Pity the hapless ex-CEO who has to explain to the U.S. Congress how he got millions for failing at his job. It's like the person in the horror movie who doesn't realize that a bad guy is lurking in the dark woods even though that's clearly indicated by the scary music. In this case, the knife-wielding psycho Jason Voorhees is being played by Rep. Henry "I haven't met a microphone I didn't like" Waxman (D-CA).

What did former Countywide Financial Corp. (NYSE: CFC) Chief Executive Angelo Mozilo, former Citigroup Inc. (NYSE: C) CEO Charles Prince and former Merrill Lynch & Co. (NYSE: MER) head Stan O'Neal expect to happen? That they would finally be able to tell their "side" of the story? That they would be able to counteract media perceptions that they are a bunch of greedy pigs who were rewarded for their incompetence? Apparently, these once mighty kings of the boardroom were that deluded.

Mozilo was the most outrageous, telling the House Committee on Oversight and Government Reform that, "In short, as our company did well, I did well." The Wall Street Journal (subscription required) noted that Waxman, who locked horns recently with baseball great Roger Clemens, wasn't buying it.

Former Merrill Lynch & Co. (NYSE: MER) Chief Executive Stan O'Neal, former Citigroup Inc. (NYSE: C) CEO Chuck Prince and former Countrywide Financial Corp. (NYSE: CFC) Angelo Moziilo are due to testify before the U.S. Congress next week about executive pay. No, ladies and gentlemen, I am not making this up.

The poster children of outrageous executive compensation will appear Thursday before the House Committee on Oversight and Reform, which recently delved into the touchy issue of whether Roger Clemens had performance-enhancing drugs injected into his rear end. The three should have plenty to talk about as CNN/Money.com notes.

Upon his departure from Citigroup in November, Prince left with approximately $68 million, while O'Neal collected about $161 million after he stepped down in October.

Countrywide's Mozilo reportedly stood to collect a windfall of $115 million dollars after his firm agreed in January to a yet-to-be completed $4 billion sale to Bank of America. But after facing heavy criticism from lawmakers, Mozilo said he would forfeit $37.5 million in payments tied to the deal.

This should be a doozy. Committee Chairman Henry Waxman (D-CA), who has taken on numerous special interest groups including Big Tobacco, will have his hands full as his committee examines the link between executive pay and the mortgage crisis. He better have an extra-large gavel handy because these witnesses didn't think they were accountable to shareholders and sure don't think they need to explain themselves to a bunch of politicians.

Yesterday, I wrote about the need for a Congressional inquiry into the pay package given to Countrywide Financial (NYSE: CFC) CEO Angelo Mozilo:

The people getting royally screwed over by Mozilo's pay package are the company's shareholders. Compensation committee members Harley Snyder, Robert Donato, and Oscar Robertson should be hauled before Congressional hearings to explain this abject failure of corporate governance. It would be a much better use of taxpayer resources than holding hearings on what Roger Clemens did or didn't inject into his buttocks.

Well, now it looks like we're going to get those congressional hearings. A Congressional panel invited Angelo Mozilo, Charles Prince and Stan O'Neal in to answer question on February 7th. Congressman Henry Waxman said the inquiry was part of an "ongoing investigation into executive pay."

Unfortunately, these hearings don't go far enough. The people that need to be called in are the dormant compensation committee members who signed off on this garbage, and the institutional (especially pension fund) money managers who have allowed these clowns to remain on the company's board.

All Mozilo et al. need to say is "We were given these packages by our board" and that'll be that. This is a corporate governance, and the people responsible for the systematic breakdown of corporate governance in America need to be called to answer for this failures.

TheStreet.com's Jim Cramer says this bank is too big to be ignored by the government; if it goes, we all go.

Citigroup (NYSE: C)'s (Cramer's Take) to blame for so much that is wrong right now that it seems imperative that someone step in and renounce most of the actions that Chuck Prince put into place and bail out the other parts swiftly to become a plain old bank (POB?) as soon as possible.

We are quick -- depending upon political orientation or sensibilities -- to blame either the aggressive lenders or the irresponsible borrowers. I don't even care any more. What matters is capital, raising capital fast and Citigroup must quickly dismantle the acquisitions Prince made, including the disastrous Japan incursion, and then start selling off businesses and get the government to help bail it out by injecting itself into the structured investment vehicle process. The time has long since passed to worry about moral hazard. The action in Citigroup is critical right now because of a series of horrible decisions made by Prince to get much bigger in mortgages right at the end of the boom.

It must sell its mortgage servicing portfolio, too, agreeing to give some guarantees for some amount of money owed to the buyer as servicing rights can be a lucrative business. The fact that Treasury seems "somewhat" engaged (my quotes) is not enough. The problem at this bank is too big to be ignored by the U.S. government. Put simply, if Citigroup goes, we all go.

How is so much money made on Wall Street? If you're guessing that a most use a "buy and hold" strategy ala Warren Buffett, you're way off. Just like with any stockbroker, the money is made by revolving stocks (i.e., buy and sell all the time) instead of holding them with a well-researched strategy and hoping for the best. Without transaction fees and commissions, many trading houses would be belly-up. Want $9.99 trades to encourage as many trades as possible in a given month? There are plenty of trading companies that would love to help you.

But the recent mortgage and subprime lending mess is a little different. Very simplistically put, instead of turning around bonds and other holding vehicles, companies like Merrill Lynch and Co., Inc. (NYSE: MER) and Citigroup, Inc. (NYSE: C) were buying up collateralized debt using bonds that were backed by subprime home loans. If those loans went into default, the risk to all that debt to these large financial companies is pretty scary. Err, wait...that is exactly what has happened, and as a result of this risky procedure, both of those finance houses are writing billions down in value and Merrill's O'Neal and Citigroup's Charles Prince have been sacked in the span of a week. Whoa!

Ignoring the fundamentals of finance (as in, risk management) is pretty easy for many of us, but when you lead some of the world's largest financial companies, it's gets a tad bit more thorny. If that risk balloons into a problem, you have a huge thorn in your side. This is precisely what happened to Merrill Lynch, Citigroup and many others reeling under the pressure of writing down assets backed by floppy loan foundations. When will the vision increase from a short-term one to a long-term one? On Wall Street, maybe never unless the market implodes upon itself.

Citigroup (NYSE: C) announced $8-11 billion in write downs on its $55 billion exposure in U.S. subprime mortgages/CDOs.

C announced Charles Prince, Chairman and CEO has elected to retire from C. Sir Win Bischoff, will serve as acting CEO and Robert Rubin, will serve as Chairman of the Board.

C is recently trading at $37 in pre-open trading, below its close of $37.73.

Goldman Sachs lowered its 12-month price target to $48 from $51.

C November option implied volatility is at 72, December is at 51, above its 26-week average of 27 according to Track Data, suggesting larger price risks.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Citigroup Inc. (NYSE: C) opened at $51.60. So far today the stock has hit a low of $51.35 and a high of $52.01. As of 10:20 this morning, C is trading at $51.98, up $0.40 (0.8%).

After spending most of 2006 trading in a range between $47.50 and $50 the stock shot up to $57 to close the year but has fallen this year back to around $52. Jim Cramer featured Citigroup this morning on his blog as a stock that is doing things all wrong. Cramer pointed out that he thinks CEO Chuck Prince is doing a bad job, evidenced by today's announcement of layoffs at the bank in an attempt to raise the stock price. Cramer's opinion is that the best way to lift the value of C would be for Prince to either resign or be shown the door. The technical indicators for the stock are bearish and slightly improving while S&P gives C a very positive 5 STARS (out of 5) strong buy rating.

For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $57.50 range. C has never been above $57.00 and has shown resistance above $55. This trade could be risky if C earnings (due out on 4/16) are positive surprise or if Mr. Prince were to resign, but even if the stock rises some, this position could be protected by the resistance just above $55.

Brent Archer is an analyst on the move at Investors Observer. (Free Subscription)

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

Forget about the problems of Citigroup's (NYSE:C) stock price and cost control. The big bank may not have time to fix its internal problems. It is still busy buying other companies.

Today, Citi announced that it would buy big Japanese brokerage firm Nikko Cordial for $10.75 billion. It may be a good deal for the Japanese company, but, by all accounts, Nikko is doing poorly. The company has had serious accounting problems. According to Reuters: "Nikko has admitted forging documents and booking about $300 million in excess profits over two years."

The problems at Nikko raise an interesting question for Citi and begs the question of whether this is another misstep by its management. Why won't Citi seek a joint venture or ownership state in Nomura or Daiwa Securities, two highly successful brokerages in Japan?

Citi CEO Charles Prince has enough trouble at the big financial services firm that he does not need to take up resources cleaning up a mess half way around the world.

Douglas A. McIntyre is a partner at 24/7 Wall St.