Monday, December 14, 2009

What Jamie Dimon should have said... 

Barack Obama has found a formula for bashing business in to support his political agenda. He attacks and insults an industry in public, and then calls in the industry "leaders" to cajole and threaten them. It has been thus with the various segments of the health care industry, and so it is with the big banks. Not one day after denouncing bankers as "fat cats" he summoned them to the White House to push them to lend more money. Since bankers will make loans without prompting when they believe they will be repaid (and even, occasionally, when they suspect they will not be), Obama is presumably asking them to make loans that will not be profitable for the altruistic purpose of restarting the economy. Either that, or he wants voters to see that he is asking bankers to make loans that they would not otherwise make, which says something about Obama's estimation of the intelligence of the voters. Either way, it is hard to see how anybody smarter than a reporter would be fooled by such silliness.

Anyway, the occasion prompted an off-topic comment on one of our other posts that deserves reproduction here:

What Jamie Dimon might have said today:

With all due respect Mr President,

JP Morgan Chase didn't need TARP money, but it was forced on us.

When the government asked us to step up and take on a big risk to save Bear Stearns we did -- and quickly. I put my job on the line to make it happen.

When I personally went public a few years ago to say that the independent investment banks like Merrill Lynch, Lehman and Bear Stearns were getting over-extended and over-leveraged because of lax SEC oversight, the government ignored me.

Now we have a stalled recovery because your administration has frozen the private sector. A flawed stimulus, Energy and Healthcare and general concerns over federal profligacy have put the private sector on the sidelines. And you dragged me down here to tell me it's my fault?

Also, you sent a clear, unspoken message today that you'll put a big surtax on my bonus if I resist your putting in a new federal bank consumer protection agency -- why don't you just call this new agency ACORN and be done with it?

I spent years putting up with Sandy Weill. I already have my "fuck you" money. You may be President, but you aren't President for Life.

If bankers were as powerful and arrogant as President Obama claims they are, they would have said exactly that.


By Blogger Escort81, at Mon Dec 14, 06:14:00 PM:

President Obama is obviously drawing on his many years of experience as a credit analyst and his ability to evaluate collateral(he remembers his "Four Cs" of lending), and simply has an honest difference of professional opinion regarding the creditworthiness of certain potential borrowers.

Oh wait, maybe he doesn't have that experience.

Seriously, haven't we been down this path before -- that is, of credit being too easy? Or is there no longer any repayment difference whatsoever between debt (which is supposed to get paid back according to a schedule) and equity (which is risk capital, and can appreciate accordingly)?  

By Anonymous Anonymous, at Mon Dec 14, 08:53:00 PM:

JP Morgan Chase didn't need TARP money, but it was forced on us.

When the government asked us to step up and take on a big risk to save Bear Stearns we did -- and quickly. I put my job on the line to make it happen.

And which President was in office when those TARP was forced on JP Morgan? Or when Dimon altruistically *cough* stepped up to the plate to save Bear Stearns at 2 bucks a share when many s/h thought they'd be better off in Ch X1?  

By Anonymous Anonymous, at Mon Dec 14, 09:55:00 PM:

Do you sense a bit of panic in the Obama administration? B+, indeed.

After today's mini-show trial of the fat cat bankers, Obama is summoning all 60 Senate Democrats to the White House tomorrow to jawbone for passage of Healthcare. Holy separation of powers, Batman! Obama may have commanded tomorrow's summit, but all eyes in the room will be on Lieberman -- if he bothers to show up.

Then Obama's off to Copenhagen -- lord knows where this international food court food fight will be by Friday. The Third World is intent on upping the ante for its reparations -- much of which is already earmarked for local leader "hoes and blow." Obama's best outcome is for Copenhagen to blow up before he gets there. There's nothing he can announce on his arrival back from Copenhagen that won't make him look ridiculous and out of touch to most Americans, no matter how MSM tries to spin it.

Meanwhile, the Rasmussen poll is the best indicator of where Obama is at, as it emphasizes "strongly approve / strongly disapprove." This is because much of Obama's support in 2008 was soft. Obama had a mandate to "not be George Bush", not to bestride our narrow world like a Colossus.

Obama is at 42% "strongly disapprove" which doesn't seem to fit with his self-grading a "B+" . 42% "strongly disapprove" suggests that Obama has already lost the soft support of independents that made the difference in his 2008 election. Hence the panic in the Obama administration. After his return from Copenhagen, Obama could approach 50% "strongly disapprove."

Developing ....

"Just Because I'm Paranoid Doesn't Mean I'm Wrong"

ps. Healthcare includes a potential poison pill for Democrats, if it requires federal funding for abortions. Democrats can lose a lot of independent and Democratic Catholic voters over this single issue. With her recent comments, Barbara Boxer has shown that Democratic leadership are tone deaf on this issue. It's not a trivial point for moderate Church-going Catholics -- trust me on this. A candidate like Sarah Palin needs to find her way to something like 50% of the overall Catholic vote . "Federally funded abortion" gives her a "teachable moment" to introduce her values and perspective to a Catholic audience.  

By Anonymous Anonymous, at Mon Dec 14, 09:58:00 PM:

The commnent at 8:53pm means we're attracting a worse type of troll -- an indirect complement  

By Anonymous Blacque Jacques Shellacque, at Mon Dec 14, 10:46:00 PM:

Not one day after denouncing bankers as "fat cats" he summoned them to the White House to push them to lend more money.

Do bankers have the option to decline to attend?  

By Anonymous Jim Clay, at Tue Dec 15, 09:32:00 AM:

"Do bankers have the option to decline to attend?"

Legally? Of course. But not attending would... up their regulatory uncertainty, let's say.  

By Anonymous Anonymous, at Tue Dec 15, 09:47:00 AM:

Gee, I hope Mr. Obama being mean to bankers does not in any way reduce the number of payoffs, kickbacks, contributions, sweetheart deals, bribes and gifts to members of Congress, their families, friends and senior members of their staffs!  

By Blogger DEC, at Tue Dec 15, 01:32:00 PM:

This comment has been removed by the author.  

By Blogger DEC, at Tue Dec 15, 01:37:00 PM:

I talked to four homeless guys at a convenience store in a blue state this morning. They agreed on one point: "Obama is ruining the country" (their words, not mine). Not one of the four men will vote for Obama next time.

If a Democratic President can't keep the tired, the poor, and the huddled masses in his corner, he is in trouble politically.  

By Blogger PD Quig, at Wed Dec 16, 01:26:00 PM:

I imagine the real conversation went a little more along these lines:

Dimon: "Mr. President, your only hope is for us to extend and pretend until we can generate enough profits to paper over our phantom balance sheets. This is not easy as there are trillions of worth of derivative bombs to unexploded, massive non-performing CRE loans, and no source of profits for us other than our proprietary trading desks. Fortunately we can make money in either an up or down market, but you know we want to keep the market moving up to help you out, right?"

"I doubt we can actually pull it off--all it will take is for one spark to ignite the powder and the whole thing goes up--and if we don't, you can kiss off your second term."

Bankers are powerful and arrogant, but not stupid. They know that the next round of yo-yos will be greased just like this round and all of those before dating back to 1913. A few million into the campaign coffers used to buy a few hundred billion in easy money. Now it buys a few trillion.

They can outlast Obama. He is already bought and paid for, and he doesn't know sh*t about what it is that they really do for a living.  

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