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Letter: Citibank denies responsibility
Mon, 10/06/2008 9:54 AM | Reader's Forum
It is not surprising that major banks like Citibank have started running away from their responsibility to investors after having wrongly guided their clients into investing their funds in "notes" issued by investment banks like Lehmann Brothers.
In fact Citigroup in the United States itself was on the verge of collapse or has it collapsed? I lost track of Citigroup in the debris of the economic fallout.
The investment advisors and wealth managers of such banks are dim-witted and clueless about is really happening. I do not think any investment advisor should advise his clients to put their money in A+ notes -- I would say that A+ is a risky investment.
These investment advisors never do on their own due diligence into the financial condition of the notes issuers. They rely on rating agencies, the most famous one being Standard & Poor (S&P) for the rating the worth of the notes or bonds or whatever issued by the so-called major investment banks.
Perhaps S&P should change their name to sub-Standard and Pathetic for their failure to do a proper and sincere due diligence about the financial status of the big boys of Wall Street.
The steps taken by the U.S. government to take over the operations of some of the big financial institutions is akin to nationalization. So the great American Capitalist Democracy is now reduced to a miserable third world socialist, or even worse communist, country.
Yet there is no word on what will happen to the executives of these investment houses -- the crooks who cooked up schemes and scams to fool investors, in return getting paid millions of dollars by way of pay packages.
These crooks must be tarred, feathered and hung up by their crotch on Wall Street. By the way how about changing the name of Wall Street to Wail Street with all the wailing going on because of the financial crisis?
YASH
Jakarta
T. Cotton, Pattaya, Thailand (not verified) — Mon, 10/06/2008 - 9:58pm
Does the writer of the letter criticizing Citibank feel that the foreign banks have conducted themselves less responsibly than, say Indonesian banks pre-1998? How many of those bankers went to jail? Banks are service companies which provide products in demand by customers at a point in time. Sometimes the customers don't always understand the products, but do gamblers fully understand the risks they assume, do smokers fully appreciate the risks to their health? Why stop at prosecuting bankers who sold the clients what they were asking for? Why not charge the cigarette manufacturers and the shops which sell the little fags with murder and then we can fill the prisons with offenders and maybe that will solve the traffic problems. But why should bankers and shopkeepers be hung when bombers enjoy pleasant sojourns in jail or remissions of their sentences and claim the attention of Indonesian media ad nauseum?
Where would the witch hunt end? French Revolution deja vu? When is the consumer finally responsible for his own decisions?
The free markets are built around the concept of "caveat emptor". The buyer is responsible for his choices.