Kabuki on the Hill: Bank CEOs testify to ‘Financial Crisis Commission’ 9:00am EST
Update 3: 12:13pm: Angelides asking Blankfein what his responsibility was to the investor on those loans they securitized and sold, Blankfein is claiming they were sophisticated investors who sought that exposure. Basically, they deserved it? I dunno. Angelidies got an Agatha Christie analogy in, I always love those. He said maybe it is like Murder on the Orient Express and everyone did it, but still, how much responsibility is yours ….was your due diligence adequate? Blankfein trying to wiggle around it….good luck Lloyd…under oath, liability lawyers hanging on their chairs now….Phil says GS was doing more, they were also facilitating the market in which the products existed, Lloyd agrees to that extent they made that market…
Update 2: 10:07am: Phil Angelides questioning of Lloyd Blankfein was great. Lloyd keeps saying as a ;market-maker’ it is perfectly fine for GS to sell MBS derivatives to clients while simultaneously closing GS OWN position in those assets due to risk..Phil doesnt buy it.
BILL THOMAS! Vice Chair of the Commission just offered the American people his email if they want to submit a question to any of these CEOS!! Well I do!
email@example.com or some derivative thereof…send in your questions!
I really liked Moynihan’s opening statement, he is grateful to the American people, Blankfein needs to eat some of the humble pie Brian had before he arrived. (FD-MiM are BofA shareholders and are keenly interested in how Brian does today, his first big appearance since taking reins as BofA CEO)
Update 1: 9:07 am EST: WOW!! They put them under oath!! first time I have seen these bank CEOs be put under oath (except Ken Lewis on the BofA Merrill witchtrials)
CNBC should carry a livestream of the testimony here when it begins later today NOW LIVE (9:00 am EST, just began opening statements)
Michael Mayo, Calyon Securities Managing Director also to testify. He has been all over the banks but would not preview what he would be saying on CNBC this morning. The rest of it is kabuki IMO. Obama talked tuff to the press about fat cats’ and as Charlie Gasparino reported, went back to being their ‘selected one’ after the camera pool left…they picked him to run, ‘Signed, sealed, delivered, he’s theirs’:
…. A lovefest? Kind of like this, I imagine. It only gets worse.
Said one CEO who attended: “I expected to be taken to the woodshed, but the tone was quite the opposite.”
Said another senior exec with knowledge of the meeting: “The whole thing was so telegraphed that not much was accomplished, other than giving Obama a PR stunt . . . He might have sounded mean on ‘60 Minutes,’ but during the meeting he was a hell of a lot nicer.”
That’s downright ugly and I guarantee you it will get worse.
the banks just aren’t focused on lending — because it’s so easy to make money by trading: Borrow cheaply at the low, government-backed rates, and put that cash in higher-yielding bonds.
On Wall Street, it’s known as the “carry trade” — and the taxpayers are financing the vast profits from it, through all the ways listed above.
There are many reasons to hate Wall Street, even if you haven’t heard Goldman’s Blankfein quip that he’s doing “God’s work” when he trades bonds and earns all that bonus money.
But the ultimate culprit for the fact that these guys are raking it in while the rest of the nation suffers isn’t Blankfein or the Wall Streeters at yesterday’s meeting — it’s their enablers in government, including the man in the White House.
I think this is basically the banksters shot at rehabilitating their image to avoid a bonus tax. Obama will not hesitate to tax them to ‘soothe’ the populace he riled up with class warfare. As to doing anything meaningful to address housing, well that’s a whole nother bag of tricks. A big n-o. That was the big attraction of Obama over Hillary, she wanted HOLC in February of 08, he was always the Credit Suisse candidate…..
The chief executives of Wall Street’s biggest firms, swimming in bonuses but sinking fast in public esteem, will troop to Capitol Hill Wednesday to face questioning about the global financial crisis.With U.S. unemployment near a 26-year-high after the worst recession in decades, public fury is growing over the crisis, taxpayer bailouts and huge bonuses for bankers..
…The CEOs of both firms (JPMorgan Chase and Golden Slacks), and others, will testify at the first hearing of the Financial Crisis Inquiry Commission, created by Congress to examine the roots of the 2008 banking and capital markets debacle that shook the world.
The commission’s hearing could fuel popular resentment of the banks and at the government’s role in rescuing a powerful industry seen by many Americans as greedy and irresponsible.
The basic causes of the crisis are known. From a real estate bubble and subprime mortgages, to runaway securitization and exotic debt instruments, the financial system failed spectacularly in the final months of the Bush administration.
The 10-member commission, led by former California State Treasurer Phil Angelides, may be hard-pressed to unearth new revelations on that score, but its work is still expected to have an impact, according to analysts….