I don’t think it is fully understood among my old colleagues that it is a new day on Wall Street. The beat they once covered no longer exists.

Citigroup may look the same, but, Audit readers, it is now a ward of the state, a welfare case.

It is one of three banks to receive $25 billion from the U.S. government, which bought preferred shares only because no one else would.

The other two banks that got that much, Wells Fargo, and JP Morgan Chase, didn’t need it as badly, as this stock chart plainly shows.


And unlike most welfare cases, Citigroup is distinctly undeserving. As we’ve written elsewhere, courageous reporting in the alternative press earlier in the decade demonstrated that Citigroup led the mainstreaming of subprime lending, principally through its CitiFinancial unit, a successor to the notorious Associates First Capital, which Citi bought in 2000. Indeed, it is doubtful that any bank had a more extensive conveyor belt running from subprime mortgage to substandard CDO than Citi.

Krawcheck’s career at Citi, from 2002 to 2008, pretty much coincides with the planting of the seeds of destruction that Citi is currently wreaking on its shareholders, its borrowers, its CDO-buying pension-fund clients, and the world at large. Was it her fault? No. But she was a senior executive, the CFO, for pity’s sake.

It seems to me that Wall Street’s new era would give rise to a more assertive, accountability-oriented culture among the financial press. I see signs of it, but this piece feels very August 2008.

Oh, I forgot to mention one more bit of info, in the last paragraph of the Times piece, that Krawcheck would like to get across, apparently:

Ever restless, she’s also hesitant to stay on the sidelines. From her apartment in Manhattan, where she lives with her husband, a fund manager, and their teenage son and daughter, she is putting out feelers, looking for another job in wealth management.

 

Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014).

Follow Dean on Twitter: @deanstarkman.