Former Citigroup CEO: Unemployment Will Hit 9 Percent

October 28th, 2008 1:54 PM

Sometimes former CEOs have a reason to be downbeat when they make predictions.

Former Chairman and CEO of Citigroup Sanford Weill told CBS's "The Early Show" Oct. 28 that unemployment would hit 9 percent and that Wall Street CEOs "didn't deserve bonuses this year." It went something like this:

Well, I think we've set in motion a whole series of events that is going to make the economy really, really bad over the short term. I think we are going to see the biggest drop that we've seen in GDP. I think we are going to see unemployment go up to about 9 percent.

Weill said that a year from now things would be a lot better, but still was critical of the Federal Reserve for not acting sooner:

I think we got there late, but I don't think -- by the time we did get to do it we didn't have much time ... I think we had to act fast. I think by injecting money into the banking system, those banks can leverage that 10 times, that money, so that the government can get a lot more bang for the buck. I think that they're going to get their money back. I think the taxpayers are going to be fine.

Smith pushed Weill on CEO bonuses asking, "This whole bailout has made a lot of people crazy, not the least of which is they are reading now, some of these folks on Wall Street are still going to collect their half billion or three quarters, a million or million dollar bonuses."

"I don't think very many," Weill interrupted. "I think the leadership of the banks and the Wall Street firms should really, they don't deserve bonuses this year. This was not a good year for shareholders. They believe in pay for performance and performance wasn't there."

There may be a reason Weill is downbeat with his predictions though.

The Wall Street Journal reported Oct. 23 that Weill was in talks to launch a "private-equity fund that would invest in beaten-down financial companies and assets."