During the past four months, as we have all read the startling headlines of the financial meltdown, many are seeking to place the blame. One of my client’s has prominently displayed throughout their offices their mission statement… “Do The Right Thing”.
The Citigroup story provides
detail as to how the best paid bankers and other assorted “best and brightest”
had no idea what they were selling and creating. The government regulators,
rating services, mortgage brokers, and yes the people who took these crazy
mortgages all share responsibility for their actions. As the Citigroup story
unfolds, it is clear that Citigroup made money from almost every link in the
chain of this bubble. Risk takers and risk managers all made money, and had no
interest in stopping the freight train.
Check out Michael Lewis’s
essay, “The End of Wall Street’s Boom,” on Portfolio.com. Lewis, who first
chronicled Wall Street’s excesses in “Liar’s Poker,” a great book, talks about
people who stepped up and did “the right thing,” by exposing the credit binge,
and declared that Citigroup was headed for trouble.
Lewis wrote, “Long Beach
Financial was moving money out the door as fast as it could, few questions
asked, in loans built to self-destruct. It specialized in asking homeowners
with bad credit and no proof on income to put no money down and defer interest
payments for as long as possible. In Bakersfield, Calif., a Mexican strawberry
picker with an income of $14,000 and no English was lent every penny he needed
to buy a house for $720,000.”
This is not just bad business
judgment but to create an environment where you know it will eventually
collapse is just looking the other way. When I work with my “Do the Right
Thing”, client I often ask his employees, “What does this mean to you?” They
are able to explain it in very simple terms and they each can relate to it on a
personal day to day application. I have four sons, who I often pose the same
situation, “when in doubt, do the right thing” and they know what that is and
have since they were five years old.
What has happened is a total
breakdown of responsibility at every link in our financial chain and now it will
take a long time to build that confidence back in the system. This is
everyone’s problem and we will be working harder for less money for years to
come. The only way out is “Do The Right Thing.”
Paul Anovick
AnovickAssociates.com
Developing Potential, Producing Results
