Too Big to Fail - Really??
I would like to dedicate this next piece to all of my former colleagues throughout the country from Citibank’s Home Equity Division. I spent an amazing 5 years with this group, and although we had a tenuous exit from this business, the relationships we built and the success we achieved together will stay with me forever. The mortgage meltdown caused many of us severe life altering pain, and regardless of what you personally feel about what happened, there were real people in this business that got caught up in the greedy, seedy world of investment banking on Wall Street.
Read on to get an inside view:
My dear fellow Citi Home Equity colleagues:
I am hopeful that this email finds you all well and enjoying your Holiday weekend. It’s been quite a while since I sent a note out to this group specifically, but I’m coming of the heels of watching the HBO movie Too Big to Fail. I’m not sure any of you have had the pleasure (or displeasure) of watching this movie, but I would highly recommend that you do. It’s an incredible movie that outlines the mortgage/economic meltdown in a very succinct and organized fashion. The acting is superb, and includes, Paul Giamatti (who looks exactly like Ben Bernake), William Hurt, Cynthia Nixon (from Sex in the City fame), Ed Asner (Mary Tyler Moore’s old boss), Evan Handler (one of my favs from Californication), Bill Pullman (who plays one of Melinda’s favorites, Jamie Dimon), and many others. I was captivated by the story line from the beginning, as they actually take you on a ride through the Treasury, the Federal Reserve, and the banking world as seen through the eyes of the participants. This is real behind the curtain stuff here folks, and the depiction of what happened unfolds exactly how I suspected all along. For us former CITI employees, watching Vikram Pandit (who was really only there at the tail end of our endeavor) participate in this charade is disturbing at best. As we now know, Citibank played several roles in this meltdown through their participation with mortgage backed securities, the relationship with AIG, as well as the actual lending piece of the equation. Citi sort of escapes playing a major villain in this movie, but for me, I could read between the lines of what actually went down. You see, the investment banks were making so much freaking money bundling loans into mortgage backed securities that they continued to put unrelenting pressure on the banks to constantly lower the criteria for lending. AIG was insuring these loans, and became sort of the fulcrum that almost collapsed the entire financial system. When the government peeled back the onion of what it would mean if AIG failed, they really had no choice but to put the TARP plan in place. It’s funny because the actual term TARP (troubled assent relief program) doesn’t really tell the story of what the government actually did. What it turned out to be was a capital infusion to the banks in order to stimulate lending again. If AIG went down, the entire credit system would have broken down and we would have seen a depression much larger than the one in the 30’s. In hindsight, the problem was entrusting that the banks would actually follow through and start lending again. Well, we all know how the rest of the story goes. Now, the banks are bigger, the executives are still getting paid, and we are all left holding the bag.
The wholesale portion of our Citibank Home Equity Division started right smack in the middle of this greed ridden time frame, and we really didn’t know what hit us. I remember the first time I looked at our Product Matrix. My eyes widened as I knew from past experience that the mortgage brokers would lick their chops at this product and that we could sell these junior liens like crazy. I also knew that I could recruit people rapidly and that I could help the bank grow this division. We expanded faster than any of us could have imagined, and we all enjoyed the ride. Even today, as I looked back at that 5 years time span, I am thankful to have participated. I have guilt over many things I have done in my life, but no guilt whatsoever playing my part in CHE’s rapid growth and success. Many people might look upon our platform as a failure, but I think we all know better. We were working hard, doing our jobs to the best of our abilities, building a business, and forging lasting relationships both internally and externally.
I had such a wide range of emotions as I watched this movie. Like many of you, I experienced a fairly large mid-life trauma as the result of CHE falling apart. I know that there are several of you that have read my book, My Back Nine, where I outline the journey through my career culminating with my CHE experience. Let me explain:
• I felt angry that my run of building great teams and making large sums of money in this business was over, and that Citibank is actually larger now than it was then. I felt more anger after realizing that the actual solution to the problem in late 2008 (the TARP program) DID NOT yield the results they were supposed to. Like mentioned above, the theory was that the banks were supposed to use their TARP money ($700BB) to actually start lending again and stimulate the economy. Well, as we all know that did not happen. What did happen is that the bonuses paid to Wall Street executives actually increased on 2008 and 2009, and most of the folks in the middle (or bottom) of that chain (yeah...you and I) lost their jobs and had life altering experiences as a result. The anger continued as I realize that I personally got caught up on both sides of the equation. I was also one of the homeowners caught up in owning more house than I could afford, just because the bank was willing to lend. I figured that they knew what they were doing. Funny...right? On the other hand, I lost my income and the ability to pay for that house due to the meltdown. Much of this anger was turned inward as I realized that I compounded my professional demise by making many poor personal decisions. A perfect storm.
• I felt empowered by the fact that I now feel a strong sense of detachment to the entire mortgage meltdown. I am no longer in the business, but feel somewhat educated on exactly what happened, and that knowledge helps me come to grips that it wasn’t my fault. I know that may not be the stance of those viewing my resume over the last several years, but I know and that’s most important.
• I felt peaceful that this detachment helps me look from the outside in and not inside out. My life is still very difficult as a result of how this affected me, but that is changing and improving each day. My peace comes from a place deep inside, a place where I know that I am a better person having gone through this turmoil. I was watching the movie, Eat, Pray, Love a few weeks ago, and there was one line in that movie that will stay with me forever. “Ruin is the road to transformation” - Nice…..right?
• I felt pride and joy for my participation in building Citi’s Home Equity Division. In my book I have an entire chapter dedicated to relationships. I feel thankful and humbled that many of my business relationships have become personal. ALL of you fine people fall into that category, and I wish I had more time to rekindle some of these great bonds. I do my best, and e-mails like this are part of that very important piece of my life. Towards the end of the chapter, I wrote about our demise and referenced an e-mail I sent out to our entire staff just before Citi ushered me out the door. The responses I received from that e-mail I still read to this day. Having made an impact of so many of you (and you on me) fills my heart with pride and joy. I know, a bit corny...but you get the picture.
• I felt closure that this all happened in the past and I only use it now as a frame of reference. The anger I mentioned above was short lived and what I mostly feel now are the other aforementioned emotions; empowerment, peace, pride and joy.
In closing, I would like to express my sincere gratitude for all of these relationships I have built with you fine folks, the support I have received, and the continue dialog that I still have with many of you. For those of you that I have lost touch with, let’s do something about that. You see, in the end it’s about the people you touch, and the experiences you have on this amazing journey of life. For me, it’s the detachment of the past, the ultimate focus on the present, and the excitement of what’s to come.
Peace and Love to ALL...Tony
Read on to get an inside view:
My dear fellow Citi Home Equity colleagues:
I am hopeful that this email finds you all well and enjoying your Holiday weekend. It’s been quite a while since I sent a note out to this group specifically, but I’m coming of the heels of watching the HBO movie Too Big to Fail. I’m not sure any of you have had the pleasure (or displeasure) of watching this movie, but I would highly recommend that you do. It’s an incredible movie that outlines the mortgage/economic meltdown in a very succinct and organized fashion. The acting is superb, and includes, Paul Giamatti (who looks exactly like Ben Bernake), William Hurt, Cynthia Nixon (from Sex in the City fame), Ed Asner (Mary Tyler Moore’s old boss), Evan Handler (one of my favs from Californication), Bill Pullman (who plays one of Melinda’s favorites, Jamie Dimon), and many others. I was captivated by the story line from the beginning, as they actually take you on a ride through the Treasury, the Federal Reserve, and the banking world as seen through the eyes of the participants. This is real behind the curtain stuff here folks, and the depiction of what happened unfolds exactly how I suspected all along. For us former CITI employees, watching Vikram Pandit (who was really only there at the tail end of our endeavor) participate in this charade is disturbing at best. As we now know, Citibank played several roles in this meltdown through their participation with mortgage backed securities, the relationship with AIG, as well as the actual lending piece of the equation. Citi sort of escapes playing a major villain in this movie, but for me, I could read between the lines of what actually went down. You see, the investment banks were making so much freaking money bundling loans into mortgage backed securities that they continued to put unrelenting pressure on the banks to constantly lower the criteria for lending. AIG was insuring these loans, and became sort of the fulcrum that almost collapsed the entire financial system. When the government peeled back the onion of what it would mean if AIG failed, they really had no choice but to put the TARP plan in place. It’s funny because the actual term TARP (troubled assent relief program) doesn’t really tell the story of what the government actually did. What it turned out to be was a capital infusion to the banks in order to stimulate lending again. If AIG went down, the entire credit system would have broken down and we would have seen a depression much larger than the one in the 30’s. In hindsight, the problem was entrusting that the banks would actually follow through and start lending again. Well, we all know how the rest of the story goes. Now, the banks are bigger, the executives are still getting paid, and we are all left holding the bag.
The wholesale portion of our Citibank Home Equity Division started right smack in the middle of this greed ridden time frame, and we really didn’t know what hit us. I remember the first time I looked at our Product Matrix. My eyes widened as I knew from past experience that the mortgage brokers would lick their chops at this product and that we could sell these junior liens like crazy. I also knew that I could recruit people rapidly and that I could help the bank grow this division. We expanded faster than any of us could have imagined, and we all enjoyed the ride. Even today, as I looked back at that 5 years time span, I am thankful to have participated. I have guilt over many things I have done in my life, but no guilt whatsoever playing my part in CHE’s rapid growth and success. Many people might look upon our platform as a failure, but I think we all know better. We were working hard, doing our jobs to the best of our abilities, building a business, and forging lasting relationships both internally and externally.
I had such a wide range of emotions as I watched this movie. Like many of you, I experienced a fairly large mid-life trauma as the result of CHE falling apart. I know that there are several of you that have read my book, My Back Nine, where I outline the journey through my career culminating with my CHE experience. Let me explain:
• I felt angry that my run of building great teams and making large sums of money in this business was over, and that Citibank is actually larger now than it was then. I felt more anger after realizing that the actual solution to the problem in late 2008 (the TARP program) DID NOT yield the results they were supposed to. Like mentioned above, the theory was that the banks were supposed to use their TARP money ($700BB) to actually start lending again and stimulate the economy. Well, as we all know that did not happen. What did happen is that the bonuses paid to Wall Street executives actually increased on 2008 and 2009, and most of the folks in the middle (or bottom) of that chain (yeah...you and I) lost their jobs and had life altering experiences as a result. The anger continued as I realize that I personally got caught up on both sides of the equation. I was also one of the homeowners caught up in owning more house than I could afford, just because the bank was willing to lend. I figured that they knew what they were doing. Funny...right? On the other hand, I lost my income and the ability to pay for that house due to the meltdown. Much of this anger was turned inward as I realized that I compounded my professional demise by making many poor personal decisions. A perfect storm.
• I felt empowered by the fact that I now feel a strong sense of detachment to the entire mortgage meltdown. I am no longer in the business, but feel somewhat educated on exactly what happened, and that knowledge helps me come to grips that it wasn’t my fault. I know that may not be the stance of those viewing my resume over the last several years, but I know and that’s most important.
• I felt peaceful that this detachment helps me look from the outside in and not inside out. My life is still very difficult as a result of how this affected me, but that is changing and improving each day. My peace comes from a place deep inside, a place where I know that I am a better person having gone through this turmoil. I was watching the movie, Eat, Pray, Love a few weeks ago, and there was one line in that movie that will stay with me forever. “Ruin is the road to transformation” - Nice…..right?
• I felt pride and joy for my participation in building Citi’s Home Equity Division. In my book I have an entire chapter dedicated to relationships. I feel thankful and humbled that many of my business relationships have become personal. ALL of you fine people fall into that category, and I wish I had more time to rekindle some of these great bonds. I do my best, and e-mails like this are part of that very important piece of my life. Towards the end of the chapter, I wrote about our demise and referenced an e-mail I sent out to our entire staff just before Citi ushered me out the door. The responses I received from that e-mail I still read to this day. Having made an impact of so many of you (and you on me) fills my heart with pride and joy. I know, a bit corny...but you get the picture.
• I felt closure that this all happened in the past and I only use it now as a frame of reference. The anger I mentioned above was short lived and what I mostly feel now are the other aforementioned emotions; empowerment, peace, pride and joy.
In closing, I would like to express my sincere gratitude for all of these relationships I have built with you fine folks, the support I have received, and the continue dialog that I still have with many of you. For those of you that I have lost touch with, let’s do something about that. You see, in the end it’s about the people you touch, and the experiences you have on this amazing journey of life. For me, it’s the detachment of the past, the ultimate focus on the present, and the excitement of what’s to come.
Peace and Love to ALL...Tony
Thank you Tony for saying everything I think we all feel. I think more than anything I miss working with the wonderful people and team that you, Mayank and Melinda helped build.
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