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January 16, 2008
Citigroup needs a trim
New Citigroup CEO Vikram Pandit should consider whether his “oft-troubled bank has become too big to succeed,” says The Wall Street Journal in an editorial. Citigroup “has shown a knack for finding the middle of whatever financial mess is in the news,” and its massive size “has not so much provided stability as a place for problems to hide.” Still, despite its $10 billion “black eye” yesterday, the bank has many “great businesses” in its fold that could be sold off to raise capital and stave off a “taxpayer rescue.” Pandit presumably wants to “run Citi, not dismantle it.” But “if it has become too big to fail but too large to succeed, a breakup might be better for all concerned.”
Apple’s delayed bite
Wall Street showed “little loving for Apple” after CEO Steve Jobs’ big Macworld keynote, says Peter Burrows in BusinessWeek.com, but “the disappointment won’t last.” Apple’s new products—a super slim laptop, an updated Apple TV, and video rentals—weren’t as “unexpected or as dramatic” as last year’s iPhone, but they will let Apple build on the demand it has created. The video rentals, especially, will help Apple make a play for the TV set, “by far the most-used screen in most homes for entertainment.” So while Apple shares fell 5.5 percent yesterday, Blockbuster’s “plunged 17 percent amid concern Apple will eat into its film-rental business.”
of The Week magazine.