Is Citigroup A Tommy? Big Business and the Martin Lawrence Connection

Watching Citigroup (Ticker: C) unwind reminds me of a familiar Wall Street story line and a character from a hilarious TV show.

Bank behaves badly while maintaining the “we’re fine” facade, stockholders get scared, bank tries to raise cash, stockholders become more fearful, bank tries to sell assets, stockholders don’t buy it, bank blames small part of senior management, stock goes down the tubes, etc., etc. 

Then the news hits Main Street and we all wonder: What did they do and what were they supposed to be doing instead?

This is difficult to answer since so many companies (AIG, Citi) became too huge for management to effectively control, too complex for government watchdogs to effectively regulate and too big to fail.

Citigroup recently sold a huge stake of its brokerage arm, Smith Barney, to Morgan Stanley. More asset sales will certainly follow. How does management decide what to sell and what to keep? How can management make good, thoroughly contemplated decisions in such a short time-frame?

That brings me back to my original questions: What does Citigroup do and what are they supposed to be doing?

I had the same feeling about Enron when I was in college. People talked about how great it was, how diversified it was and how profitable it was, but no one could tell me what Enron did. That set off a red flag in my mind and I am glad I never invested in it.

Enron and Citigroup make me think about a character named Tommy from Martin Lawrence’s self-titled TV show. On Martin, Tommy looked good on paper. He was a well-mannered, well-dressed man of seemingly decent intelligence, but nobody knew what he did for a living. He frequently spoke about work, but his references to work were vague. Nobody knew where he worked or what he did. Take a look:

The word “tommy” has actually become a slang term for someone who wants to appear as if they are employed, but no one can verify where they work or what they do.

So, is Citigroup a tommy? Not exactly. But there are some similarities!

(Video from youtube:  http://www.youtube.com/watch?v=IObJQKWVL5o)