6 ms·

Worth it just for the email in the middle by a Citi underwriter. http://cybercemetery.unt.edu/archive/fcic/20110310201200/http://c0181567.cdn1.cloudfiles.racks

by patio11 14y ago

Worth it just for the email in the middle by a Citi underwriter. http://cybercemetery.unt.edu/archive/fcic/20110310201200/http://c0181567.cdn1.cloudfiles.rackspacecloud.com/2007-11-03_Citi_Email_from_Dick_Bowen_to_Robert_Rubin_and_David_Bushnell_Re_concerns_financial_issues.pdf http://cybercemetery.unt.edu/archive/fcic/20110310201200/htt... I don't agree with every stylistic choice, but that's some of the best professional writing in the fling-a-firecracker-outside-of-your-silo circumstance that I've ever seen. ("I do not believe our company has recognized the material financial losses inevitably associated with the above Citi liability." is accountant-speak for "THE WORLD IS ON FIRE!")

arethuza 14y ago
Alistair Darling, the UK Chancellor of the Exchequer at the time of the crisis, pretty much did think that the world was going to end - he had the chairman of RBS (one of the worlds biggest banks, possibly the biggest at the time) phone him up and say that he thought they might be able to last 2 or 3 hours. [NB I'm pretty sure I've read they were considering going to what sounded awfully like a wartime "emergency" government if the UK banking sector had collapsed.]
- gadders 14y ago
  I doubt if RBS were the largest at the time. They're big, but they're not as big as JP Morgan, HSBC etc.
  - arethuza 14y ago
    From their Wikipedia page: "Before the 2008 collapse and the general financial crisis, RBS Group was very briefly the largest bank in the world and for some time was the second largest bank in the UK and Europe" http://en.wikipedia.org/wiki/The_Royal_Bank_of_Scotland_Group http://en.wikipedia.org/wiki/The_Royal_Bank_of_Scotland_Grou... Of course, it depends how you decide on the size of a bank... Also they had been on an insane binge of acquisitions, including the ABN Amro deal which was possibly the worst acquisition in history (paying tens of billions with one ring folder of information for due diligence - what could possibly go wrong!).
    - gadders 14y ago
      Interesting. They didn't even have a proper investment banking arm, just primarily fixed income, and not much of a bank network outside of the UK.
      - arethuza 14y ago
        Here is a good documentary about the fall of RBS and ex-Sir Fred "The Shred" Goodwin: http://www.youtube.com/watch?v=fg3K-S5GqBo http://www.youtube.com/watch?v=fg3K-S5GqBo
- SilasX 14y ago
  If their business was that brittle, it should have been in bankruptcy court already, not in 2-3 hours.
wcgortel 14y ago
I sent a similar email to the CEO of my bank in 2007 -- there was a product I was involved in that (it was clear) was not understood by our sales force or by our investors. I'll spare the details, but I was called into his office and reminded that the "e" in email stands for "evidence."
- nicholasjarnold 14y ago
  I cannot express how angry reading comments like this makes me. Clearly many of these guys at the top (bank CEO's, fund managers, ect.) were systematically defrauding everyone in order to turn a larger profit. Call me naive, but isn't this shit (the massive fraud perpetrated on us by banks) supposed to result in hefty jail sentences?
  - wcgortel 14y ago
    I mean, you're justified in a way. I don't think it's fraud though. Consumers are equally complicit. What I mean by that is that as the buyer of a product, you usually would go out and read the reviews, kick the tires, etcetera. At this time, many buyers of investments didn't do that at all. Our sales guys didn't understand the product for sure, but if they had a customer who asked the right question they would have arranged a conference call with me or a colleague, no issue. That happened like, one time. I think the concern that my firm had at this time was principally related to the likelihood that emails like this would hit the public domain at some point. Edit: shameless plug. My stealth mode thing should change this a little bit (for certain investors).
    - SkyMarshal 14y ago
      >Edit: shameless plug. My stealth mode thing should change this a little bit (for certain investors). Plugging a stealth mode startup? C'mon man spill it, you know you want to, and now we're all curious.
      - wcgortel 14y ago
        My thing takes your investment capital and cohorts it sensibly against your time horizons. It's new. A lot of what you get from an is along the lines of "Oh, you want this money in seven years huh? You should probably just buy a bunch of bonds." That's crazy. A .15% change in interest rates will wipe out a year's worth of interest on the long bond. My thing is an invented modification of a CDO/CLO that keeps your global risk sensible while making sure that your short term objectives are preferentially met. It also makes really customized risks available at almost no cost. It's cool. PM me for details.

by patio11 14y ago

arethuza 14y ago

Alistair Darling, the UK Chancellor of the Exchequer at the time of the crisis, pretty much did think that the world was going to end - he had the chairman of RBS (one of the worlds biggest banks, possibly the biggest at the time) phone him up and say that he thought they might be able to last 2 or 3 hours. [NB I'm pretty sure I've read they were considering going to what sounded awfully like a wartime "emergency" government if the UK banking sector had collapsed.]

gadders 14y ago
I doubt if RBS were the largest at the time. They're big, but they're not as big as JP Morgan, HSBC etc.
- arethuza 14y ago
  From their Wikipedia page: "Before the 2008 collapse and the general financial crisis, RBS Group was very briefly the largest bank in the world and for some time was the second largest bank in the UK and Europe" http://en.wikipedia.org/wiki/The_Royal_Bank_of_Scotland_Group http://en.wikipedia.org/wiki/The_Royal_Bank_of_Scotland_Grou... Of course, it depends how you decide on the size of a bank... Also they had been on an insane binge of acquisitions, including the ABN Amro deal which was possibly the worst acquisition in history (paying tens of billions with one ring folder of information for due diligence - what could possibly go wrong!).
  - gadders 14y ago
    Interesting. They didn't even have a proper investment banking arm, just primarily fixed income, and not much of a bank network outside of the UK.
    - arethuza 14y ago
      Here is a good documentary about the fall of RBS and ex-Sir Fred "The Shred" Goodwin: http://www.youtube.com/watch?v=fg3K-S5GqBo http://www.youtube.com/watch?v=fg3K-S5GqBo
SilasX 14y ago
If their business was that brittle, it should have been in bankruptcy court already, not in 2-3 hours.

wcgortel 14y ago

I sent a similar email to the CEO of my bank in 2007 -- there was a product I was involved in that (it was clear) was not understood by our sales force or by our investors. I'll spare the details, but I was called into his office and reminded that the "e" in email stands for "evidence."

nicholasjarnold 14y ago
I cannot express how angry reading comments like this makes me. Clearly many of these guys at the top (bank CEO's, fund managers, ect.) were systematically defrauding everyone in order to turn a larger profit. Call me naive, but isn't this shit (the massive fraud perpetrated on us by banks) supposed to result in hefty jail sentences?
- wcgortel 14y ago
  I mean, you're justified in a way. I don't think it's fraud though. Consumers are equally complicit. What I mean by that is that as the buyer of a product, you usually would go out and read the reviews, kick the tires, etcetera. At this time, many buyers of investments didn't do that at all. Our sales guys didn't understand the product for sure, but if they had a customer who asked the right question they would have arranged a conference call with me or a colleague, no issue. That happened like, one time. I think the concern that my firm had at this time was principally related to the likelihood that emails like this would hit the public domain at some point. Edit: shameless plug. My stealth mode thing should change this a little bit (for certain investors).
  - SkyMarshal 14y ago
    >Edit: shameless plug. My stealth mode thing should change this a little bit (for certain investors). Plugging a stealth mode startup? C'mon man spill it, you know you want to, and now we're all curious.
    - wcgortel 14y ago
      My thing takes your investment capital and cohorts it sensibly against your time horizons. It's new. A lot of what you get from an is along the lines of "Oh, you want this money in seven years huh? You should probably just buy a bunch of bonds." That's crazy. A .15% change in interest rates will wipe out a year's worth of interest on the long bond. My thing is an invented modification of a CDO/CLO that keeps your global risk sensible while making sure that your short term objectives are preferentially met. It also makes really customized risks available at almost no cost. It's cool. PM me for details.