Saturday, December 24, 2011

Who Do You Trust?

In October the American Spectator asked: Who do you believe: "professional doomsayers" Meredith Whitney and Nouriel Roubini or the CEOs of Goldman Sachs, Bank of America, Citigroup, and JP Morgan -- Lloyd Blankfein, Brian Moynihan, Vikram Pandit, and Jamie Dimon.

First is Lloyd Blankfein, who testified before Congress in April 2010 at a hearing of the Senate Permanent Subcommittee on Investigations that Goldman Sachs had "no moral or legal obligation" to inform its clients it was betting against the products which they were buying from Goldman Sachs.

Senator Carl Levin told the veteran banker that he "wouldn't trust" Goldman as he repeatedly asked whether the bank would disclose its position "when they're buying something you solicit them to buy, and then you're taking a position against them?"
"I don't believe there is any obligation" to tell investors, Mr Blankfein responded. "I don't think we'd have to tell them, I don't think we'd even know ourselves."

Next is Brian Moynihan, whose Bank of America was caught in the robo-signing scandal and now wants to charge $5 a month debit card fee. Moynihan is helping inspire Americans to leave BofA and open accounts in credit unions.

Then there is Vikram Pandit, who recently said the sentiments of Occupy Wall Street are "completely understandable and that the "economic recovery is not what we all want it to be, there are a number of people in our country who cant achieve what they are capable of achieving and that's not a good place to be."

And finally, there is Jamie Dimon, who has been called "Obama's favorite banker" and served as Chairman of the Board of the New York Fed. Matt Taibbi writes: 2008, in that moonlighting capacity, he helped orchestrate a deal in which the Fed provided $29 billion in assistance to help his own bank, Chase, buy up the teetering investment firm Bear Stearns. You read that right: Jamie Dimon helped give himself a bailout. Who needs to worry about good government, when you are the government?
Dimon, incidentally, is another one of those bankers who’s complaining now about the unfair criticism. “Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it,” he recently said, at an investor’s conference.
Hmm. Is Dimon right? Do people hate him just because he’s rich and successful? That really would be unfair. Maybe we should ask the people of Jefferson County, Alabama, what they think.
That particular locality is now in bankruptcy proceedings primarily because Dimon’s bank, Chase, used middlemen to bribe local officials – literally bribe, with cash and watches and new suits – to sign on to a series of onerous interest-rate swap deals that vastly expanded the county’s debt burden.
Essentially, Jamie Dimon handed Birmingham, Alabama a Chase credit card and then bribed its local officials to run up a gigantic balance, leaving future residents and those residents’ children with the bill. As a result, the citizens of Jefferson County will now be making payments to Chase until the end of time.

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