Postcards
Krawcheck and Spitzer take on Wall Street
July 30, 2009: 2:05 PM ETHas Wall Street regulation worked? As a landmark stock-research settlement--requiring brokerages to spend $460 million over five years on reforms--expired this week, the key man behind the deal, Eliot Spitzer, and two experts, former Citigroup (C) CFO Sallie Krawcheck and Fortune's Allan Sloan, convened at CNNMoney's studios to talk about the progress. I sat in on their conversation. You can view segments on CNNMoney by clicking the links at the end of this post or viewing the entire 27-minute video here.
The panelists agreed on one thing: The best evidence that the reforms actually aided individual investors is that we haven't heard much lately about dishonest stock analysts. (Bad research has mainly come out of rating agencies, which have conflicts of interest that need fixing.) That said, as often happens, the reformers did more than needed, ushering in disclosure rules and red tape that have confused consumers more than helped them with their investment choices.
In Krawcheck's view, at least. Spitzer, whose Dudley Do-Right reputation collapsed with the sex scandal that knocked him from the New York governor's post, pushed back. He likens investors who gripe about excessive regulation to patients who leave the hospital after a cure and say, "But you gave me three antibiotics that I didn't need!" Krawcheck liked the analogy. But over lunch yesterday, as she I recapped the roundtable, she said she wished she had replied to Spitzer: "Too many antibiotics make the patient immune."
Krawcheck, who oversaw Citi's global wealth management unit after her CFO stint, says that financial regulation everywhere has become so complex that consumers often don't understand what they're getting, whether they're buying a mortgage (as she did recently) or a mutual fund. "More is not always better. Better is better," she says. Wall Street firms, she contends, purposely create complex products that are practically impossible to understand because they want to confuse competitors--so as to prevent them from copying and gaining ground.
Where is Krawcheck, 44, going next? Since Citi announced her exit last September--following clashes with CEO Vikram Pandit--the banking world's onetime Most Powerful Woman (and Dell (DELL) board member) has been elusive and mostly silent. That's changing. She told me at lunch that she's come close to accepting a couple of jobs--all in financial services--only to decide that they didn't "hit the bulls-eye." Particularly in this treacherous environment, she says, "there's no use rushing."
My bet: Krawcheck will land somewhere--or maybe announce she's starting her own firm--later this year.
P.S. Click on these links for part 1, 2, and 3 of CNNMoney anchor Poppy Harlow's interview with Krawcheck, Spitzer and Sloan.
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Power Point: Find a new business model
"The world's looking for a new business model."
-- Citigroup (C) CEO Vikram Pandit, defending his leadership, in an interview with CNN Tuesday. During the past week, news media outlets have reported that FDIC Chair Sheila Bair thinks Pandit lacks the retail banking experience to revive Citi and wants him out. Meanwhile, others speculate that Treasury Secretary Tim Geithner believes that Pandit deserves a shot at the turnaround and that a MORE
Jessica Shambora, Writer-Reporter - Jun 9, 2009 5:38 PM ETPosted in: banking, banks, C, CEOs, Citigroup, economy, finance, Postcards, Power Point, Vikram Pandit -
Power Point: Send the right memo
"Our stock price is not an indication of our financial strength."
-- Citigroup (C) CEO Vikram Pandit in a memo to employees sent Monday night. How ironic that Citigroup shares jumped 38% on Tuesday. Citi's stock is so low that it took a gain of just 40 cents to rise so much, percentage-wise, and close at $1.45. Citi's pop was part of a overall surge in the market that had the MORE
Jessica Shambora, Writer-Reporter - Mar 10, 2009 8:03 PM ETPosted in: banks, CEOs, Citigroup, investing, Postcards, Power Point, stock market, Vikram Pandit, Wall Street -
We will survive!
Barack Obama's hair is turning gray. The New York Times reported the other day that a President typically ages two years for every year in the job. Thank goodness our new President is only 47 years old. The way things are going right now, I suspect he'll age twice as fast as other Presidents.
We learned this week that things are worse than we thought. General Electric (GE) CEO Jeff Immelt, MORE
Patricia Sellers - Mar 6, 2009 1:02 PM ET -
Power Point: Accountability starts at the top
"We will hold ourselves accountable for what we do, and that starts with me."
-- Citigroup (C) CEO Vikram Pandit testifying before Congress on Wednesday. The heads of eight of the nation's top banks, which have collectively received $165 billion in government rescue funds, appeared together before the House Financial Services Committee to explain what they've done with the money so far.
The CEOs—including Goldman Sach's (GS) Lloyd Blankfein, Wells Fargo's (WFC) MORE
Jessica Shambora, Writer-Reporter - Feb 11, 2009 7:06 PM ETPosted in: banks, Barney Frank, CEOs, Citigroup, Congress, finance, Goldman Sachs, Jamie Dimon, John Stumpf, JP, JPMorgan Chase, Lloyd Blankfein, politics, Postcards, Power Point, Vikram Pandit, Wall Street, Washington, Wells Fargo -
You lost your shirt? CEOs did worse!
You think you lost a bundle in the market? The CEOs who lead the companies in the upper decks of the Fortune 500 have fared even worse: Their stock holdings in their own companies declined in value by $54 billion last year.
A just-released study by executive compensation consultancy Steven Hall & Partners sums up the damage. For CEOs who head 175 of the top 200 corporations in the Fortune 500, MORE
Patricia Sellers - Jan 22, 2009 2:06 PM ETPosted in: CEOs, Citigroup, compensation, equity, Exxon Mobil, GE, General Electric, General Motors, GM, IBM, Jeff Immelt, Leadership by Geoff Colvin, Lee Scott, Postcards, Rick Wagoner, stock, stock market, Vikram Pandit, Wal-Mart, Wall Street -
CEO apologies and other true confessions
'Tis the season for confessions. First comes denial -- every mortal's classic response in a crisis. But in times like these, any leader worth his or her lofty position and pay recognizes mistakes soon enough. True confession is the mark of a confident leader. So, what's your biggest mistake?
In the past week alone, we've noticed a positive trend: leaders fessing up. "GM has made mistakes in the past," General Motors MORE
Patricia Sellers - Dec 8, 2008 2:11 PM ETPosted in: airlines, apology, auto industry, banks, boards, Bob Rubin, CEOs, Citigroup, confessions, David Neeleman, Detroit, Failure, finance, FRank Rich, Frost/Nixon, General Motors, GM, Iraq, JBLU, JetBlue, Jim Collins, Leadership by Geoff Colvin, management, mistakes, politics, Postcards, Power Shift, Rick Wagoner, Saddam Hussein, Vikram Pandit, Wall Street, Washington -
Citigroup's Pandit gets a lifeline too
The upshot of the government's bailout of Citigroup (C): millions of calmed investors, 350,000 relieved employees, and one CEO who is hanging on to his job at least for a while.
Vikram Pandit's apparent security at the helm of Citi may be a good thing. For all his faults - his failure to get a timely grip on the company's toxic assets, his unconvincing arguments last week that Citi is adequately MORE
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Can Citi shrink its way to transformation?
That whopping reduction that Citigroup (C) announced Monday -- 50,000 jobs, representing 20% of its work force -- turns out to be the biggest cut by a corporation in 15 years. So say the job-trackers at Challenger Gray & Christmas. The largest reduction before Citi's: IBM (IBM), which set out to eliminate 60,000 jobs in 1993.
Vikram Pandit's shrinking of Citi -- part of "one of the greatest transformations in history," MORE
Patricia Sellers - Nov 17, 2008 6:27 PM ETPosted in: Bank of America, banks, Bob Rubin, CEOs, Challenger Gray & Christmas, Citigroup, Dick Parsons, FORTUNE MPWomen, IBM, Jamie Dimon, JPMorgan Chase, Leadership by Geoff Colvin, Lou Gerstner, management, Merrill Lynch, Postcards, Power Shift, Sallie Krawcheck, Sam Palmisano, Sandy Weill, stock market, Time Warner, turnaround, Vikram Pandit, Wall Street, Win Bischoff -
Coopetition, frenemies and mergers in the making
This morning, I read about the potential merger of General Motors (GM) and Chrysler. Then I read about the benign rivalry of two divas of the blog world, Arianna Huffington and Tina Brown. Two stories that have nothing to do with each other? You would think. But actually, they do. They point to a new reality of the business world: Competition isn't what it used to be. Competition becomes coopetition. MORE
Patricia Sellers - Oct 27, 2008 5:14 PM ETPosted in: Ariana Huffington, Arianna Huffington, auto industry, banks, CEOs, Chrysler, Citigroup, Coke, consumer goods, Coopetition, Daily Beast, General Motors, GM, Goldman Sachs, Google, Hank Paulson, Huffington Post, Indra Nooyi, John Mack, Lloyd Blankfein, Martin Sorrell, Microsoft, Morgan Stanley, Muhtar Kent, Pepsi, Postcards, Roberto Goizueta, Roger Enrico, Silicon Valley, technology, Tina Brown, Vikram Pandit, WPP, Yahoo
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Fortune senior editor at large Pattie Sellers has written some of Fortune's most talked-about cover stories, including "Marissa Mayer: Ready to Rumble at Yahoo," "Oprah's Next Act," "Can Meg Whitman Save California?" "The $100 Billion Woman" (Melinda Gates), and "Remodeling Martha" (Martha Stewart). She has helped oversee Fortune's "Most Powerful Women in Business" package every year since its launch in 1998. Pattie is Executive Director of the Fortune Most Powerful Women Summit, the preeminent gathering of women leaders in business and beyond. She oversees MPW programs that enable women leaders to extend their influence and empower the next generation—such as Fortune MPW Entrepreneurs and the Fortune-U.S. State Department Global Women Leaders Mentoring Partnership. Beyond her Fortune duties, she is also developing Live Content across Time Inc. Pattie grew up in Allentown, PA, graduated from the University of Virginia, and started at Fortune in 1984. Her blog, Postcards, is about how power players lead, manage others, and navigate their careers.
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