Economist Henry Kaufman says senior management was caught up in frenzied pursuit of short-term gain. But "Dr. Doom" still has faith in the American economy's resilience.
Senior managements and the boards of directors of major financial institutions such as Citicorp (C) and Merrill Lynch (MER) failed to perform their proper corporate governance roles, helping to precipitate the financial markets crisis of recent weeks, says Henry Kaufman, president of Henry Kaufman & Co. and a board member at Lehman Brothers (LEH). The Federal Reserve also failed to understand risks created by the proliferation of new financial instruments, says Kaufman, who previously served on the Federal Reserve Bank of New York. Here are edited excerpts from a recent conversation.
Showing posts with label Citigroup. Show all posts
Showing posts with label Citigroup. Show all posts
Wednesday, February 6, 2008
Wednesday, December 5, 2007
Bill Miller's simple plan for Citi
Bill Miller, the legendary Legg Mason Value Trust fund manager, owns shares of Citigroup, the embattled financial services giant that is looking for a new chief executive officer. And Miller has a suggestion about the type of person that the bank should hire to replace the ousted Charles Prince.
He said the bank should find someone who has a similar management style to Hewlett-Packard CEO Mark Hurd. Hurd replaced Carly Fiorina in 2005 and has led a dramatic turnaround at HP, mainly by cutting costs and focusing the computer company on what it does best.
He said the bank should find someone who has a similar management style to Hewlett-Packard CEO Mark Hurd. Hurd replaced Carly Fiorina in 2005 and has led a dramatic turnaround at HP, mainly by cutting costs and focusing the computer company on what it does best.
Wednesday, November 14, 2007
Citigroup’s Next CEO
As regards who Citigroup’s next CEO should be, I was going to post one of our “Questions of the Week,” and ask what you think--but then decided that, this time, I want first crack. So here goes.
My first choice: Wells Fargo Chairman Dick Kovacevich. Dick is by just about all accounts the most effective, well-respected, banking executive in the business. He has a proven track record running a large, diversified organization--and he gets results. To put a number on it, Wells has earned more than 16% on its equity, on average, over the past 10 years. Over that period, the company’s earnings per share grew at an average annual rate of 14%. Dick even knows how to do deals and make them work. Plus, he should have no trouble attracting and retaining top talent, and can motivate individuals up and down the organization.
My first choice: Wells Fargo Chairman Dick Kovacevich. Dick is by just about all accounts the most effective, well-respected, banking executive in the business. He has a proven track record running a large, diversified organization--and he gets results. To put a number on it, Wells has earned more than 16% on its equity, on average, over the past 10 years. Over that period, the company’s earnings per share grew at an average annual rate of 14%. Dick even knows how to do deals and make them work. Plus, he should have no trouble attracting and retaining top talent, and can motivate individuals up and down the organization.
Sunday, November 11, 2007
Prince Alwaleed: Why Chuck had to go
In the midst of staggering losses and intense public scrutiny, former Citigroup CEO Charles O. Prince III could always count on the support of the company's biggest individual shareholder: Prince Alwaleed bin Talal bin Abdul Aziz al Saud. Less than a month ago, the Saudi prince, who owns 3.6% of the company, even dismissed a sharp drop in earnings as a "mere hiccup."
But Fortune has learned that Prince Alwaleed and other major shareholders agreed last week that, if Chuck Prince didn't offer his resignation after the news of the additional $8 billion to $11 billion writedowns, they would publicly call for his ouster. In an exclusive interview, Prince Alwaleed, speaking by phone from the desert outside Riyadh, talked with Fortune's Andy Serwer and Barney Gimbel about the final days of Chuck Prince's tenure at Citigroup.
But Fortune has learned that Prince Alwaleed and other major shareholders agreed last week that, if Chuck Prince didn't offer his resignation after the news of the additional $8 billion to $11 billion writedowns, they would publicly call for his ouster. In an exclusive interview, Prince Alwaleed, speaking by phone from the desert outside Riyadh, talked with Fortune's Andy Serwer and Barney Gimbel about the final days of Chuck Prince's tenure at Citigroup.
Monday, July 30, 2007
Invest Like Prince Alwaleed
Prince Alwaleed bin Talal, the billionaire investor often referred to as the “Warren Buffett of the Middle East,” has announced that he will soon bring his investment company, Kingdom Holdings, public on the Saudi Arabian exchange.
Prince Alwaleed is primarily a distressed value investor who made at least half his $24 billion net worth in three investments back in the nineties: Citigroup, AOL, and Apple. It’s hard to think of these at distressed value positions but each of these stocks was considered on the brink of death right when the Prince began loading up. It’s worth seeing what positions he’s in now to see where he still finds value.
Full Article
Prince Alwaleed is primarily a distressed value investor who made at least half his $24 billion net worth in three investments back in the nineties: Citigroup, AOL, and Apple. It’s hard to think of these at distressed value positions but each of these stocks was considered on the brink of death right when the Prince began loading up. It’s worth seeing what positions he’s in now to see where he still finds value.
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