John Dillinger used to rob banks back in the 1930ies. Story has it that he had a girl friend known as "The Lady in Red," her, favorite color, who dropped a dime on him (maybe it was a nickel in those days) to the G's who, taking no chances, ended John's career with a hail of bullets from 20+ shooters in Hammond, In. Willie Sutton tried to pick up where John left off c. 1950 but we really haven't seen a equal to Dillinger since. Up to today that is.
The Leader and his thug of an Attorney General makes Dillinger look like a kid lifting bubble gum out of a candy store. The Great Bank Robberies (for there will be more) of 2013 begins with J.P. Morgan and ends God knows where. Besides being where the money is as Willie used to put it, Morgan is a wonderful target because of it's Chairman, Jamie Dimon. Now you know my views on Jamie so there is no point in retilling plowed ground, but Jamie after being the #1 guy on the Street during The Leader's first campaign in 2008 actually began to believe that his support had given him access to the now-President of the United States. As in most things Jamie was right but he never realized that the access was only to tell The Leader things The Leader wished to hear, not that he was screwing up almost from the git-go. The Leader doesn't like that. Say goodnight, Jamie. and thanks for allowing us to treat you and your shareholders as an object lesson for all those out there who think they can say anything but, "Yes sir, yes sir, three bags full sir."
$13 billion in fines and more to come, not to mention the possibility of felony charges hanging like a Sword of Damocles should the message be somehow misunderstood. This is the most disgraceful rip off I have ever seen n my long life. Now Morgan is not staffed with Little Sisters of the Poor but for the institution to be saddled with this punishment for activities, the majority of which were undertaken by entities that they were encouraged to absorb on behalf of the "SYSTEM," is disgraceful.
I'm not going to go into chapter and verse as to where the blame should lie or attempt to apportion it to the many institutions involved and to the politicians who enabled the major players to damn near wreck the financial system (Remember Barney..."I think I'll roll the dice on this one..." whilst spewing enough saliva to expunge a small camp fire) but it might not be a bad idea to question where all of this is going to put us.
Fear not for J.P.Morgan or Citibank, or Bank of America, but does anyone actually believe that with creatures like The Leader and Holder hanging about in the executive branch and Crazy Lizzy, who apparently never met a bank she liked that had total footing over $250,000 leading the charge in the legislature, that the guys running these institutions never had the thought cross their minds that maybe buggering out of what we refer to as retail banking might not be such a bad idea because if you don't deal with the public it's hard even for Holder & Co. to accuse you of screwing them? Now there's a step forward in the growth prospects of the United States isn't it? North Carolina National Bank, ("NCNB"), from whose loins sprang Bank of America, was known in the trade as No Credit for Nobody. Just what we need; fewer players on an already emptying playing field with the very real possibility of unintentional mono plies arising. "That won't happen, Charlie, well force 'em to make loans!" Ah, and how are you going to do that my friend if they are no longer here?" You don't need brick and mortar for a non retail business. Get what I'm suggesting? Oh, not today nor not even tomorrow, but keep it up and that is exactly what you may get. The Lady in the Red Dress is a high maintenance broad. Don't mess with her.
Showing posts with label Diamon. Show all posts
Showing posts with label Diamon. Show all posts
Monday, October 21, 2013
Thursday, May 16, 2013
HELP ARRIVING
Remember our old friend Prof. Steve Davidoff of THE Ohio State University, he of the buggered explanation of the Foreign Sovereign Immunities Act? This time around he has written a very interesting piece in the N.Y. Times on the goings-on at J.P. Morgan and the attempt to separate the roles of Chairman and CEO presently held by the World's Greatest Banker, Jaime Diamon...until a self-proclaimed large mammal in London managed to get it all wrong to the tune of $6.5 billion.
Anyway, Prof. Steve explores the issue and correctly points out that all of the hoot and hollar about the benefits of separating the two jobs if the belief is that banks are too big to be managed by one person is really silly. To begin, it is foolish to believe that banks are going to decline in sheer size in the modern world. Then again, as he rightly points out, a Chairman's real responsibilities are calling meetings of the board and presiding over them. A Chairman is merely one person on, in J.P. Morgan's case, an 11 member board. So too are there studies pointing out that where there is a strong, independent board...also mostly the case at J.P. Morgan...it is unclear what the separation will actually accomplish He concludes, and I think correctly that this is really all about the concern for the :too big to fail" syndrome on the part of certain shareholders and as an attempt to send a message to Jaime who, even his closest supporters will admit, is a long way from being Mr. Cuddly all the time.
Fair dos, but this seems like a hell of an expensive way to make that point, and while I agree with the main thrust of Prof. Steve's piece, there is one piece of factual evidence that I think he has overlooked and that is of course the happenings at Citigroup.
I have throughout my life become more and more of a believer that it is not the structure that enables success but the people within the structure. Citigroup instituted a split chairman/CEO structure right after the crisis simply because the guy who had both jobs wasn't a schmoozer which was desperately needed inasmuch as the government was the owner of the institution and schmooze is what the government is about. Problem was, of course, the schmoozer wasn't within a Stone's throw of being a banker and while surviving, the institution wasn't moving forward. Enter Michael O'Neill as chairman, and while calling meetings and presiding over the same he set agendas and the first on THAT list was the removal of the CEO. Forget about the stock price which has risen 50% in the last six months, Citibank, whilst continuing to have multiple problems, is well on its way to becoming the leading banking institution in the U.S. It's all about focus and that is what a tough, independent chairman can bring when the CEO has the wrong idea or as was the case, apparently none at all. Boards do not bring that, individuals do, but of course it must be the right individual and in that all important role of corporate governance, I come down on the side of two heads are better than one.
Funny, but if you want to see another example of this in a banking environment, take a look at Standard Chartered about 15 years ago. Same actions, same result. Look, there is no doubt Diamon is a hell of a CEO and for the most part, with a bit of luck, he has done a fine job. But frankly, no form of organization was going to prevent the London Whale from spouting foul deeds. It is the people, always the people, and from time to time they get complacent and examples must be and have been made. Of course, it might be helpful to have an independent and permanent organization structured around the CEO's office which, when required, would have the sole duty of saying, "Jamie, PLEASE SHUT UP!"
We are off to the East Coast for the wedding of one of my former students. It's always really gratifying when something like that happens as it makes you believe that perhaps you've done good in some person's life. I'll have the IPad along for the next week, so keep looking. And thanks Carter for your insight into politics and Co-Op bank which I hope can be discussed next week.
Cheers!
Anyway, Prof. Steve explores the issue and correctly points out that all of the hoot and hollar about the benefits of separating the two jobs if the belief is that banks are too big to be managed by one person is really silly. To begin, it is foolish to believe that banks are going to decline in sheer size in the modern world. Then again, as he rightly points out, a Chairman's real responsibilities are calling meetings of the board and presiding over them. A Chairman is merely one person on, in J.P. Morgan's case, an 11 member board. So too are there studies pointing out that where there is a strong, independent board...also mostly the case at J.P. Morgan...it is unclear what the separation will actually accomplish He concludes, and I think correctly that this is really all about the concern for the :too big to fail" syndrome on the part of certain shareholders and as an attempt to send a message to Jaime who, even his closest supporters will admit, is a long way from being Mr. Cuddly all the time.
Fair dos, but this seems like a hell of an expensive way to make that point, and while I agree with the main thrust of Prof. Steve's piece, there is one piece of factual evidence that I think he has overlooked and that is of course the happenings at Citigroup.
I have throughout my life become more and more of a believer that it is not the structure that enables success but the people within the structure. Citigroup instituted a split chairman/CEO structure right after the crisis simply because the guy who had both jobs wasn't a schmoozer which was desperately needed inasmuch as the government was the owner of the institution and schmooze is what the government is about. Problem was, of course, the schmoozer wasn't within a Stone's throw of being a banker and while surviving, the institution wasn't moving forward. Enter Michael O'Neill as chairman, and while calling meetings and presiding over the same he set agendas and the first on THAT list was the removal of the CEO. Forget about the stock price which has risen 50% in the last six months, Citibank, whilst continuing to have multiple problems, is well on its way to becoming the leading banking institution in the U.S. It's all about focus and that is what a tough, independent chairman can bring when the CEO has the wrong idea or as was the case, apparently none at all. Boards do not bring that, individuals do, but of course it must be the right individual and in that all important role of corporate governance, I come down on the side of two heads are better than one.
Funny, but if you want to see another example of this in a banking environment, take a look at Standard Chartered about 15 years ago. Same actions, same result. Look, there is no doubt Diamon is a hell of a CEO and for the most part, with a bit of luck, he has done a fine job. But frankly, no form of organization was going to prevent the London Whale from spouting foul deeds. It is the people, always the people, and from time to time they get complacent and examples must be and have been made. Of course, it might be helpful to have an independent and permanent organization structured around the CEO's office which, when required, would have the sole duty of saying, "Jamie, PLEASE SHUT UP!"
We are off to the East Coast for the wedding of one of my former students. It's always really gratifying when something like that happens as it makes you believe that perhaps you've done good in some person's life. I'll have the IPad along for the next week, so keep looking. And thanks Carter for your insight into politics and Co-Op bank which I hope can be discussed next week.
Cheers!
Wednesday, June 8, 2011
BULLET POINTS
It is way too hot out here in the fly-over zone to even think so today we just get bullet points to keep the mind turning over.
---Jamie Dimon, the CEO of J.P Morgan yesterday told Ben Bernanke what everybody knows but nobody would say: Has anyone given a thought as to the effect that all of these new regs might have in freezing up the financial system? Amazingly, Ben said "not really," claiming that it was a very hard thing to do but what happened two years ago simply could not be repeated, hence, new regs. A greater example of the lame leading the halt has never been seen. Jaime might have thought about what he was going to get when he dropped a couple of mil of his own money on The Leader in '08. Sorry Jaime. Deal with it.
---Germany jumped on the French bandwagon yesterday in regard to Greece. The effort to give the banks time is now in full voice. Of course no one is asking what in the hell the banks were doing for the last three years, but then again, Jaime can't be in two places at once or can he? He might think so.
---Big vote in the Senate today on the famous Durbin addition to the Dodd/Frank law. The vote was to delay the admendment which would slash fees consumers pay each time their debit card is "swiped" and was fought tooth and nail by the banking industry. The vote to delay failed and the consumers win. Personally, I think anybody stupid enough to use a debit card should be charged !0 bucks a swipe, but the banks take it in the neck again. This is not going to hurt Jaime and his buddies so much but the home town guys that are issuers of cards are going to get murdered. Way to go Sen. Durbin. Why don't you walk into Rock Island National this afternood and see what kind of a reception you get.
---And speaking of Senators...It seems Carl Levin crawled under a rock a few days ago and hasn't been seen since. Remember his hearings regarding Goldman Sachs noted for his liberal use of the four letter substitute for fertilizer? Remember Carl accusing Goldman of the "massive short" that almost ended the world? Well, it seems as though Carl's boys couldn't read and if they could they didn't understand what it was they were reading. Got all the numbers wrong in their final report and managed to convince everybody that not only didn't Goldie have a "massive short," but that Goldie may well have lost money on the trades. Stay under the rock, Senator. The world will be better off, but apologize first.
---And speaking of "massive shorts," THE Ohio State University football program is a massive short if I ever saw one. The joy around the mid-west is palpable and in that state "up north" as Woody used to say it's party time. Who cares if we're in the tank as a nation? Go Blue! We need rain to break the heat. It's driving people nuts.
---Jamie Dimon, the CEO of J.P Morgan yesterday told Ben Bernanke what everybody knows but nobody would say: Has anyone given a thought as to the effect that all of these new regs might have in freezing up the financial system? Amazingly, Ben said "not really," claiming that it was a very hard thing to do but what happened two years ago simply could not be repeated, hence, new regs. A greater example of the lame leading the halt has never been seen. Jaime might have thought about what he was going to get when he dropped a couple of mil of his own money on The Leader in '08. Sorry Jaime. Deal with it.
---Germany jumped on the French bandwagon yesterday in regard to Greece. The effort to give the banks time is now in full voice. Of course no one is asking what in the hell the banks were doing for the last three years, but then again, Jaime can't be in two places at once or can he? He might think so.
---Big vote in the Senate today on the famous Durbin addition to the Dodd/Frank law. The vote was to delay the admendment which would slash fees consumers pay each time their debit card is "swiped" and was fought tooth and nail by the banking industry. The vote to delay failed and the consumers win. Personally, I think anybody stupid enough to use a debit card should be charged !0 bucks a swipe, but the banks take it in the neck again. This is not going to hurt Jaime and his buddies so much but the home town guys that are issuers of cards are going to get murdered. Way to go Sen. Durbin. Why don't you walk into Rock Island National this afternood and see what kind of a reception you get.
---And speaking of Senators...It seems Carl Levin crawled under a rock a few days ago and hasn't been seen since. Remember his hearings regarding Goldman Sachs noted for his liberal use of the four letter substitute for fertilizer? Remember Carl accusing Goldman of the "massive short" that almost ended the world? Well, it seems as though Carl's boys couldn't read and if they could they didn't understand what it was they were reading. Got all the numbers wrong in their final report and managed to convince everybody that not only didn't Goldie have a "massive short," but that Goldie may well have lost money on the trades. Stay under the rock, Senator. The world will be better off, but apologize first.
---And speaking of "massive shorts," THE Ohio State University football program is a massive short if I ever saw one. The joy around the mid-west is palpable and in that state "up north" as Woody used to say it's party time. Who cares if we're in the tank as a nation? Go Blue! We need rain to break the heat. It's driving people nuts.
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