Wednesday, November 3, 1999

Passing Thoughts on Citigroup’s Coming to Town

Citigroup, the world’s biggest financial complex (3,400 branches in 100 countries and 165,000 employees) held a reception in Tel Aviv last week (Ha’aretz, November 1,1999) in order to announce their decision to open a branch in Tel Aviv. All the pillars of the local financial community, including Frenkel and the heads of the big local banks were out in full force to greet the newcomers.
Be Nice and Smile Even if it Hurts
Small fish do not usually welcome sharks into their small pond. However, there are many local financial wizards and business people who go by the theory that our local economy will somehow profit by the appearance of this giant Wall Street firm in the neighborhood. The hope is that if the big guys are interested in our turf, maybe there is more gold under it than we had assumed. Moreover, even if some of the local people were unhappy about the possibility that Citigroup will scoop up some of their clients, they were not going to show it or anger Citigroup by turning down the invitation to celebrate the occasion.
Citigroup’s New Boss
In an unrelated development, Citigroup made the international news last week announcing that it has a brand new boss, former U.S. Treasury Secretary, Robert Rubin, who was appointed on October 27, 1999 as a member of the firm’s three person directorate. The appointment followed Rubin’s decision a short while ago to leave Federal “service.” The U.S. economy did quite well under Rubin, so no one demanded a “cooling off” period. What could be more natural than the return of Rubin, former head of Goldman Sachs, to another central spot in the US financial oligarchy: From Wall Street to Washington D.C. and back to Wall Street. Our sense of logic and harmony are served by such smooth rotations.
Elegant Cattle Show
Just a small note on Rubin’s past activity will help to demonstrate how precisely the superb balance between money and politics is maintained. In February 1999, the International Herald Tribune ran a series analyzing the immediate background for the devastating crisis that ripped through Asia, Russia, Brazil and other countries from 1997 onwards. The crisis, which involved immense suffering for hundreds of millions of people, could not have happened were it not for ‘vulnerabilities’ fostered by Clinton-Rubin sponsored changes in the workings of international finance.
Our story returns to the beginning of the decade, when Bob and Bill first met.These were the circumstances.

“They were serious men, prosperous and pinstriped and they derided ‘he politics of class warfare’ as they conducted a job interview with a young governor from Arkansas. It was a steak dinner…in New York in June 1991 and the top Democratic executives on Wall Street were ….in one of a series of meetings with presidential aspirants in what an organizer called ‘an elegant cattle show.’”
“They were questioning a man with a meager salary but a silver tongue and this was another show in which Bill Clinton charmed his way forward to a blue ribbon……Aides describe that evening as an important step in the business education of Clinton, who came to repeat and amplify the themes, especially the need to move away from protectionism and push for more open markets in Asia and all over the world. It was the first time that Clinton met Rubin, from Goldman Sachs & Co. and the two men ..eventually forged a close partnership that has left an enormous imprint on the global economy. Clinton and Rubin took the American passion for free trade and carried it further to press for freer movement of capital…” (IHT, February 16, 1999)
Life has its ups and downs. Clinton will soon be out of a job. Bob Rubin is doing better. He has a new one. And his business will even have a branch in Tel Aviv.