Jamie’s Cryin – Episode 3: Wherein Jamie Loses the Debit Swipe Battle & is Forced to Take Bernanke to Task for Raising Capital Requirements from the Floor of a Finance Summit
Update: I want to add that IMO Jamie is the best Bank CEO out there. He is brilliant. He is savvy, he is kewt, he is a capitalist, I dig it. I wanted him for Treasury Secretary and wrote about it in March of ’09. But the TBTF have refused to allow the consumer to deleverage from the crushing weight of their housing debt, and the TBTF helped create this problem.
They are the whiz kids in the room, Mom and Pop Homeowner need a HOLC, and the TBTF blocked it and continue to block it, assuring us a long, slow, slog through a Depression like forced deleveraging as the Fed continues to try to inflate its way out of this massive debt it used to prop the very same TBTF.
All unnecessary pain, if only the TBTF would take some of the responsibility they like to lecture about when they laughingly call principal writedowns moral harazrd after they made the Goddamned loans. (see Meredith Whitney ask Jamie about this on an earnings call in January 2010)
Lost juice Jamie? Have you Lost Hand? Did you think buying the POTUSship for Obama meant a free reign?
Did you think basing all our policies on what is best for a handful of TBTF bankstas was really a good way to GROW the American economy?
Oh woe is me. Cry me a river.
PragmaticCapitalism has it:
(…) his bank was saved from the brink of disaster in 2008. The US government took extraordinary measures to ensure that he did not go down as one of the greatest bank failures of all-time. In fact, the US government did him a huge favor by making his bank the linchpin in the US economy.
Of course, this was done by making Mr. Dimon’s already too big to fail bank too bigger to fail. But none of this is enough. Saving someone’s career and ensuring that their bank is now an instrumental portion of the US economy is not enough. And in a fit of rage Mr. Dimon went and rewarded himself with a monstrous $16MM pay package last year. After all, he deserved it. But this is not enough.
It’s not enough to pay yourself outrageous sums of money when your company should be in a hole in the ground. It’s not enough to have the government by the throat and know that the taxpayers can never let your company fail. It’s not enough to have been a key player in helping the US banking system become the gigantic leach on the world’s largest economy. It’s not enough that you help pull our best and brightest minds out of productive fields and into finance where they will do nothing but think of new ways to help separate the middle class from their savings. It’s not enough that you helped build a banking system that nearly crashed a $15 trillion economy.
No none of this is enough. And when we pass an incredibly weak regulatory bill that does nothing to actually fix what caused the crisis you go and complain that the government is doing too much….
Then today REALLY SUCKED for Jamie when he lost the Debit Card Swipe Fee battle to the retailers despite INSANE LOBBYING and Jon Tester- D-MT, Bob Corker R-TN last minute attempt to stave off the changes for a year.
This is a Fed set cap on swipe fees. Lowering avg fee charged to RETAILERS from .44 a swipe to .12 a swipe. TBTF are babied left and right, the retailers are going out of business left and right let the Fed baby someone else for a change Jamie. I’m sure Obama will give you another bailout any second now anyway.
…The fee cut could cost the card industry and banks billions of dollars, but nobody in the retail business is shedding any tears — it will save them money.
Bank stocks, up earlier in the day, flipped into the red on the news and ended down nearly 1%, making them among the worst performers in the market today….
Market Movers Friday: Retail sales up 0.4%, futures still down sharply on Sovereign debt concerns, Euro drops to $1.24 vs USD, Gold pops $16 to $1245…
Markets not convinced by the 1T ponzi scheme wherein the FED and the EMU trade printed money back and forth across the pond and claim they have fixed the problem.
Great, short, spot on analysis yesterday from David Hefty of Cornerstone Wealth Management. He forecasts a DOW pop and then a collapse later this year to DOW 5,000. He cites all the concerns the street (and MiM!) are feeling. And of course there is a denial consumed Bull in the segment too:
Retail sales popped 0.4% in April after being up over 1% in March and they have a deluded retailer on saying the American consumer has recovered and she wants a new pair of Jimmy Choos. BWAAAAHAAAAAA!!!!!
AS -IF!!! Frakkin maroons! He is claiming people earning 75k up is CORE OF MALL BUSINESS and is fine with UE. He is INSANE! Bill Taubman COO. BWAAAHAAAA!!!!! Ahh man that was a good one!
He says HOUSING PRICES ARE STABLE!!!! BWAAAHAFRAKKINHAAAA!!! Ahh man they really slay me these people.
In other NO SHXT! news the WSJ reports the massive US bailout ‘missed Main St’:
Government funding to U.S. banks has done little to ease the credit crunch for small businesses—and the situation doesn’t seem to be improving, according to a new report.
The value of large banks’ loans to small businesses shrank 9% between 2008 and 2009, more than double the 4.1% drop for overall lending, said a report released Thursday by the Congressional Oversight Panel, a group set up to oversee funds allocated by the federal government’s Troubled Asset Relief Program.
“Big banks pulled back on everyone, but they pulled back harder on small businesses,” said Elizabeth Warren, chairwoman of the oversight panel, in a discussion with reporters.
…said that small-business lending values at the smallest banks fell by about 2.7%, compared with a 0.2% decline in their overall lending….
Update: 4/8: Retail sales came in higher than expected, and so did weekly jobless claims..Easter fell in March this year, and if I am any indicator, lots of folks spent a bit extra on Easter candy to brighten what has been a dark Spring economically…I still do not believe there is a consumer led recovery in the cards…we have no credit and no jobs, it is math even I can do…
Yeah that much vaunted ‘recovery of the consumer’, is a mirage IMO. There is no credit, there are no jobs, therefore there is no recovery in consumer spending on the horizon, period.
Ain’t nothin’ goin on but the rent…
CalculatedRisk brings us the data from the FED that CNBC and the WSJ ignored-
The Federal Reserve reports:
Consumer credit decreased at an annual rate of 5-1/2 percent in February 2010.
Revolving credit decreased at an annual rate of 13 percent, and nonrevolving credit decreased at an annual rate of 1-1/2 percent.
Consumer credit is off 4.0% over the last 12 months.
Consumer credit has declined for 12 of the last 13 months – and declined for 13 of the last 14 months and is now 5.2% below the peak in July 2008….
Steve IMO is smoking the CNBC Treasury Hopium. Rickster nails it, and Steve is arguing SEMANTICS!! Emergency UE, Extended EU, it is what it is Steve! over 3 million on extended EMERGENCY UE bens that don’t get reported on the top line UE data…..THE ECONOMY IS NOT ‘GOOD’ (note the REAL economy, not just markets), NOT RECOVERING, NOT PRODUCING JOBS, PERIOD.
Is Wall St using a Magic 8 Ball to forecast the recovery?
I have to ask since they keep repeating the meme that consumers will spend and all will be well despite the report last week that showed consumer borrowing fell $14.8 Billion in September, a drop that was WAAAAAAAAAY bigger than their vaunted forecasts. Banks are continuing to TIGHTEN CREDIT. The consumers have no money or credit to spend folks, the GDP growth is not organic and cannot be sustained
The markets are up on the weak US Dollar and the idea of an indefinitely loose Fed. I ask again, WHERE IS THE GROWTH GOING TO COME FROM? The consumer ALWAYS leads us out of recessions. I see absolutely nothing to suggest the consumer is ready to lead us again:
…The Federal Reserve said Friday that borrowing fell at an annual rate of $14.8 billion in September. That’s the biggest decline since July and was larger than the $10 billion drop economists expected.
Americans are borrowing less as they try to repair cracked nest eggs and replenish rainy day funds in a dismal jobs market. Many are finding it hard to get credit as banks, hit by the worst financial crisis in decades, have tightened lending standards.
Borrowing by consumers for revolving credit, including credit cards, fell at an annual rate of 13.3 percent in September, the same as August. This category has declined for a record 12 straight months.
Borrowing for non-revolving loans, including auto loans, dropped at an annual rate of 3.7 percent in September after edging up 0.1 percent in August. The August gain reflected the surge in car sales as consumers rushed to take advantage of the government’s Cash for Clunkers program….
Update 2: DOW off a cliff: down 230…El-Erian on economic outlook & Santelli & Liesman on the data; Market Mover Friday: Consumer Spending plunges – down 0.5%
Update 3: Closing Bell DOW down 251 to 9710, S&P closed under that 1040 level, losing 30 to close at 1036, NAS down 52 to 2045.
Update 3: 309pm EST: we just broke under 3.40 on the 10, 3.39 and the traders have an eye on the S&P at 1040 1042 is the closing level to watch (1035 now) DOW near the lows off 263. as of 200pm 456 of 500 S&P 500 stocks are lower..
Update 2: Dollar up, and in tandem as has been its habit DOW falling. Methinks peeps saw the consumer spending and got with MiM’s analysis of the GDP for themselves. WHAT IS THE DRIVER OF GROWTH GOING FORWARD?
None , zip, zilch, the big goose-egg. What sane capital would take a risk in this political environment? Not I. I would keep my head down I wouldn’t even want to make ‘too much profit’. Pfft. Nowhere to go but down after a 3.5% GDP yesterday, the govt cant print fast enough to maintain the velocity of money to hit that number in 4Q, and 1Q 10? Housing should be collapsing again under unemployment.
DOW was down 270 now down 228 to 9735, S&P down 26 to 1039 NAS down 47 to 2050. Peeps watching 10 yr yield at 3.40, if we break that, they say hold on…
Update: PIMCO’s El-Erian on economic outlook & Rick Santelli and Steve Liesman debate the spending and income data:
Breaking on CNBC
Rick Santelli has it:
WOW!!! Expectations were for consumer credit to drop 4 billion in July , it dropped 21.6 BILLION!! OMG! A record!
June REVISED to drop of $15.5 Billion!
Okay soopergeniuses in DC Elite land, how the hexx can consumers pull us out of this with no jobs and no credit? eh?
in other news, dollar fell to its lowest level in a year, 77.32 on the dollar index (.DXY) so oil spiked over 71 and gold pulled back a bit to 998 and change….
consumer is FLAT ON ITS BACK
Hey D.C.- STOP THE SPENDING!!!!