The sudden resignation of Citigroup CEO Vikram Pandit has caught Wall Street by surprise. Michael Corbat, the CEO for Europe, Middle East, and Africa, is replacing Vikram. Chief Operating Officer John Havens has also resigned.
My take? The board of directors must have met after, not before, the earnings call. Two people at the top, leaving abruptly, is odd. The most obvious way to account for the facts is that there has been a power struggle between Mr. Vikram and the board. Mr. Vikram lost.
It is just unlikely that someone would walk away from a high-paying, high-profile job, in the middle of October. Is he getting a bonus for leaving? The Compensation Committee typically does not meet until November for these companies. I doubt it.
Another question: Isn't this a "material event, " which should be reported as an 8-K? Of course, and that needs to be filed within four business days, so this decision must have been taken very recently. More importantly, shouldn't this have been put in the 10-Q?
The stock is only down 2.1 percent and is acting surprised, but not like there is anything egregious going on.
One financial analyst told me the board has teeth. "They didn't think Pandit was the guy to take the company to the next level, " this person said.
Bank of America/Merrill Lynch on Citi: "We do not believe the CEO change is likely to be related to any 'smoking gun' issue and would therefore regard any near-term share price weakness as a good buying opportunity."Elsewhere:
1) Financial earnings holding up: first JPMorgan Chase, Citigroup, and now Goldman Sachs and PNC Financial Services beat estimates. All reporting decent numbers. (See CNBC's complete earnings season coverage. )
2) Thanks Mr. Dudley ... now can I get my 2 percent mortgage ?
On Friday, I went on a mild tirade, demanding that I get a lower mortgage than the 3.5 percent I had just obtained. The reason: Banks are selling mortgage-backed securities for big profits and can afford to lower rates even more.
Today, Bill Dudley of the Federal Reserve Bank of New York said that "concentration of mortgage origination volumes at a few key financial institutions" was a factor in banks not passing on even lower rates to consumers.
Thank you, Mr. Dudley. What are you going to do about it? He talked vaguely about how to "foster competition."
Oh, he also blamed the problem on warranties required by Fannie Mae and Freddie Mac that force banks to buy back bad loans, as well as higher fees by Fannie and Freddie.
Here's the problem: The Fed is buying these mortgages hand over fist, that's why prices are up. If banks lowered the mortgage rates, they'd have to sell them for less.
Me? I'm holding out for 2.9 percent. Then I'll refinance again. It would be the third time in a little over two years. At this rate, I'm practically dating my mortgage broker.
—By CNBC's Bob Pisani; Follow Him on Twitter @BobPisani
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