I am going to play the contrarian, getting rid of Smith-Barney is REALLY good for Citi. Many like on Fast Money say, "hey why on earth are you getting rid of the cash cow?" And with Citigroup getting a potential 10 billion, I am thinking WAY TO GO CITI!

Why do I think what I do? Because obviously I am the only one in the market thinking this.

“You’re selling out the future to get through the crisis of the present, and unfortunately they don’t have a lot of other choice,” David Trone, an analyst at Fox-Pitt Kelton Cochran Caronia Waller in New York, said in a Jan. 9 interview.

I actually think Morgan Stanley is getting a dud. Let me explain.

I live in Switzerland, and I work for an investment bank. As such I know what what the future of brokerage business is going to be about. I know this because of what I hear from the grape vine.

The future is not in the business of Smith Barney. The reason is because those brokerage units are too expensive and offer too little value. The investment bank I work for has a retail brokerage and their fees and services are actually pretty crappy. I once asked about that, and informally the answer was, "we need about 500,000 CHF from you." Then we can offer Private Banking services.

Advice for lots of little people is expensive and does not bring in the returns that banks want. They simply cannot compete against the Morningstar’s, or CNBC, or MarketWatch’s of the world. These sites offer better advice, service and quality than a retail brokerage can. So that is strike 1 for Smith Barney.

The fees that Smith Barney charges for any sort of transactions are simply too high. The fees are from another era. Smith Barney, Morgan Stanley cannot compete with the E-Trades, Interactive Brokers, or Think or Swim brokerages. They offer better prices and better executions than what Smith Barney can ever offer. So that is strike 2 for Smith Barney.

So what could Smith Barney offer? Private Banking, and that is growing by leaps and bounds. But there is a rub. With Private Banking people want to save taxes, and with Smith Barney in the US that will not work. The US government is cracking down on offshore accounts putting Smith Barney at a massive disadvantage to the likes of Switzerland, Singapore and other countries.  So that is strike 3 for Smith Barney, and a strike out!

Smith Barney could be transformed, and that is the problem, because it costs money. Thus with Citigroup selling the unit they are actually doing a good thing, and focusing Citigroup, and not having to retool a dying business practice. Personally I wonder where Morgan Stanley will make money in the future. I am completely skeptical.