Value Investing News

Marketwatch claims that Chuck Prince, CEO of Citigroup, may be resigning in the very near future. This all comes in the wake of the mega-bank taking large subprime-related charges, with prospects of more to come. Oh, the shame and disgrace! Oh, how the mighty have fallen! The scriptures say, in Proverbs (16:18), that "pride goes before destruction, and a haughty spirit before a fall." Though the Marketwatch article doesn't go into it, Fortune magazine had a great feature article about a year ago or so that featured J.P. Morgan Chase CEO Jamie Dimon. That article detailed how Sandy Weil (previous CEO of Citigroup) forced Jamie Dimon out of Citigroup and helped install Chuck Prince as new CEO. Dimon, meanwhile, took over at J.P. Morgan Chase. This all happened around 2003/ 2004. Since then, Citigroup has posted okay, but unspectacular numbers, while Dimon improved J.P. Morgan quite a bit (it was in pretty bad shape when Dimon took over and, as the Fortune article noted, he went to work with cost-cutting measures). Now, in Buffett-speak, the tide is going out and we are finding out who was swimming naked. We still don't know whether Dimon is wearing a suit, or whether he is simply a little further out in the water and the receding tide has yet to expose him. But, at least in the Citigroup board of directors' estimation, it looks like Prince traded his bathing suit for risky loans and other such financial trickery, and Citigroup will have to suffer a while because of it. It would be almost too sweet (and very possible) if Dimon were asked to return to Citigroup to fix Prince's mess. Maybe I could get a movie deal to make an animated fairy tale based on it: the rightful heir to the banking throne would ride triumphantly back into town on his fine steed, sun shining from his armor, as he readied his kingdom to fight off the oncoming horde. As he rode in, his eyes would briefly meet with the tale's recently-deposed villian, being led off in shameful rags to shovel slop in the dugeons for the rest of his mercifully-short days. Of course, my tale would omit the real-life part of the story where the villian actually gets led off to his various other castles and lives a life of leisure, funded by the generous severance package given him by the townspeople he lt down.