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Why are corporate CEOs resigning over the subprime credit defaults?

This is a broad market phenomenon that is affecting the entire financial sector. Are there actually some CEOs of other financial services companies who looked at collateralized loans over the last few years and thought, "No, there's too much exposure here to the subprime market and, since I can tell the future, I know that subprime mortgages are going to start defaulting in record numbers. So we're going to reduce our exposure to this particular investment vehicle"? Of course not. It's not like any other human being in the same position would have managed any differently. So why were Citi's and Merrill's CEOs forced out? This whole thing really has nothing to do with them....

Public Comments

1. In any bad situation, there must be a scape goat.
2. they knew these pepole had bad credit too begain with and when things changed they knew they would go into defalt it looked good on paper but when it came too a head someone had too take the fall
3. You are incorrect. The CEO of these firms has the obligation to oversee the activities of the firm, including just how much risky investment the firm decides to take on. If these CEO's didn't do that, they didn't do their jobs. Note that Merrill Lynch and CitiGroup are two of the firms with the largest write off's due to these defaults. Wachovia and Bank of America also lost in that game, but far less than the other two did.
4. A CEO's job is not to predict the future it is to be ready for the unknown. Example -- Citigroup and JP Morgan Chase are often compared. Both are extremely large, with a similar diverse range of financial businesses. Both took hits in the subprime debacle that is now playing out. Whereas Citi had nothing to offset the negatives, JP Morgan Chase did and its overall performance has been quite good. It is not so much that Jamie Dimon at JP Morgan had a crystal ball and Chuck Prince didn't -- it is that Dimon had control of his organization, invested wisely in technology and people and as a result his organization was nimble, more able to weather whatever storm might come long. Prince was at the opposite extreme. Now Citi is in real trouble -- with no one (NO ONE) in the organization able to jump in as CEO except maybe the new CFO and he is a longshot. Rubin will sit as acting CEO for a good long while -- it will take an outsider a year minimum to get their hands around the organization. . Given this what would you do -- give Prince a "way to go Brownie" slap on the back, or push him out?