Robert Rubin

This was something I wrote quite some time back.
Somehow, I got lost in the document under piles of paragraphs
of random daily stuff.

Here it is now :

The Rubin Puzzle
My first impression of Robert Rubin was a very negative one.
He had been characterized by MarketWatch as one of the
"10 most unethical people in business". There were also news reports
of him being the chief architect of excessive risk-taking at Citigroup,
which resulted in the need for a government bailout in 2008.
In all, these caricatures made him seem little more than a gambler
or a thief.

Fortunately for him, there were people willing to vouch for his
character. First, there were his Goldman partners,
whom all spoke highly of him and his abilities. Second, there
was Warren Buffett who went no less
than to recommend Rubin's autobiog as book worth reading in his 2003
annual letter. Intrigued, I decided to plow into it.

I cld not have been more surprised. Through reading his book,
I was deeply impressed by Rubin's sensitivities and intelligent reasoning.
He did not seem to me at all like anybody who'd make reckless choices
to imperil the financial health of his company.
In all, I had developed a respect for him and the way he conducted
his affairs both in Goldman and in Washington. (Note tt e vast diff
between this and my opinion of Alan Greenspan - who still fails to inspire
any trust in me - but I guess Im biased)
In this light, I was able to relook at those shrill accusations hurled upon
him and uncover the layers of mis-characterization.

What follows is a conjecture on my part wrt to his role at Citigroup.

N.B. This is just conjecture on my part.
Im fully prepared to discard this theory in the face of
any conflicting facts.

1999 - Citi wants to higher a new advisor.
Rubin is smart, has the political connections, and brings
prestige. Why not him?
Much like having George W. Bush - they cld prove to be useful.

Rubin for his part, is thinking of life aft Washington.
Sees Citi as a new challenge? Most likely they invited him.
He's flattered and accepts. At first he's not paid much,
but as the years go and his contributions pile, he manages to
rack up a a hefty bonus in the go-go years of 2005 to 2007.

As an advisor, he doesn't expect to be running the show.
Or for his words to dictate policy.
But in comes Chuck Prince - he's a lawyer, and can't tell
financial instruments apart. He needs advice and Rubin seems to
be the perfect person to lean on.

Rubin tells him one way cld be for Citi to go the way of Goldman.
Put more capital at risk, take the position of a market maker,
do proprietary trading. But o cos, he cautions, risk controls needs to
be stepped up.

Prince finds this sensible and orders his guys to get going.
Unfortunately, the ppl they have in risk-mgt ain't as adept
as Rubin himself. Plus he only has a general idea, and not clear
knowledge of the details. While everything seems to be going well,
people give him credit and pile perks on him.
He accepts.

END.

Even today as I read it I still stand by my conjecture.
A couple of minor changes tho. Turns out Rubin wanted to be
well-compensated after all. His starting at Citi was already pretty
lavish and I got this quote of his whr he says :
"I bet there's not a single year where I couldn't have gone somewhere
else and made more."

So I under-estimated the businessman profit motive in him.
Well, he was once boss of Goldman Sachs, so yeah, he's gotta be a
very profit oriented guy.