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ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
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May 28, 2008 4:07 PM ET
The top executives of Citigroup, Merrill Lynch and Bear Stearns had no idea what their firms stood to lose from the subprime crisis, as a result of poor business practices and a lack of transparent financial data. At least, that’s the take of former Securities and Exchange Commission chairman Harvey Pitt. “As the crisis was starting, the CEOs would get up and say, ‘I lost $4 billion.’ Later they would say, ‘The figure is $7 billion,’ and months after that they’d say, ‘It’s $11 billion,’’’ Mr. Pitt said at a U.S. Chamber of Commerce conference in Washington. “There’s only one concrete conclusion you can draw: They did not know what they were talking about.” Mr. Pitt, a Republican who now heads Kalorama Partners, a consulting firm, did not single out any CEOs by name. “This is pretty much an old story,” Merrill spokeswoman Jessica Oppenheim said. John Thain replaced Stan O’Neal as Merrill’s chief executive in December. Citigroup spokeswoman Shannon Bell declined comment. Citigroup CEO Chuck Prince was replaced by Vikram Pandit in December. Bear Stearns spokeswoman Elizabeth Ventura did not immediately respond to a request for comment. Bear Stearns CEO James Cayne was replaced by Alan Schwartz in January. Mr. Pitt, who headed the SEC from 2001 to 2003, said tighter federal regulation would not have prevented bank losses triggered by their use of complex security instruments tied to subprime banking debt. But greater disclosure of the banks’ leverage and liquidity might have helped, Mr. Pitt claimed. “And the government can play a role in requiring this.” Eugene Ludwig, former head of the Office of the Comptroller of the Currency under President Bill Clinton, agreed that “everyone acted blindly” in the Bear Stearns rescue. But he added that if the government were to require more financial disclosure from firms, it would have to pass regulations to enforce the new rules. That, he said, suggests a greater federal role than Mr. Pitt envisioned.
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