Buiter Comments

I am pleased, proud and honoured that Willem Buiter has chosen the comments section of my blog to make what is as far as I know his first public statement since being appointed Citigroup’s (C) chief economist:

I joined Citi for two reasons. First, because Citi is the one truly global bank. Second, because Citi is an institution that, following its challenges during the global financial upheaval of late 2008 - early 2009, changed course resolutely and radically to return to its core strengths: global commercial banking, financial infrastructure services and investment banking.

The global scope of Citi’s activities and its presence in every systematically important asset market mesh very well with my long-standing interest in open economy macroeconomics and in the joint determination of economic activity, inflation and asset prices and rates of return.

I am pleased, proud and honoured that this Citigroup has appointed me its Chief Economist.

It is a little bit odd that Buiter gave no indication on his blog that he ever saw Citigroup in such a fine light — but I’m encouraged by his popping up in the blogosphere like this, and hold out a tiny bit of hope that his trademark very long blog entries might yet continue largely unabated.

On the other hand, I’m not holding out that much hope. This statement doesn’t sound particularly candid, and Citi doesn’t like any of its employees going too far off the reservation. My guess is that Buiter’s writing is going to be mostly confined to Citi research papers from now on.

Comments

[a fat panda]

I worked in a variety of Citi's groups as a consultant, and saw a very perverse system of rewards. What I saw was projected costs and projected benefits were rewarded more than actual results. And I sense that is going to get worse with free capital.

Companies, not just Citi, promote and reward success. The promotion cycle in this company will reward those people who treat capital as though it was free. Anyone who treats capital as a cost, will under perform. This means that managerial Darwinism will select managers for the inability to price capital. This will create a serious problem once capital is not free.

2009 Dec 01 01:26 AM

[Nettligent]

2 billion of exposure to Dubai leaves the thorny question of where else Citi kept dancing after the music had stopped.

2009 Dec 01 01:31 AM

[Ferdinand E. Banks]

I'm also pleased that Citigroup gave Buiter a swinging job, because he is the last person in the world that I would like to see drinking coffee and stinking up chairs in the White House.

2009 Dec 01 09:09 AM