Today was supposed to be Part II on the trip but I've been trying to get as much as I can on the latest goings-on with Citicorp.
As predicted, the Feds have jumped in with all hands turning what is right now a $250 million loss from a fraud into a criminal investigation into money laundering along with the State of Massachusetts, the home of…you guessed it…Crazy Lizzy Warren. Make no mistake, this entire thing is running through Warren's office with our boy Dan doing the heavy lifting on the regulatory side. Lizzy wants to make her bones on this one and to hell with anything or anyone that stands in her way. This will ultimately result in another multi-billion dollar extortion on the part of the Feds for--let's be honest--a lousy $250 million that doesn't even reach the level of "material." Citi will be forced to admit what bad boys they were and promise that they will never do it again. Unless the Administration wishes to identify the origin of the millions of money transfers that go through Banamex's California subsidiary, the money laundering whispers will go away as they will discover millions of illegals. This Administration does not want to do that.
But, and here is Lizzy's big prize, what she would really love to do is down size Citicorp and isn't Mexico a wonderful place to start? Look for her to start bleating about that in the next few weeks. And for those of you who like this sort of thing, wait for the reaction of Chuck Schumer when she does. This could be monumental. It could also shape the face of American banking for quite a while. Watch. Part II tomorrow
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