‘Citi Morgue’ — burying the financial supermarket, at last

Financial advisors are a witty bunch. They’re dubbing the recently announced Smith Barney-Morgan Stanley joint venture “Citi-Morgue.” It certainly feels like the jackals are gathering to gnaw on the bones of the financial supermarket former CitiGroup CEO Sandy Weill cobbled together during his tenure. Even absent the financial meltdown of 2008, few believe that the supermarket ever really worked. The company was simply too unwieldly; expected synergies never synergized.

And that leaves us with Citi-Morgue — the inevitable dismemberment of Weill’s far-flung banking and insurance empire. Morgan is paying $2.7 billion for a 51% share in the joint venture. In five years, it could be 100% owner and Lord of Retail Advisory Services, deploying more brokers than Merrill Lynch, now a minion at Bank of America. Morgan Stanley may be getting a steal. Taxpayers may not be so lucky. Uncle Sam has pumped nearly $300 billion into propping up Citi; it’s not clear if and when he’ll see a return on the investment.

The JV holds out the possibility for one rare twist: the resurrection of a fading name. Smith Barney may be on its way for a facelift.Once gone, most names on Wall Street tend to die sudden deaths. Drexel Burnham, for example. Or Salomon Brothers, which after the 1990s Treasury auction scandal, found itself hewn to Smith Barney as SalomonSmithBarney. And then it was gone.

Smith Barney brokers are apparently shedding no tears as they loosen their ties to Citi. The Deal Journal reports they never felt fully integrated into the culture and hated the layers of management. The name “Citi” on the business card was no plus, they report. The details on the JV have not yet been hammered out.

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