Friday, April 3, 2009

Singularly reckless Big 5 banks

James Tisch (JT), CEO of Loews Corp. (NYSE:L) stated in a 4-3-09 inteview on Bloomberg TV with Eric Schatzker, "We are all guilty - bankers, regulators, consumers." Really?

JT must be deluded or have a convenient bout of amnesia; to wit JT would have us believe that civil servants, regulators, consumers have the skill set and xray vision to peer into and evaulate that which the Big 5 banks refuse to reveal even to this very moment - today is April 3, 2009! Off balance sheet holdings and exposures; the "hedge fund" visited/s the Big 5 banks of America!

JT would have us believe consumers know as much about those certain few Big 5 banks' SINGULARLY reckless, greedy pursuit of profits and compensation thereon stemming from securitizations, ENORMOUS LEVERAGE, credit default swaps, counterparty risk, off balance sheet entities like SIVs and Asset backed commercial paper and proprietary mark to model securities valuations.

Uh - help me out JT - where is such course syllabus for the consumer and the regulators?

Answer - in certain Big 5 banks IT budgets, legal, regulatory, compliance, supervisory manuals, org charts, employee handbooks and job descriptions starting with the CEOs.
Also check in the Human capital management departments of same and the not so "independent" compensation consultants.

Or is it me? Is it the "systems" which are responsible?

Reminder - over 95% of FDIC regulated banks are NOT in trouble.
Why - how could that be?

The Big 5 cry foul "the market" collapsed. Really?
If the Big 5 were truly only market-weight invested like the 95% of banks which are ok - then what does that tell you? That they decided they knew better (for themselves) and consciously took on way more than market-weight risk huh?

Risks that Tim Geithner, quoted on Bloomberg TV in a 4-1-09 interview with Peter Cook, "banks took on risks they didn't understand, and could not bear" WOW!
WHEN did TG come to this epiphany? Before or after his confirmation hearings?

For what purpose? Simple to book enormous profits, and cause those oh so tiny bonus checks.

They were as Liberace coined "laughing all the way to the bank" huh?
Now they cry. Why should we, the US taxpayer listen?

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