Running a Tight Ship

Our new blank checks arrived over the weekend in a flat cellophane mailer, not in the convenient cardboard storage boxes that we had grown accustomed to. But my disappointment was only short-lived, as the flattened box was contained inside with helpful assembly instructions. Citibank is demonstrating shrewd acumen by saving on postage and packaging and offloading the labor cost of assembly onto its customers.

And in other news:

Merrill Lynch expects Citigroup Inc to write down about $6 billion in the third quarter and lowered its earnings estimate for the quarter to a loss….Merrill said Citigroup carries its net subprime related CDO super-senior positions at $18.1 billion, which was less than half of its September 2007 valuation of $43 billion.

$25 billion in writedowns with $6 billion to come. Citi may be having problems in structured finance, but the guy in charge of the mailroom is running a tight ship.

[Update 2 p.m.: The drip-drip-drip of bad news continued to leak out today about Citigroup and other players in the financial sector. Citi will pay beaucoup fines to Federal and State regulators and reimburse various investors for losses on esoteric securities. In Business 101 you learn to get all the bad news out at one time--the big bath approach--even writing off more than you probably should, in order to persuade the market that you have put your troubles behind you. The fact that Citi, AIG, and others have been unable to take care of these problems once and for all is a worrisome sign that financial companies are too big and complicated for even very smart people to get their arms around.]