not.  The decision to deny Citicorp's plan was Danny Boy's.  It was on Citicorp that he made his bones (or so he thinks).  His little cabal on the Board went along with him as did Billy the Dud (you know, after this, "dope" might be a better connotation) but he was him and done at the last minute.  Rumor has it--and I have been unable to confirm this--the Citicorp was given less than 5 minutes notice before the public was informed.  If you're about to be whacked in the Organization, you're given longer to pray.

Why?  Here's my view.  Citi is big.  Citi is an easy target, but in addition, Citi is unlike the other TBTF banks.  Citi is the only international bank in the bunch.  Citi's funds transfer business is monumental and complex;  Citi's most profitable entity is Banco Nacional de Mexico; BANAMEX's funds transfer business just out of IT'S subsidiary in California--Mexican workers sending money home to their families--is huge and the bank was subject to a fraud that cost Citi $250 million.  Danny Boy doesn't like that kind of goings-on because Danny Boy like a great deal of the rest of the stuff he is regulating doesn't understand it.  Subjective decision, and screw the shareholders.

Tarullo has been there for 5 out of an 8 year term.  If Ms. Yellen has a brain in her head, she'll get him the hell out of there now.  What this fool has almost done is to destroy Citicorp's public image and trust which in so doing lays a path for the beginning of a TBTF test.  He's playing with lives here.  It's time some adults got involved.