i think michael o'neil has a long history of creating valued companies he's been with. i think the transition here is important. michael corbat is very well respected by the regulators. the process is so critical because citi really generates a ton of capital. i think the ability to return some capital through buy backs, through increased dividends is critical. i think the upside to citi has been kind of, you know, sped up here. i think vikram was doing a lot of the right things, but the regulators did not like him. >> you've been waiting for a dividend too. they couldn't pay a dividend after failing the stress test. as a shareholder, are you frustrated? does it make sense it was time for him to go? >> well, i don't think it was time for him to go, but unfortunately the relationship historically was very bad with the regulators, particularly sheila bear, who really embarrassed him by what she wrote in the book about him. sheila scuttled the merger between citi and wachovia. i think vikram would be a hero today had that merger happened. it would have created a lot of grea

reports suggested there were tensions between the former ceo and current chairman michael o'neill over pay and strategy that led the 55-year-old to quit. citigroup stock has lost 10%, but as the former ceo all to blame for the poor performance? pandit was, in fact, handed the mother of all hospital passes when he took over the helm at the end of 2007, and stuart kirk, head of the lex column, joins us. first you have to explain to me, at least, what a hospital pass is. what do you mean by that? >> that's being the thrown the ball. >> it's a rugby term? >> it is. >> this shows my lack of knowledge about rugby. >> it also shows he took a pile of rubbish. >> it was in free fall when he became the ceo and kept on falling to the bottom. >> city has trailed competitors over the period during the recovery where he can't necessarily blame where he inherited. or can he? >> also underperformed a lot in the rebound as well, and i don't think it's really his fault. i don't think anybody else could have done any better. i think he did the sensible thing as well. i've met him lots of times. i think h

michael corbat and citi chairman michael o'neill hosted a call of their own and explained what happened. so to be clear, today's changes do not reflect any desire to alter this strategic direction of city. >> o'neill and pandit have reportedly clashed on >> reporter: o'neill and pandit have reportedly clashed on everything from pandit's compensation to the bank's future. neil barofksy, the government's former special inspector for tarp and author of the book "bailout," said pandit's departure was overdue. >> i don't know whether he was forced out, encouraged to leave, or he found the current atmosphere to be too hostile to stay. but it doesn't surprise me, and there's nothing surprising and it probably was his time to go. and it probably was his time to go two, three or four years ago. >> reporter: pandit has been with citi since december 2007, inheriting a banking monster on the brink of failure. he steered it through the financial crisis, repeatedly asking the government for bailout money. >> he had perception problems in washington really from the very beginning. and it's hard to thi

new ceo michael corbat and chairman michael o'neill are currently on the line. we'll have more on that shortly. we have adam shapiro on the call. he will join us with all the details. >>> our top story tonight the second presidential debate kicks off in just a few hours. this time around it will be town hall-style with actual voters asking the candidates their burning questions. here with a preview is our very own neil cavuto. neil, i noted today both you and lou dobbs are pretty suspicious of the undecided voters out in the audience. how come? >> i don't know. if you had a chance, melissa to be invited to a debate but the condition was you have to be an undecided voter, all right, count me an undecided voter. you know what i mean? i don't want to sound overly jaded but it is a little suspicious. there will be 80 undecided voters sitting in that audience tonight asking questions. i'm not casting aspersions. for all i know they might be genuinely undecided. we know in this election year there are very few are. melissa: i didn't think there were 80 all together wh

this is not a big surprise michael o'neill tries to get him out. and then he was ousted. liz: he tells people was his decision. i believed charlie gasparino >> it is messy. if this was a smooth transition this call but has been thrown together a 4:30 p.m. when have been set up a long time ago. then mike mayo said it is poor corporate internet -- interference. sheila bair was on this network 2007 and was asked should we break up citi group? at the time she could not answer directly. interesting to hear the answer today. liz: that is a question. and you'll be on the call in the will break and with any details. said the nation's third largest bank break up? how much of the decision to push out vikram pandit had to do with regulators? one of the top regulators we have sheila bair on the phone. figgie for joining us. i have heard anybody ask you write off the bat to your gut reaction when you heard vikram pandit was out? >> this is the board doing their job. you just mentioned grolier earlier returns are down 90% since he took over. he lost the confidence of the shareholders w

turnaround specialists who became citigroup's new board of directors - in particular, chairman michael o'neill. "we actually hold the board in high regard. it could be that the board wanted to go in one direction and pandit wanted another way and it wasn't going to be resolved without pandit and his top lieutenant leaving." pandit's successor is mike corbat, who heads citigroup's operations in europe, the middle east and africa. "from my perspective the focus on international will continue. another positive is that he's familiar with citi holdings, which holds the bad assets. good to have someone familiar with it in the lead role." in the post-financial crisis, analysts say the citigroup shake-up reaffirms that boards of directors are in charge, not ceos. some believe that's only going to increase under the dodd-frank act, which extends a more active role and legal responsibility to boards in the operation of a company. the exit of vikram pandit from citigroup leaves only 2 of the original big bankers still on wall street since the bailout days. jamie dimon of jp morgan chase and lloyd blankfi

city chairman, michael o'neill, and new ceo, michael core bat will host it. ashley: interesting to see what they have to say. the dow posting big gains today, up 114 as earnings season gets underway. my next guest says look for consumer growth for long term investment ideas. jason pride, from glenmede which manages by the way over $20 billion. jason, thanks for joining us. >> thank you, ashley. ashley: i didn't realize there was any manufacturing going on in the u.s.. >> well, you know the u.s. manufacturing renaissance as we've been hearing for quite some time now, it is a very gradual improvement. what happened is, the u.s. held its labor costs fairly well to the majority of the international markets. everybody in europe, other than germany has seen a fairly dramatic rise over the past decade or so in their labor costs. we're seeing some of the results of that now. we know that, costs have been increasing or at least wages have been increasing to the tune of 10 to 15% in emerging markets. that means two things of the as those wages go up, u.s. wages become

board, michael o'neill, they lost confidence in him and wanted him out. they did that after the bell that monday. that is not the story that mr. o'neill and that citigroup officials have been telling people. they went on a conference call the following day and said he left on his own accord. what we have right now is what i known as a formal investigation into theacts and circumstances and exactly how this guy left the company and why. it is a pretty interesting story. as i said, when he left, that whole thing about leaving that monday, after the conference cl announcing earnings, that shocked the market. shares actually went up initially which will tell you something about vikram pandit's reign over at citigroup. but the sec is looking at the disclosures, if they were proper and did citigroup come clean to the market and tell the market the truth about why he left. was it really his decision or was he ousted? i'm telling you that our sources at firm mr. o'neill that day right after the market closed at about the 4:02, after the coerence call for third qu

"the new york times" reporting that the chairman, michael o'neill planned to remove pandit for months. pandit was offered three letters of termination, resign immediately, resign at the end of the year or be fired without any cause. guys, should citi have told shareholders that's how the land lay? >> well, first, it is perfectly fair if mr. o'neill decides he wants somebody else to convince the board to do it. what i have a problem with here is mr. pandit came out and said this was my own decision. simon and i were talking about this the day it came out. it was nonsensical. now we find out. i agree with harvey pitt. he said given a choice between lying or simply not saying anything, i think mr. pandit should simply say nothing about this. >> i don't know if there's a way to make this a great story from their perspective. but, hey, i don't think that's the way anybody would want to go. it doesn't look good, as bob just said from pandit's perspective. but i think there are a lot of questions about whether they could have communicated better about what was really behind this. like the tr

that same dai citi n director michael o'neill chairman.s a much more hands-on chairman, a trait tra fueled the tension between him and pandit. in july, another misstep. citi overvalued the joint venture it has with morgan stanley. last friday, a person who saw pandit in tokyo said he didn't speak like a man about to lose his job. all of this combing to the fore on monday. that's when citi reported very strong third-quarter earnings. pandit gives no hint on an analyst call he's about to resign. sources say the bank's recent m missteps and differences between pandit and o'neill led to his resignation late monday. one top citi official telling cnbc there had been conversations about pandit and the board about his leaving for multiple weeks. the board having already identified a successor. so after pandit resigns, some of the members of the operating committee were told about the resignation monday evening. others on a call on tuesday morning. that's when long-time pandit lieutenant john havens he signed as well. the public announcement later

sources telling "the new york times" bank's chairman michael o'neill was working behind the scenes for months and that pandit was summoned to a meeting telling him the board lost confidence in you. pandit then resigned immediately. >> it made it difficult from what i understand in terms of the relationship with the board, which was quite testy. we knew that day when it was announced something was awry. we reported quickly he had been forced out. i used the word fired. that's clearly the case. been waiting for a story like this to give us more. i've been doing reporting on this and having conversations but this is a nice story by the "times" in giving us that time line. we wondered when o'neill came in and i heard this antidotedly that he wanted this job. it has been said to me that this guy is running citi right now. that would seem to be the case from the reporting that's been done from the "times" in terms of the process he took to get board members over to his side to force out pandit. with pandit i wonder why he went down a route of saying it was my decision. maybe better having sa

story about the sort of narrative behind the scenes of the ousting if you will of vikram pandit, michael o'neillyour chairman, offered him three press release, you can resign immediately, you can resign at the end of the year or we can say you're fired without cause. "a," did you know about any of this and, "b," what do you make of it? >> i'm sorry, peter. it's sorkin. i know you're expect can that from me, but i just want to apologize in advance. >> hey, it comes with the territory. i know mike corbat and he's been with the firm for a very long period of time, almost three decades, and that story aside, we're focused on the future, not -- not the past, so it's as simple as that. >> hey, peter, i know you made a bet with warren buffett on the housing industry -- >> he paid up. >> i was wondering about that. >> he did. it was premature, he didn't need to pay up so quickly, but he sent me a note saying, peter, this is painful, warren, along with a dollar bill. >> i meant to ask him that when we saw him this week but i forgot. >> i'm getting it framed, by the way. >> what were the expect parameters

. >> now just reading through this the chairman of the citigroup board of directors michael o'neil sayssion since his appointment until the present time he's restructured and recapitalized and strengthened and refocused business." >> you know how they say that. you never know whether we're happy about his decision to honor what we wanted him to do sometimes. i don't know. >> he did seem like he made it through the roughest time for that company, finally starting to turn the corner. >> ceo and coo, correct, so both are gone. >> you're right, coo and president are gone, too. >> what? >> havens is gone, too. the coo and president. >> top two. >> i don't know what to make of this at this point. >> ahh, yeah. the fundamentals we have in place are solid, we are on the right path, this is corbat talking. in this market we must allocate our resources and our products with the highest potential and productive business. >> stock is trading down on this, 36.66 was where it closed yesterday and the premarket it's at, well the bid/ask is 35.72 to 35.75, and -- wow. >> and here we're back to, okay, s

. >> look at what mitt romney--look at what ronald reagan and tip o'neill did. >> michael: i mean, asfriend cenk uygur would say, of course! the reagan defense. they've relyied on drawing a comparison to ronald reagan as well as one other president. >> it's been done before. >> it's never been done before. >> jack kennedy lowered tax-- >> now you're jack kennedy. >> if jack kennedy only knew how much he would come up in vice presidential debates i think paul ryan knew where that was going. i'm joined by erol lewis and thomas frank, thank you for sticking around and talking to us. you know in looking back at this it really taxes the way that they come up in these debates. the thing they're not talking about are mitt romney's taxes. the idea that they can look back and talk about taxes and ryan still getting caught with these lies and then the next day saying that's exactly what we meant to say. how does this work, errol. >> a promise has been made. a big broad promise has been made to splash taxes. it's estimated by a reasonable objective source that this could cost treasury 5 trillion

to his arrival but more importantly going forward, what is so interesting here is michael neal is the new chairman. o'neill is in there day to day. it's unbelievably good, his record, in turning around companies. i believe he was the one behind getting pandit out. he has a man in there now and this company will be shakened up now over the next 12 months as they turn this company around. >> gerard, the stock is up a percent today so people are not -- i guess not that upset about it. but let's play a game. if the stock is down 8% on the news, wouldn't folks be saying, hey, where did this come from? why didn't you tell us yesterday? how could we believe that this just took place in less than a 24-hour period from earnings to now? again, it seems to me illogical that this -- a decision of this magnitude took place in that short amount of time? >> i agree with you. i don't think it d i think it took place since o'neill came on board. he was the day-to-day active chairman and he was in i think with pandit every day and when you look at o'neill's record of bancorp of hawaii from 2000 to 2004 he shrunk it by over

michael corbat, that's an interesting take. you're right. they combine the chairman and ceo roles with this new position. >> no, because it's mike o'neill's agenda. anyone can go into that slot, and it's mike o'neill's agenda. >> okay. chairman's agenda on that. in terms of job cuts, you've been saying we're going to get more layoffs on wall street. what are you expecting? >> you've seen lot of european banks have layoffs. this gets back to the question you asked me about warren buffett. the only way banks will return on assets and equity is if they streamline the business and get more profitable. shareholders are saying, we're not interested, because the returns are not good enough to invest in. >> we saw light revenue growth. that's the only way they're going to boost the bottom line, cut down expenses. >> the bottom line is clearly boost by qe-3. that only affected the big banks. the big banks have a lot of wood chopping to do. you have efficiency ratios in the 60% range, which they should be in the 40% range. there's a long way to go. that takes real leadership. that takes real execution. it's been so easy for the banks for so long up to 200

i think last week mike o'neill made this decision they were going to bring michael corbat back to thee sort of role, maybe president of citigroup. have vikram pandit stick around and have corbat come back to the states. i truly believe on monday, when the company reported its earnings, pandit had not made a decision at that point on monday that he was not going to stick around for that plan. that's what happened. late monday, he made the decision, as i discussed with you yesterday, carl, some people have that personality. he said, i don't like that. i'm not going to stick around. the interesting thing about this whole sort of soap opera episode to me is, in speaking to big revenue producers at citi yesterday, despite the well reported 89% decline in the stock price during the pandit tenure, more people will focus on the legacy of pandit. they refer back to chuck prince. they'll say pandit did an okay job. he did a good job for us. it was chuck prince who was the worst ceo in the history of citi, which i thought was kind of interesting despite the stock price. i want to talk about fina