"This was a very positive move," she said in an interview with Tom Keene and Ken Prewitt on Bloomberg Radio.

You can read her comments on Mr. Pandit from her book below.“Pandit was the CEO of Citigroup, which had earlier bollixed its own attempt to buy Wachovia,” “there was bitterness in his eyes,” “Pandit looked nervous, and no wonder,”  “I thought Pandit had been a poor choice,” “he was a hedge fund manager by occupation and one with a mixed record,” “he had no experience as a commercial banker,” “no private investor was likely to invest in Pandit’s bank,” “wouldn’t have known how to underwrite a loan if his life depended on it,” “I was particularly concerned about Citi’s CEO, Vikram Pandit,” “Citi’s management performance during the crisis had not been impressive,” “they had a difficult time making decisions and then executing once the decisions were made,” “couldn’t we at least bring in an experienced commercial banker to run the place?” “I doubted that many senior commercial bankers would be willing to work for Vikram, given his weak reputation,” “he was also boasting that at some point it would start paying dividends again. We had laughed those stories off as delusional.”

In 1963, a 19-year-old college student put a cardboard cut-out of a dime in a laundry machine, was spotted by a local sheriff, convicted on fraud charges, sentenced to 15 days in jail. Nearly 50 years later, the ex-con, now a low-level bank employee, gets flagged by a background check mandated by a new federal regulations, loses his job.Except you wouldn't have to make it up. An Iowa man named Richard Eggers had been working in a Wells Fargo mortgage call center for seven years when an Federal Deposit Insurance Corp. a federally-mandated backgrounder turned up his half-century old cardboard-dime conviction. Mr. Eggers may have the most sympathetic case, but he's hardly the only small fry bank employee to be laid off for an old conviction.

According to the Des Moines Register, banks have been firing low-level employees such as Mr. Eggers since federal bank-employment guidelines went into effect in May 2011, with an uptick when mortgage-employment rules took effect in February:

The tougher standards are meant to weed out executives and mid-level bank employees guilty of transactional crimes, like identity fraud or mortgage fraud, but they are being applied across-the-board thanks to $1-million-a day fines for noncompliance.

The bank fired Mr. Eggers, Mr. Eggers got a lawyer, and now, according to The Register, he's filed state and federal civil rights complaints against Wells, the company that conducted the background check and the FDIC—clearing the way for a class action lawsuit.

Update: Andrew Gray , deputy to the chairman of the FDIC, emailed The Observer to point us to a letter he wrote The Register clarifying the federal law that led to Mr. Eggers dismissal. An excerpt:

There is a combination of other factors that have had the effect of subjecting more individuals to the requirements of Section 19, resulting in a temporary increase in waiver applications to the FDIC. These include the increasing number of mergers between banks and non-banks, such as mortgage companies or securities firms, which subjects more individuals to Section 19 coverage, and the passage of the U.S. Secure and Fair Enforcement for Mortgage Licensing Act of 2008, commonly known as the SAFE Act.

This law requires all residential mortgage loan originators to register with the Nationwide Mortgage Licensing System and Registry. As part of the registration, mortgage originators are required to submit to the FBI fingerprints on their employees. In some cases, these fingerprint examinations have uncovered old criminal offenses covered by Section 19, necessitating after-the-fact applications to the FDIC.

The entire letter.

Alexis Tsipras, leader of Greece's Syriza coalition

Europe reckoned with Greek elections and the Spanish government took a controlling stake in the country's third-largest lender. Phil Falcone kept cool at a hedge fund conference, despite turmoil facing LightSquared. Green Mountain founder Robert Stiller talked about the sale of company stock that led to his ouster as chairman. That and more, in this morning's Wall Street roundup.

Europe simmers: European governments held back a part of rescue funds promised to Greece after weekend elections raised the specter that the country's new governing coalition might shred an existing bailout agreement. As in, literally. With the Greek government unformed, and leftist Syriza coalition talking tough, the Journal reports that German and Finnish made a stink before agreeing to release $5.5 billion in bailout funds.

Spain said it would take over Bankia SA yesterday, converting $5.8 billion in preferred equity into voting shares, good enough to control a 45 percent stake in the nation's third-largest lender. The country's banking system is looking more and more like an Ireland-sized catastrophe, according to Bloomberg: While the government has ordered banks to post additional capital to cover losses on construction and property loans, the prescribed collateral-raise would leave nothing in the tank for trillions more in home loans and corporate debt.

Calm before: Storm clouds may gather over Phil Falcone, but when Dealbook went to see the Harbinger Capital founder speak at the SALT conference in Vegas, the hedge fund manager was the epitome of calm, or at least, he spoke thoughtfully and in mellifluous tones. On the other hand, no one asked about LightSquared.

Bad documents: The Florida Supreme Court will hear arguments today in a case that could undo hundreds of thousands of foreclosures, as the court decides whether banks that used fraudulent paperwork to file foreclosures can dismiss the suits and refile with new documents. Reuters has the story of how a 35-year-old drywall hanger initiated the case, and potential implications in Florida and across the country.

Stiller spills: Robert Stiller told his side of the story to the Wall Street Journal. The Green Mountain founder was stripped of his role as company chairman after selling $123 million in stock last week in a margin call as Green Mountain's share price plummeted following the release of second-quarter results. Stiller, often described as the richest man in Vermont, wore sweaters to work, practiced yoga...and took out hundreds of millions of dollars in loans for charitable donations and real estate transactions, including a $17.5 million Time Warner Center apartment previously owned by Tom Brady. "Lavish is relative," Stiller told the Journal.

When, not if: The FDIC will announce its M.O. for the next crisis that brings a financial institution to its knees: Regulators will seize the parent company and allow units to operate; Shareholders will be wiped out and bond owners would likely suffer losses as their holdings are swapped for equity in a new entity.

Expense account: Wendy's offered the president of its international division a lump sum payment of $850,000 if he moves to the company's new headquarters in Dublin, Ohio, and stays for at least two yeas, Footnoted reports. Word of that payment, buried in the supporting exhibits of the company's quarterly report, comes after Wendy's paid millions of dollars in severance costs when its CEO opted to resign over moving from Atlanta to Dublin last year.

Kryptonite: Facebook updated its S-1 to explain that growth in active users is outpacing the number of ad delivered, and it's all about mobile.

[Louisa Gouliamaki/AFP]

mtaylor@observer.com

Twitter: @mbrookstaylor

The crowd—business people, media people and NYU students, faculty and alumni—laughed. As camera shutters clicked, Mr. Geithner stood on stage and delivered a cautiously optimistic speech about the recent financial reforms, which the president signed into law last month. "America," he said, "is coming back."

To justify his optimism, Mr. Geithner gave a brief history lesson: He described the Great Depression and the creation of the Federal Deposit Insurance Corporation, quoting a 1933 Time article that described bankers' fears of the government regulation. "Through the great banking houses of Manhattan last week ran wild-eyed alarm. Big bankers stared at one another in anger and astonishment," he read. "This is a vivid quote," he said, departing from his script. The crowd chuckled.

But the vintage journalism reference was not original. President Obama got to the Time article first, back in April during his Cooper Union speech about Wall Street reform. In truth, the Treasury Secretary did not handle it as well as his boss, who read the quotation before telling his audience that it was eight decades old. According to an official White House transcript, there was laughter and applause.

For Mr. Geithner, the moral of the story was that the reforms of the 1930s "laid the foundation for decades of prosperity." He expects a similar period of prosperity. "The economy is healing. And we are taking the hard steps now, by implementing reforms that will be essential to our capacity to grow and prosper in the future."

He seemed relaxed throughout the speech, and sat in a chair on stage to take questions after it was over. "I'm very much looking forward to sharing those views," he said when asked about reforming the housing giants Fannie Mae and Freddie Mac, "but now's not quite the moment."

And did Mr. Geithner think the U.S. would follow in Japan's deflationary footsteps? "I do not," the Treasury Secretary said. "Was that clear enough?" He said the U.S. has learned from other countries' mistakes. "Job creation in the private sector is much slower than we'd like, but it came sooner than in previous recoveries," he said. Former Fed chairman Alan Greenspan might disagree.

The ancient admonition seems the only way to hedge the reflection that as bad as Citi’s problems are, how much worse might they have been had Walter Wriston still been running the bank. It was the late Citibank CEO who, when he took over from George Moore in 1967, contrived to implant the go-go gene in the venerable institution’s DNA. Of course, it could have been worse. Wriston liked to boast that two presidents had offered him the Treasury secretaryship. Just imagine …

It was Walter (“Countries don’t go broke”) Wriston who pushed ahead in petrodollar lending, which effectively minted/printed billions of offshore dollars without the by-your-leave of the Fed. These dollars eventually found their way home (it is a tenet of faith with me that currencies are like Atlantic salmon; they always make their way back to the tributary in which they were spawned) and hello, Paul Volcker! In 1986, I even wrote a thriller, The Ropespinner Conspiracy (available online for $0.01 plus postage) that posited a Soviet “economic mole” introduced into the U.S. financial system to destroy it by doing exactly what Wriston and Citi were up to.

Now Citi is playing out the inescapable endgame of the Wriston-Weill (an amateur Wriston) legacy. It’s like a rigged baccarat game with the taxpayer holding the bank. How it will play out, knows God. One thing I am convinced of. Having watched Vikram Pandit on Charlie Rose (and you can, too, either on Charlie’s Web site or on YouTube), I have no doubt he’s unequal to the task—to put it about as kindly as I can.

And now BofA has done a degree-of-difficulty 9.8 full gainer into the soup, which had to be inevitable in a multibillion dollar deal (acquisition of Merrill Lynch) cobbled over a weekend under the gun. While it’s kind of fun to watch the Blowhard of Charlotte (I am no fan of Ken Lewis) squirm, this hits all of us so, schadenfreude will just have to wait its turn.

What to do, what to do, what to do?

One thing that strikes me about the way the present mess/crisis is being dealt with is how little imagination has been deployed. I never expected much from Henry Paulson, who comes across in Charlie Ellis’ extensive history of Goldman Sachs as mainly a smile-and-a-handshake guy and a ruthless office politician.

Now it’s reported that Mr. Paulson and F.D.I.C. suprema Sheila Bair are looking into some kind of “aggregator bank” to buy toxic assets off bank balance sheets. I have a kind of wild idea that might make this notion interesting.

One of the problems with the “global” crisis is that it isn’t being addressed globally. Washington, London, Brussels, Moscow, Tokyo, Riyadh, Beijing, Canberra: Each is doing its own thing. Nothing’s in sync. I think it would do wonders if some semblance of unity and cooperation could be implemented.

So, start with a few realistic givens: China has upward of a trillion dollars of U.S. Treasuries. In today’s markets, a holding on this scale could not be liquidated to any significant degree without horrific losses or a U.S. default—which would be the end of the world.

Yields on treasuries have drastically shrunk. Returns are virtually negligible.

The best thing that could happen to China’s domestic economy would be the recovery of the U.S. economy. By now, the latter has been so “consumerized” that only by restoring the confidence and creditworthiness of the consumer, and all who sail in him/her—mainly lenders—can a recovery be accomplished.

So here’s my idea:

Beijing and Washington would organize a joint U.S.-China “covered” fund that would start life underpinned by a trust fund into which China would put, say, $500 billion of its U.S. Treasuries in return for an equal face amount of trust certificates carrying a better interest rate than the underlying treasuries.

This fund would make/purchase loans in the U.S. by exchanging its own debt securities (backed by the treasuries contributed by Beijing) with holders of toxic CDOs, etc., on some rational value basis. Bang for the buck would be doubled: The money-good trust certificates exchanged for “toxic” assets would count as balance-sheet capital, while doubtful assets would be removed from balance sheets. Pricing would, of course, be crucial—but then it always has been, right from the outset of the present crisis. As a way of making sure that this new capital goes where it belongs—to the retail level of credit—participating institutions would agree to increase their loan books by, say, 10 percent per annum.

Profits would be split 60-40 between the U.S. taxpayer and China, which would also receive interest. If necessary, an equity feature might be incorporated. And, incidentally, the way to deal with the question of “bank nationalization” is for Uncle Sam to agree that, when and if the time comes, equity stakes received in consequence of bailouts will be offered via rights to the then-stockholders of the affected institutions and their successors. 

Most important, the recovery effort would be globalized, what with Beijing and Washington each putting a shoulder to the wheel. This, more than anything, is what the world needs to see.

Here’s how. As The Observer reported last month, the F.D.I.C.’s October agreement with JPMorgan Chase and Washington Mutual allows Chase to pick and choose which of the city’s 148 Washington Mutual branches it will keep. Chase will then turn over the rejects to the F.D.I.C. But here’s the kicker: According to sources, the F.D.I.C. can then simply terminate the leases of those rejected branches, all contractual obligations void. Though, Andrew Gray, an F.D.I.C. spokesman, indicated that landlords should not entirely give up hope on some form of compensation.

“The landlord could file a claim against the general receivership and would then become part of the general creditor class,” he said, referring to the legal entity made up of WaMu liabilities not acquired by JPMorgan Chase. “There is some money in the WaMu receivership. … I’m not going to speculate on the size of payments. We’ll see once those contracts are worked through.”

That’s not how these things normally work, according to Jonathan Mechanic, chairman of Fried Frank’s real estate department.

“If a tenant files for bankruptcy, then the landlord has a cap on his damages equal to the greater of one year’s rent or 15 percent of the rent of the remaining lease term not to exceed three years,” Mr. Mechanic said. Precisely put.

Needless to say, WaMu’s bankruptcy, coupled with the F.D.I.C.’s lack of rent obligations, have left city landlords, many of whom invested hundreds of thousands of dollars in luring WaMu into retail spaces, feeling screwed. What better Christmas present than an empty retail space in the middle of a recession!

Francis Greenburger, chairman and CEO of Time Equities Inc. and owner of 2554 Broadway, will not be sending the F.D.I.C. a thank-you note. About five years ago, Mr. Greenburger’s firm spent more than half a million dollars wooing WaMu, which ultimately took more than 3,000 square feet at his building’s 96th Street corner. The branch has about five years left on its 10-year lease.

“We’re anticipating that Chase gives [our WaMu branch] back to the F.D.I.C., and then the F.D.I.C. gives it back to us,” Mr. Greenburger said. “Chase has a branch directly across the street.

“We’re in the middle of a recession, the worst recession since the Great Depression,” Mr. Greenburger glumly pointed out. “It’s going to be difficult to find a tenant.”

Thomas Eschmann feels his pain. Mr. Eschmann owns 1379 Sixth Avenue, an 18-story building with a WaMu occupying 3,800 square feet at its 56th Street corner.

“I think I’m going to make it a car wash,” quipped Mr. Eschmann, as he eyed, through his office window, the two-story Chase across the street. “I think [WaMu is] going to be out by September.”

That’s quite an ugly surprise for Mr. Eschmann, who thought he had WaMu locked in place through July 2015, when the bank’s 10-year lease expires. But he isn’t wallowing. “We’re probably going to start marketing the space next week,” he said. “We hope to be able to find someone at the same rent. In this economy, we’ll see if it happens.”

At least Mr. Eschmann has some sense of what’s coming. Most landlords we spoke with had no idea what the future would bring.

Eric McPhee, who manages 1221 Madison Avenue for Orsid Realty Corp., said the status of the WaMu there remains up in the air.

Rubin Margules, the managing owner of 20 Avenue A, is similarly in the dark. “They’re paying their rent, no interruption,” Mr. Margules said. “I’m keeping my fingers crossed.”

So, too, is Kenneth Kahn, who owns 835 Broadway. “We’re about the only [bank] in Union Square in that area,” Mr. Kahn said. “I’m hoping.”

drubinstein@observer.com

CB Richard Ellis will handle all of the FDIC's real estate assets nationwide (including in Puerto Rico and the U.S. Virgin Islands) that have fallen into the FDIC’s lap “in its capacity as receiver for failed financial institutions,” according to the release.

Which leaves us wondering: Will CBRE be handling all of those extra Washington Mutual bank branches that Chase will likely jettison in the coming months?

The full release is below.

CB Richard Ellis Group, Inc. Selected as a Primary Advisor by the Federal Deposit Insurance Corporation (FDIC) for

Portfolios of Owned Real Estate

Dallas – November 26, 2008 – CB Richard Ellis Group, Inc. (CBRE) today announced its selection as a primary advisor to the Federal Deposit Insurance Corporation (FDIC) for portfolios of Owned Real Estate (ORE) nationwide.

The CBRE-led team will be responsible for the management and marketing of residential and commercial ORE throughout all 50 states, Puerto Rico and the U.S. Virgin Islands. The portfolios will be comprised of assets that are held by the FDIC CBRE’s work will include the management, leasing, and disposition of real estate assets.

“CBRE is honored to have been awarded this important assignment and to have the opportunity to serve both the FDIC and the nation,” said William Concannon, Vice Chairman, CBRE Global Corporate Services. “We are dedicated to delivering the highest level of service to the FDIC by bringing to bear the full spectrum of CBRE’s platform and expertise.”

CBRE’s Public Institution & Education Solutions team led by Theodore Carter, Executive Managing Director in CBRE’s Washington D.C. office, will oversee ongoing client services. Ken Pearson has been named the Alliance Director for the account and will lead a nationwide team of asset managers, property managers and marketing personnel to support the day-to-day aspects of the account from Dallas. CBRE will also incorporate its various lines of business to assist, including Valuation, Property Management, Leasing and Sales.

“We are thrilled to add the FDIC to our growing list of public sector clients,” stated Mr. Carter of CBRE.

In addition to accessing the full breadth of CBRE’s service line portfolio, CBRE has engaged Realogy, a global provider of residential real estate and relocation services, as a lead subcontractor for the residential real estate portion of this business and RR Donnelley’s Global Real Estate Services division as the lead subcontractor for data management, reporting and inspection needs on the account. CBRE has identified other teaming partners, including small and minority businesses, to support this important account.