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Citi Is Stuckey Too Constrained

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by Felix Salmon
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Nov 06 2007 12:00am EDT

Citi: Is Stuckey Too Constrained?

Jules: You sendin' The Wolf?Marsellus: Feel better?Jules: Shit Negro, that's all you had to say.

Rick Stuckey is the Winston Wolf of the financial world, screeching into problem areas and cleaning them up with great professionalism and no panicking. He managed the LTCM fiasco, and now he's been put in charge of Citigroup's subprime portfolio.

Which is all well and good, but I think that if Bob Rubin and Win Bischoff were really serious about washing out these stables, they would have given Stuckey more than just $43 billion in subprime-backed assets. After all, Citi's mark-to-model portfolio now totals $135 billion, an increase of $40 billion in just three months, and I doubt that the problems in it are confined entirely to subprime. Are there securities in there backed by option-ARM prime mortgages, or commercial real estate lending? Are there bridge-equity lines, or impossible-to-sell loans to private-equity shops? Citi isn't saying, and it seems that they're discouraging Stuckey from even asking.

If you're sending in The Wolf, you want him to deal with everything, not just the worst of the mess.

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