Fed Failures, Banking BS, and What About Those Stress Tested Banks?
Summoned by the Fed, I've had nightmares about that but usually it's black helicopters and nondescript guys in suits dragging me away from my office with my hands tied behind my back. Who needs porn and who said Fedbashing isn't exciting? *cough* sorry...
The heads of the nation’s largest banks were summoned by Federal Reserve officials on Monday to discuss what is perhaps the most contentious issue of the post-bailout era: pay.
The meetings, held by the 12 regional Federal Reserve banks, mirrored the extraordinary gathering convened at the height of the financial crisis last autumn, when government officials sought to rescue the banking system from falling apart.
This time, amid signs that the markets are stabilizing, Fed officials told bankers that they needed to re-examine their compensation practices, which have become a political flashpoint in Washington and a widely cited cause of last year’s collapse.
In 20-minute sessions, Fed officials told bankers that they might need to fundamentally reform their pay practices as the agency moved forward with a comprehensive review of 28 large financial institutions. Fed officials imposed a Feb. 1 deadline for them to submit a written plan of any changes, but urged them to begin the overhaul now as they considered bonuses for 2009.
Flanked by their compensation committee chairmen, Vikram S. Pandit of Citigroup, Lloyd C. Blankfein of Goldman Sachs, Jamie Dimon of JPMorgan Chase and John J. Mack of Morgan Stanley passed through the familiar iron gates of the New York Fed building in Lower Manhattan. The chief executives were joined by the American heads of several foreign banks, including Barclays, Credit Suisse, Société Générale and Deutsche Bank.
Senior executives from Bank of America, Wells Fargo and roughly a dozen other large American banks were summoned for similar discussions with officials of the Federal Reserve banks in Richmond, San Francisco and other regional offices. Some talks were by phone.
The meetings were largely procedural, but packed with politics and symbolism, said six people briefed on the discussions.
Unless the Fed goons sat at the conference table with butcher knives in front of them as if to say "we'll cut you if you don't comply," I can't really buy this little pow-wow.
Sheila Bair is pissed off and that's kind of funny to me because she's got one of the shittiest jobs in the financial sector right now. I won't jerk her off, she can figure it out without my help, I have bigger and better things to do like save my company and be up Bernanke's ass off hours.
A top U.S. bank regulator struck out against the portions of the financial industry that are fighting reforms, saying they are using fear tactics.
Sheila Bair, chairman of the Federal Deposit Insurance Corp, said on Monday that some in the financial services sector are trying to argue that regulatory reform would stifle innovation and impede economic growth.
"That makes me angry," Bair said in a text of remarks prepared for a lecture at Kansas State University.
Bair said the extreme market interventions that have occurred during the recent financial crisis have been difficult for her as a life-long Republican and market advocate.
But she said they were necessary and that government needs even more tools to discourage financial firms from getting so large that taxpayers are forced to provide assistance if the firms become unstable.
"The government has been going into places where we don't want to be," Bair said, but she added: "We simply cannot afford to maintain the status quo."
Lawmakers are hammering out a major piece of legislation that would tackle fears that a few elite financial giants are "too big to fail."
The legislation would grant vast powers to a new systemic risk regulatory council, the Federal Reserve and the FDIC to monitor and address risks to economic stability posed by shaky financial holding companies.
It would also create a new consumer agency to police financial products -- a change that is desperately needed to protect the public, Bair said.
Skeptical CPA does "All Clear for Banks" on this and let's get into the 19 TBTF stress-tested "banks" that he refers to, shall we?
Regions is trying to give its money to broke municipalities. FAIL
SunTrust is a discriminatory lender but bleeding writedowns from everywhere. FAIL
GMAC.. don't get me started. FAIL
Fifth Third - 3rd quarter loss, burn. FAIL
American Express off loaded potential liabilities early on. WIN
BB&T assumed the deposits of Colonial Bank, that might end up to be a regret later on down the road, but they are libertarian and under Richmond Fed's thumb so I think that's a WIN.
Capital One is getting its ass kicked with defaults. FAIL
State Street is getting sued by the state of California. Big fat FAIL
Bank of NY Mellon... I got nothing. Ooops, doesn't look like they are doing too good. FAIL
US Bancorp just cleaned up on 9 failed banks in one day. WIN
PNC cleaned up on the carnage too and turned quite a profit. WIN
MetLife doesn't know how to hedge. FAIL
Morgan Stanley's Roanoke, VA branch manager killed himself a few weeks back (shh, MSM still hasn't picked it up and probably won't though plenty from Michigan to Virginia are still interested in the story) and may have some Galleon sins to confess. That might hurt. FAIL
Goldman Sachs SHUT THE FUCK UP I'm not even going there. Reluctant WIN
Bank of America is DOA and can't find a CEO. This will only get worse. FAIL
Wells Fargo can't figure out if it's Wachovia or not and tells you all about it from their blog. That's a neutral unless they start doing some serious loan mods, they don't want Team OMGObama breathing down their necks.
JP Morgan Chase is kicking everyone's asses, piling into December gold about to turn your little world on its head and their CEO is still sexy all these years later. WIN
As for Citigroup, I won't even waste a link on $C U Next Tuesday. FUCKING FAIL
Did I miss anyone? Out of 19, I count 11 FAILs, and Citigroup might count for 2. That doesn't look very good. (my math might be bad, I suck at numbers)