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October 12, 2007

James Wolfensohn Visiting JP Morgan? Hmmm...

This usually isn't my thing, the non data-driven rumor thing, but given all the hubbub around Citi and Chuck Prince what could I do? A friend of mine told me that they saw none other than Mr. James Wolfensohn strolling into JP Morgan just a short while ago. Maybe he's just making a deposit. Um, probably not.

Let's not forget that Mr. Wolfensohn is Chairman of Citi International's Advisory Board, as well as a Senior Advisor to Citi itself, so maybe, just maybe, there is something more substantive going on. Further, did you know that JPM's stock price performance has kicked Citi's butt over the past five years, by a factor of 3? Is James there to discuss jump-starting Citi's growth by purchasing some of JPM's global banking operations, or perhaps generating some cash and slimming down the Citi colossus by offloading some overseas assets to its better-performing global competitor?

You be the judge. But with all the heat Prince is taking for Citi's performance, and in light of the recent reorganization, investors and clamoring for him to do something. And maybe Mr. Wolfensohn's visit is part of the something.

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Comments

Yaser Anwar

I guess now we know what they were meeting for!

phil

superconduits...

Jason

jck:

That's not really fair, jck. Chuck Prince hasn't been in power for 10 years, nor has Jamie Dimon. They've both been around 5 years, which is why I think Roger's comparison is apt. Citi shareholders can only wistfully dream about Citi's numbers if Sandy hadn't kicked out Jamie.

jck

Roger, I was just having fun...The performance of C dwarfs JPM over 10 years (something like +95% vs +16%) and it will be a long time before JPM catches up.This being said, you are right, short term rules.Citi is too big for its own good, they need a hatchet man and the one in charge isn't one.

Roger

That is an interesting but irrelevant question, jck. You and I both know the answer. But unfortunately institutional memory isn't that long-sighted, and neither are Chuck Prince's moves. It's pathetic what's come of an over-focus on short-term performance. So my 5 year time frame is really longer than it should have been. Bottom line, you and I both know Citi is in trouble, not because it has bad assets but because it is has too many of them and is not getting the most out of them. Jamie is doing a better job and it is reflected in the stock price. What happened a management regime ago to Citi does not carry much weight with me as to what the future may hold, IMHO.

jck

"did you know that JPM's stock price performance has kicked Citi's butt over the past five years, by a factor of 3?"
How about the past 10 years , Roger ?

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