Just a remarkable day in the Fly-Over Zone. Middle of August and the temperature never rose above 70F under a cloudless sky. True football weather which, thank goodness, is just around the corner. A glorious day...but not for Jamie Dimon who was called out--though not by name--by the U.S. Attorney in New York as he announced indictments of two J.P. Morgan employees in the "London Whale" imbroglio.
Jamie has gotten himself trashed by one of many applications of the Law of Large Numbers. The loss suffered by his bank was a VERY LARGE number to all but perhaps the Warren Buffetts of this world and people take notice. The larger the number, the higher up goes the blame game and $6 billion gets you pretty much to the top. Jamie also made the killer mistake of under-stating and under-playing the loss, perhaps even finding a bit of humor in the entire affair before he was in full possession of all the facts and that is a real no-no, completely unappreciated by the regulators and the cops on the beat. Is he going to recover? No, not completely. Once the myth of invincibility is gone, it never comes back. Jamie is now an ordinary, very bright and very capable guy if there is such a thing, but the minute you start to believe the hype the Gods have a funny way of adjusting reality. I actually feel a bit sorry for the guy and I never thought I'd be saying that. I wonder who is next in the blame game environment in which we live?
The other guy I'm beginning to feel sorry for is Larry Summers. Now as we all know, Larry is not God's first Nice Guy creation, but the manner in which he got trashed today by NYT columnist Maureen Dowd had to be a classic. Mo must be going through another bad relationship or something because this was most vicious I Hate Men rant in quite a while, focusing on Summers but involving Bob Rubin and even Bill Clinton as well, as the responsible parties in the Crash of '08. Of course she doesn't know what she's talking about but I must say it was a kick to have that mob attacked by Mo in the Times. The girls are really pulling out all the stops to get Janet Yellen the Chairgirlship, and speaking of Janet, her guys at her bank in San Francisco didn't, IMHO, help her a lot in releasing a study which concluded the all the QEs and balance sheet build-up don't have an effect one way or the other. Their boss is a BIG supporter of the program you see, and that and being a nice person are the two most quoted reason for the support she receives from the street. The study also states that there is a kind of direct linkage between Fed directional other-speak and market reaction, which of course isn't the case and which hobbles the entire argument, but Fed studies and the Real World are generally not found in space occupied by Real People. Nevertheless, it wasn't helpful but then again neither is the battle royal going on over who is the next person to occupy what is now the most influencial financial position around. I say now because with a continued effort to infuse even higher levels of stupidity into the selection process, this administration seems bound and determined to belittle the Fed and present it as just another political component run by a political hack. Only thing I can compair this to is a day in the 60ies in August in the Mid West. Weird.
Showing posts with label Bob Rubin. Show all posts
Showing posts with label Bob Rubin. Show all posts
Wednesday, August 14, 2013
Wednesday, July 25, 2012
FOR THE SECOND TIME IN HISTORY...
Once upon a time there was this old, jewish tax collector, a profession held in the same regard as a banker of today, riding his donkey somewhere in middle east when suddenly, WHAMO, a bolt of lighting comes down and knocks him on his ass off his ass and the next thing you know he's writing epistles all over the place and being made a saint which in those days was a BIG step up from a tax collector. Oh, he stopped being Jewish as a result.
Well, would you believe it? The same thing happened today. Sandy Weill, former Chairman of Citigroup, got knocked out of his Limo on the way over the the CNBC studios and when he gets there he calls for the break-up of the big banks and a return to the good old days of Glass-Steagall thereby ending Dodd-Frank which he claims is too long.
Now you have to remember that it was Sandy and his big buddy Bobby Rubin who was the Secretary of the Treasury at the time and Bill Clinton who was the beneficiary of humongous fund raising by Sandy who killed Glass-Steagallway back in 1998. And you should also remember that it was Sandy as CEO who merged Travelers (an insurance company) with Citigroup, chaired at the time by John Reed under a sweet-heart agreement with the regulators that essentially stated that although the merger probably couldn't survive legislative scrutiny, if the law changed in two (later, five) years, it would be finalized but that in the meantime the companies could start putting things together. Obviously, the fix was in and sure enough, bye, bye Glass-Steagall and when Bobby left Treasury he wound up at Citigroup as a Vice Chairman, doing Sweet Fanny Adams and getting paid $15,000,000 a year. Oh, somewhere along the line Sandy got John Reed fired so he ran the entire show, and when he was ready to leave he left the entire thing in the completely incapable hands of Chuck Prince. The rest, unfortunately, is history.
Now comes Sandy who was the prime mover in all of the "universal bank" and "synergistic allignment" movements in the U.S. (it's was and is still going strong most everywhere else) deciding that everything in which he believed was wrong and except for the fact that he remains Jewish, this guy has done the biggest 180 since St. Paul and I ask myself, "Self, why?" Could it be that he is really willing to admit that he made a mistake? Not the Sandy we knew and loved, but who knows? Is there something in it for Sandy? Beats me, but make no mistake, this sets the debate at a much higher level and if has the effect of killing Dodd-Frank that would be a great thing but of course it will not. Frankly, I couldn't care less one way or the other. Break em up! Think you will have accomplished anything? Think again. It was the failure of the purest of the investment banks from a business-line standpoint, Lehman, that started the whole thing rolling down hill. With Sandy, the truth will out as it always does but I have a delicious theory which I share with you.
Remember who was Sandy's protégé at Citi? You guessed it, Jaime Dimond, and remember what happened? Jamie fired Sandy's daughter and Sandy fired Jamie! Well, Jaime wandered around in the wilderness for a bit but eventually he landed as CEO of First Chicago which got itself bought by Chase and after some twisting and turning Jamie emerges as CEO of J.P. Morgan-Chase and, until just recently, was crowned the finest banker the world has ever seen since the Medici on the basis that he avoided most of the bad stuff of '07-'08. Of course the reason he did that was because his bank wasn't set up to do it (although he was building the capability at the time) and as luck would have it it wasn't up and running. For firing his daughter and for taking his position as the world's greatest living banker, I think Sandy is madder than a black snake and it's payback time! He's trying to break Jamie's Tinker Toy! It's crazy of course but we live in crazy times. Tell me I'm wrong...I dare you.
____________________________
The Suit was on the Hill today--and will be tomorrow--getting grilled on Libor. Forget about a mass conspiracy to rig rates against clients; but there may be something here that has not been discovered. Like Iago, "tis here but yet confused." I'm working on it.
Well, would you believe it? The same thing happened today. Sandy Weill, former Chairman of Citigroup, got knocked out of his Limo on the way over the the CNBC studios and when he gets there he calls for the break-up of the big banks and a return to the good old days of Glass-Steagall thereby ending Dodd-Frank which he claims is too long.
Now you have to remember that it was Sandy and his big buddy Bobby Rubin who was the Secretary of the Treasury at the time and Bill Clinton who was the beneficiary of humongous fund raising by Sandy who killed Glass-Steagallway back in 1998. And you should also remember that it was Sandy as CEO who merged Travelers (an insurance company) with Citigroup, chaired at the time by John Reed under a sweet-heart agreement with the regulators that essentially stated that although the merger probably couldn't survive legislative scrutiny, if the law changed in two (later, five) years, it would be finalized but that in the meantime the companies could start putting things together. Obviously, the fix was in and sure enough, bye, bye Glass-Steagall and when Bobby left Treasury he wound up at Citigroup as a Vice Chairman, doing Sweet Fanny Adams and getting paid $15,000,000 a year. Oh, somewhere along the line Sandy got John Reed fired so he ran the entire show, and when he was ready to leave he left the entire thing in the completely incapable hands of Chuck Prince. The rest, unfortunately, is history.
Now comes Sandy who was the prime mover in all of the "universal bank" and "synergistic allignment" movements in the U.S. (it's was and is still going strong most everywhere else) deciding that everything in which he believed was wrong and except for the fact that he remains Jewish, this guy has done the biggest 180 since St. Paul and I ask myself, "Self, why?" Could it be that he is really willing to admit that he made a mistake? Not the Sandy we knew and loved, but who knows? Is there something in it for Sandy? Beats me, but make no mistake, this sets the debate at a much higher level and if has the effect of killing Dodd-Frank that would be a great thing but of course it will not. Frankly, I couldn't care less one way or the other. Break em up! Think you will have accomplished anything? Think again. It was the failure of the purest of the investment banks from a business-line standpoint, Lehman, that started the whole thing rolling down hill. With Sandy, the truth will out as it always does but I have a delicious theory which I share with you.
Remember who was Sandy's protégé at Citi? You guessed it, Jaime Dimond, and remember what happened? Jamie fired Sandy's daughter and Sandy fired Jamie! Well, Jaime wandered around in the wilderness for a bit but eventually he landed as CEO of First Chicago which got itself bought by Chase and after some twisting and turning Jamie emerges as CEO of J.P. Morgan-Chase and, until just recently, was crowned the finest banker the world has ever seen since the Medici on the basis that he avoided most of the bad stuff of '07-'08. Of course the reason he did that was because his bank wasn't set up to do it (although he was building the capability at the time) and as luck would have it it wasn't up and running. For firing his daughter and for taking his position as the world's greatest living banker, I think Sandy is madder than a black snake and it's payback time! He's trying to break Jamie's Tinker Toy! It's crazy of course but we live in crazy times. Tell me I'm wrong...I dare you.
____________________________
The Suit was on the Hill today--and will be tomorrow--getting grilled on Libor. Forget about a mass conspiracy to rig rates against clients; but there may be something here that has not been discovered. Like Iago, "tis here but yet confused." I'm working on it.
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