With the CEOs of two financial giants making their exits within a week of each other, the Financial Times looks at the similarities in the undoing of Citigroup's Chuck Prince and Merrill Lynch's Stan O'Neal. Both struggled unsuccessfully to change corporate cultures, making enemies along the way, and both invested heavily in mortgage-related securities. Their key mistake, adds the the New York Times, was siting on them even as they tanked.
In the first half of the year, Citigroup and Merrill were the biggest issuers of collateralized debt obligations—bonds often invested in subprime home loans—to the combined tune of $61 billion, the Times notes. The bonds have been falling in value for months as default rates rise, but the two banks, unlike many others, seemed oddly confident that their CDOs would weather the storm.