Former Citigroup CEO: Unemployment Will Hit 9 Percent

Former Citigroup CEO: Unemployment Will Hit 9 Percent

By Paul Detrick (Bio | Archive)
October 28, 2008 - 12:54 ET

Sometimes former CEOs have a reason to be downbeat when they make predictions.

Former Chairman and CEO of Citigroup Sanford Weill told CBS's "The Early Show" Oct. 28 that unemployment would hit 9 percent and that Wall Street CEOs "didn't deserve bonuses this year." It went something like this:

Well, I think we've set in motion a whole series of events that is going to make the economy really, really bad over the short term. I think we are going to see the biggest drop that we've seen in GDP. I think we are going to see unemployment go up to about 9 percent.

Weill said that a year from now things would be a lot better, but still was critical of the Federal Reserve for not acting sooner:

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I think we got there late, but I don't think -- by the time we did get to do it we didn't have much time ... I think we had to act fast. I think by injecting money into the banking system, those banks can leverage that 10 times, that money, so that the government can get a lot more bang for the buck. I think that they're going to get their money back. I think the taxpayers are going to be fine.

Smith pushed Weill on CEO bonuses asking, "This whole bailout has made a lot of people crazy, not the least of which is they are reading now, some of these folks on Wall Street are still going to collect their half billion or three quarters, a million or million dollar bonuses."

"I don't think very many," Weill interrupted. "I think the leadership of the banks and the Wall Street firms should really, they don't deserve bonuses this year. This was not a good year for shareholders. They believe in pay for performance and performance wasn't there."

There may be a reason Weill is downbeat with his predictions though.

The Wall Street Journal reported Oct. 23 that Weill was in talks to launch a "private-equity fund that would invest in beaten-down financial companies and assets."

—Paul Detrick is a research analyst at the Business & Media Institute.

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He's right.

October 28, 2008 - 13:24 ET by wizardjr

When Barry takes the Whitehouse he'll generate a full blown recession. Nine percent unemployment is generally right for a full recession. It could go higher.

No problem though, we'll just tax the rich for Euroweenie benefits like 18 month unemployment compensation at two-thirds of your regular pay. Piece O' cake.

with all do respect,sandy

October 28, 2008 - 14:35 ET by patmac49

with all do respect,sandy weil has been a mover and shaker in this business since i have been in it and he is a master of the game..and ,from where i sit ,which might be a bit different than you,even if mccain is elected ,we are in for some even more frightening indexes..

I agree in priciple

October 28, 2008 - 16:33 ET by wizardjr

I just argue that The One will double the damage.

Obama = Carter = Double Digit Inflation and Unemployment

October 28, 2008 - 13:41 ET by Rpeggio

I hope I'm wrong, but Carter also had that trickle-up ideology and was anti-trade and raised taxes (cap gains etc.) and he was also dealing with oil crisis etc. I don't see why Obama pulling the same mis-guided, ideologically blinded tax & spend policies would bring us anything but a deeper recession, inflation, and higher unemployment.

And the Obama/Pelosi/Reid trio, in the pocket of Unions, will do away with the private union ballot, resulting in more union votes, intimidation, and a deadly increase in unionized companies....which will result in inflation/price increases, closing of businesses in the US and more offshore outsourcing, and higher unemployment. Just dumb. The media will try to continue to blame Bush for a year or two, but eventually some in the MSM will turn on Obama when they realize how far left he truly is, and this country will become more divided racially than it has been in decades.

I hope I'm wrong, but I see the Dem majority and Obama going hog-wild spending and legislating this country's economy and business into the ground. They just don't get capitalism and free market trade. Business and innovation isn't the boogie man, it's the lifeblood of our economy and power as a nation.

but then France will like us...

October 28, 2008 - 16:38 ET by wizardjr

As soon as we become a half-vast Peoples Republic with all the various albatrosses hung around the country's neck the Euroweenies will finally like us, right?

That's the part that's going to shock the crud out of these socialism pimps if Barry takes the Whitehouse. The Europeans will just laugh at us and kick America to the curb. They have been green-eyed jealous of us for decades. We out invent, out produce, out military, and just about anything else positive in the world. American English is the common tongue around the world. The almighty dollar is once again climbing against all currencies. They hate us now. They'll hate us then.