Must admit that Andy Kessler’s column in the Wall Street Journal on Citi caught me by surprise …

I was really impressed with his book on hedge funds, Running Money – so why was I surprised by his insight into Citi in a recent Wall Street Journal piece, where he notes that  Sandy Weill hit the internet wall with his supermarket.
“Were there any real synergies from Citibank’s one-stop shop? I doubt it,” he writes.  ”It failed because internal compensation incentives mainly stressed units, not the whole, the downside of all behemoths. Plus, I don’t know how many customers bought stocks at an ATM machine, because almost simultaneous to his big merger, the Internet disintermediated most of Mr. Weill’s businesses. The best rates and terms and service were in the Giant Supermarket on the Web, rather than just in Sandy’s shopping cart.”

That’s an “ah-ha” moment. Why the Hell didn’t I think of that. And I have even followed the books on Citi and written about Robert Rubin, whose memoir casts him as a modest risk expert, although one who admitted to Fortune that he hasn’t heard the term “liquidity put” until August 2007.

Kessler explains: For Citi, the sure-thing investment du jour was subprime loans, conveniently packed into mortgage-backed securities. You could borrow at 2% and get 4%-6%-8% yields. Who could turn this down? Leverage of 20 to 1 or even 30 to 1 was used to buy this stuff. Shareholders might have balked at so much leverage. Citi, unlike other big US banks, kept this borrowing off its balance sheet in so-called conduits or SIVs (structured investment vehicles). This is how Citigroup grew its earnings.”

Gotta keep dancing, in the words of Chuck Prince.

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