2009-03-22 — blogspot.com
The house never sold because Citigroup had it priced way above market. That is incompetence, lack of concern, an overworked unit or a combination of the above. I vote for the latter.
... In November, the government agreed to limit Citigroup's losses on a portfolio of $301 billion of troubled assets. Last month, the government issued a similar guarantee to Bank of America covering $118 billion in troubled assets. In both cases, the companies agreed to absorb an initial increment of losses -- about $30 billion for Citigroup and $10 billion for Bank of America -- with the government absorbing 90 percent of any subsequent losses.
When taxpayers are guaranteeing 90% of the losses above $30 billion, a figure that was no doubt reached months ago, there is only a 10% incentive to do a job well.
Citigroup Chief Executive Vikram Pandit received nearly $11 million of compensation in 2008.
A month earlier, he testified to Congress that his compensation for 2008 was just $1 million.
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