This is from the front page of Friday's Financial Times: "New fears over
subprime fallout." Well, that was in the morning; and by the 4 o'clock
close the three FT exemplars of very troubled financial institutions had
gone down some more. Citigroup by 7% on Thursday and another 2% on Friday
to $37, down from a year high of $57. But the real damage was in the two
main insurers of municipal bonds, Ambac, which was down 20% for the day,
has virtually collapsed over the year from $96 to $23, with the prospects
of death coming closer; and MBI (about which I have written before), whose chicanery has been most successful until recently. This
stock fell nearly 7% to $35 from the year high not so long ago of $76.
I hasten to add that I have a big short in both Ambac and MBI.
Do you recall my Friday posting, asking what Robert Rubin thinks of
the Citigroup mess? We had our answer in all of Saturday's
papers: Citigroup, of which Rubin is chairman of the executive committee,
is pushing out Charles O. Prince III as CEO. I suppose the question is
how high Prince's severance package will be.