Last of Citi for a while

It occurred to me last night that it's likely that Citi management simply does now know some of the things that we used to know when we worked there. There have been so many JDs, so many redundancies, and so forth, that it's no wonder that some of the secrets of Citi's success in the old days have been lost.

I don't mean to trivialize them, but I've remembered four tests that were in fairly common use within Citi a couple of decades ago, and I thought I would write them down. Maybe they would work today.

--Six Words or Less: If you cannot describe a transaction or a project in six words or less, one of two things is happening. Either (1) the transaction or project is too complicated to be executed successfully, or (2) you don't fully understand the transaction. I think I heard this one from Bob White when he was running the Operating Group. (Current situation: "Buy a new corporate jet". No room left to put in the fluff about trading in the old ones. No room for penalty clauses. Just the essence of the deal. Do you do it? No way!)

--The Headline Test: Imagine you are a headline writer for the New York Post. (This is a NYC tabloid that has never been particularly friendly to Citi, for the information of those in other places.) Describe your transaction or project in the most sensationalistic way you can in headline style. I don't know where I heard this, but I used it successfully for more than a decade in the Loss Prevention Unit. (Current situation: "Bankrupt Citi buys new jet". Like it? Think it will sell papers?)

--The Tombstone Test: This is a little esoteric, but imagine that, when deciding to what to put on your tombstone, your heirs decided that this transaction or project was going to be it. Then ask yourself if you would like to be remembered for the ages for this particular transaction or project -- and nothing else. I don't remember the source of this one. Current situation: "He received a $10,000,000 bonus the year Citigroup got government aid".

--The Mother Test: Think of your kindly old mother, in her kitchen in her apron. Explain your transaction or project to her. Once she understands all the nuances of it, does she approve? Or would she send you to your room without your supper? I think I heard this one somewhere in the Marketing department in Citi's Consumer Bank, but I can't say for sure. Current situation: too many instances to mention.

--I'd like to propose an additional test that was prompted by something I recently learned, and I call it the School Test: Determine what kind of academic specialty this project or transaction is closely allied with. Determine what kind of education practitioners of this specialty have. Is this education sufficient that proponents understand and can evaluate all aspects of the transaction or project? Current situation: Did you know that, if you get the degree at Columbia that says you can design derivatives, it will be in "Financial Engineering". Interestingly, you do cannot get it from the Business School or the Department of Economics -- you get it from the Engineering School. No knock on engineers, but you do have to watch them. They get far too focused on how things work, and tend not to consider the bigger picture. Enough said.

Now, I'd like to stop trying to figure out how Citi did what it did and focus instead on more pleasant aspects of life. Best of luck to them in once again becoming a preeminent financial institution.

Still more Citi

Something that I hoped I would never see happen has occurred: the Government has shown that it is smarter and more astute than Citi! Indeed, the seniors at Citi are so tone-deaf that Citi is better off under the management of the US Government.

In olden days, while Citi senior management was not immune to making the occasion dreadful decision, they were right a lot more often than they were wrong. More important, on matters where public opinion was going to be overridingly important, the seniors tended to listen to their more astute juniors. I think of folks like Paul Kolterjahn and Charlie Long whose opinions/instincts were regularly checked by the most senior folks.

Well, Paul is deceased, and Charlie is long gone. Either no one has risen in the organization and brought their common sense with them to take the place of these two gentlemen, or the most senior types have concluded that if they get paid this much money they MUST be infallible.

Both Charlie and Paul would have immediately internalized the episode of the Big Three automakers flying their corporate jets to DC to ask for a handout. Their counsel would have been for Citi to take the penalties, whether the MEP was approved or not, and regardless of the extent of the financial penalties involved, instead of accepting the luxury corporate jet. They would, in a long-vanished Citi, have saved the institution the humiliation of being overtly managed from Washington, DC.

Further down the ranks at Citi in the old days was the expression "FUMU". This acronym (we always loved our acronyms in the old Citi), of course stood for "Fuck Up, Move Up". While it was usually uttered when grousing about someone who had gotten a seemingly-undeserved promotion despite making errors in his/her old job, there was a good side to FUMU. It meant that, if you were doing an outstanding job, making an occasional goof was part of the learning (i.e. management development) process. And it meant that if you were really good, you could get promoted regardless. BUT you had to be really, really good! And, importantly, you had to have a good ear for cognitive dissonance.

What we have running Citi at present, regrettably, certainly and demonstrably are not good, and recent events bring into question their mere competence. And, furthermore, they are totally and irredeemably tone-deaf.

Thank God for the Government! Possibly, under Governmental management, a new management will develop within Citi, and it can return to some semblance of the Citi of the old days.

More about Citi

One concern about Citibank's long-term viability that has been simmering the back reaches of my mind for a couple of years now is whether there is still anyone employed there who knows how to run a bank. I don't just mean someone who can posture for the media and talk in code understood best by financial reporters. I mean someone who knows a routing/transit number from a cusip number, which end of a 10-K to start reading from, that a cash letter isn't a plea to the parents for more spending money. That ACH is not just the first three letters of achooo!

As I look around Citi today for familiar names, I find very, very few of them. True, a lot of the people I knew when I worked at Citi were within a decade of my age, and hence conceivably have retired on their own volition, but I also knew a lot of people at Citi who did NOT have any grey in their hair or wrinkles under their chins a decade ago -- the people who, if Citi is going to be viable in its pared down and resurrected form as a BANK, are absolutely essential for day to day operation.

Many or most of these vital folks did not have MBAs, and a good many did not have college degrees. More than a few joined Citibank a couple of decades ago because the Sanitation was not hiring when they got out of high school, but Citibank was. They started in branches as rack clerks. They started at 111 Wall Street as entry-level clericals in departments with esoteric names like returned items. A few (girls, back in the day) started at 399 Park as pages. Some (guys, mostly) started as tape-hangers in the big data centers.

Over the years, knowledge accreted to these folks, like barnacles on a ship's hull. These people, men and women, knew that if CAS was running 20 minutes late, there was a good chance that TTI would not have its network up by 7 AM and that there would be hell to pay in customer service from people who hoped to get money out of a CAT on the way to work. And, they knew what to tell the customers about it. Especially so after Branch 77, and then after Reg CC.

By the way, is CAS still running? You know, it was built in the 1970-1973 timeframe, and all the original flowcharts vanished when the elevator doors they were taped to opened (they weren't supposed to open -- that bank of cars did not stop on that floor) in the middle of the night and took them to the sump at the bottom of the elevator shafts. What wasn't lost then was lost when Bob White decreed that the vault where the CAS documentation was secured didn't need staffing, and immediately CAS was running on source code and a lot of memories.

I was happy to see Richard Parsons named as the new Chairman today. In his past he has the Dime Savings Bank rescue, and at least he knows what a bank does. Let's hope that he finds enough people still working at Citi who know what a bank does that they can have a dialog.