Obamas OMB Pick Oversaw Citibank Unit That Shorted the Housing Mkt.

Source: Huffington Post

President Barack Obama's choice to lead the White House budget office oversaw a Citigroup unit that profited off the housing collapse and financial crisis by investing in a hedge fund king who correctly predicted the eventual subprime meltdown and now finds himself involved in the center of the U.S. government's fraud case against Goldman Sachs.

Jacob Lew, named Tuesday as Obama's nominee to lead the Office of Management and Budget to replace departing OMB chief Peter Orszag, served as chief operating officer of Citigroup Alternative Investments in 2008. He has served as a top aide to Secretary of State Hillary Clinton since the administration came into office.

Though Lew is a longtime public servant who's spent nearly 30 years in various positions throughout government, it is his few years at Citi -- in particular the one year he spent at its then-$54 billion proprietary trading, hedge fund and private equity unit -- that's likely to raise the most eyebrows in the coming weeks as Lew faces a Senate confirmation hearing.

Especially his unit's investments in a hedge fund that bet on the housing market to collapse -- a reality suffered by millions of American homeowners.

At the time, Citi's Alternative Investments unit was a $54.3 billion behemoth that participated in the kinds of activities that would be largely limited under the coming financial reform bill. The bill, which is expected to pass the Senate as soon as this week, contains the "Volcker Rules," named after their champion, former Federal Reserve Chairman Paul Volcker, which limits the amount of money banks can invest in hedge funds, private equity funds, and use to either invest or speculate in the financial markets. About 20 percent of the unit's available funds, or $11 billion, came from Citi itself (rather than clients), according to the bank's April 18, 2008, presentation to investors.



Read more: http://www.huffingtonpost.com/2010/07/14/jack-lew-obamas-omb-pick_n_645093.html

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This does not bode well, I would say, what say ye?

Shit like that simply does not matter any more. He won't receive so much as a single query regarding it- from the Rethugs OR the Dems.

:hi:

come out full bore:

% the Health Insurer Protection Act is decried by the GOP and attacked by racist crackheads; it becomes a "liberal victory" saving millions of lives

% because the GOP vituperatively opposes her, a Kagan victory is a "Dem victory," and her reactionary and authoritarian positions are forgotten

% the WH plays Boss Tweed in PA, AR, and CO; only Republicans demand investigation; investigation quashed; online community crows that "Pubs LOSE again!"

it's a very neat little hat trick

More change we can believe in.

When it's overrun already?

:shrug:

:applause:

i hope.

he wasn't blinded by the bubble.

wasn't caught up in the "hype" of the housing bubble.

We're getting past the point of Obvious.

someone who packaged up and sold and resold and resold and resold the debt to begin with.

Shorting was certainly the clear-eyed thing to do. Clear-eyed at OMB wouldn't be bad.