Withdrawal symptoms
Citi's extreme bank makeover
Good morning, expert underwriters. This is your Stock Market Rundown for September 21st, 2023. Thanks for tuning in for more tomfoolery. Let’s proceed:
TODAY’S TOP STORY: CITI GIRL 💵
More and more women on Wall Street are ascending to the C-suite. But sometimes right after smashing through that glass ceiling, they fall victim to another sexist phenomenon: “the glass cliff”. I know: it sounds like something Wile E. Coyote might run off.
Actually, the phrase refers to the phenomenon whereby women are more likely to be put into leadership roles during times of crisis or duress—when there’s a bigger risk of blowing it. Basically, if you get the top seat just as the shit is hitting the fan, you better be twice as competent.
Jane Fraser isn’t a household name. But she is Wall Street’s most powerful woman. As the CEO of Citigroup, she’s the first female to ever run a major American bank. And Fraser’s appointment was definitely your classic glass cliff situation.
When she arrived, Citi was in third place among the big-four US banks, and regulators had meted out many a slap on the wrist to the bank for risk management flubs.
Now, Fraser has masterminded a sweeping scheme to turn around Citi’s bad rep with regulators—and its flaccid stock price. The plan starts with layoffs. Years of acquisitions have made middle management as bloated as Uncle Eugene after Thanksgiving dinner, and it’s time for an enema.
Fraser is also yanking the reins on the executive team. A major reorg will have the folks in charge of the company’s five main business lines reporting directly to her. Get your PowerPoints ready, gentlemen.
As CEO, Fraser knows darn well the cuts will piss some people off. Speaking at a recent investor conference, she said: “It’s going to make some of our people very uncomfortable. I am absolutely fine with that.” You need brass balls to lead a big bank… or in this case, brass ovaries.
SO WHAT ELSE IS GOING ON?
Google is being sued for negligence after a guy following Google Maps directions drove off a bridge that collapsed nine years prior. Folks, I know the computer-voice sounds like a nice lady, but she is not to be fully trusted. Try looking out the windshield.
Another buzzy tech IPO hit the markets as Klayvio went public. They do “ecommerce marketing automation”, which means they help Shopify stores spam you with emails reminding you that you left a Swarovski-crystal-encrusted dog leash in your cart.
A top bond rating agency says many US colleges and universities will be forced to shut down or merge due to declining enrollment and shrinking funding. Alas, you do still have to pay off your student loan even if Poughkeepsie Veterinary College goes tits-up.
Oil prices have surged to a 10-month high, which is worrying, because oil price shocks can spur a recession. But they might also spur my neighbor Gary to trade in his 22-horsepower Cub Cadet riding lawnmower, for an old-timey push mower. So, at least I’ll have a peaceful Saturday morning.
That’s it for today, my friends; see you bright and early tomorrow. Yours in capitalism, The Axe