On July 9, 2007, Chuck Prince, then the CEO of Citigroup, made a comment that was to become notorious: “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” Prince meant well. He wanted to reassure reporters in Japan that signs of weakness in the U.S. subprime mortgage market would not cause Citigroup, a major player in that market, to pull back from further lending there.
A mere two months later, Lehman Brothers filed for bankruptcy as a result of its losses on subprime mortgages, triggering a meltdown in the global financial system. As the mortgage market collapsed, millions of Americans lost their homes. U.S. taxpayers had to bail out Citigroup to the tune of $476 billion in loans and guarantees—almost $4,000 per U.S. household.