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Sheila says goodbye to the ABA
I have gone both ways with Sheila Bair. I have criticized some of what she has done and applauded others. She gave a speech
to the America Bankers Association today. She summed things up pretty
well. Early on in the presentation she made this significant remark:
This may be my last opportunity to speak with you before the end of my term in June.
Read this to mean that she is out. This is a big job that
requires a transition period. A new FDIC head has to be named soon.
Given the politics of this position and the daggers being bandied about
in D.C. I think this has to come by 4/30. Just six weeks away. Should be interesting.
Given that this was her last opportunity to address all the big bankers
in one room it was a good time for Sheila to beat up on the audience:
I would like to propose to you a radical-sounding notion. And it is that increasing the size and profitability of the financial services industry is not – and should not be – the main goal of our national economic policy.
Apparently this woke the audience up. Guys were choking on their bagels. This must have also gotten the coffee cups rattling:
My
reading of recent polling data on how the public views banks also
speaks to the need for a different approach from your industry. In
April 2010, a Pew Research poll found that just 22 percent of respondents rated banks and other financial institutions as having “a positive effect on the way things are going in this country.”
This was lower than the ratings they gave to Congress, the federal government, big business, labor unions, and the entertainment industry.
She warned the banks:
What is important for you to recognize is that this type of reputation risk will eventually have implications for your bottom line and the confidence of your investors and customers.
All this is old news to Zero Hedge readers. But it's a pretty big deal when the outgoing head of the FDIC says it.
Notes:
(I) We have not seen the last of Ms. Bair. I don’t think she is a
presidential candidate, but she would make a good VP. Her name is on
this list. She might be our next Treasury Secretary. I’m "ABT" (anyone
but Tim). She could also run the Fed. Bernanke has erred with QE2. He
will take heat for the inflation that is brewing. It just might be that
he goes back to Princeton in a year. Her name is definitely on that list.
(II) I finally got around to dumping my accounts with the big banks. I
am now with a Community Bank. They do everything the big slobs do. They
don’t have branches on every corner. Who cares? Community Banks are now lending. The big guys are not. Their deposit rates are better. Plus you get to say “screw you” to a Morg, a Citi or a BoA.
»
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There is a picket fence above the grassy knoll in Dealey Plaza that is rebuilt every year. People leave messages for our late president on the back side of the fence facing the stockyard and rail cars. It is amazing to me that all of those places that I have read about in history books for years and years are still there and in use today. In fact, it is almost like nothing ever happened. Maybe that's been done on purpose.
One message on the fence, on the four-inch aspect of the two by four facing the railyard said, "Kennedy tried to kill the CIA, so the CIA killed Kennedy." Above it, on the two-by aspect, above the letters CIA, I was able to write, "The Federal Reserve," so the Fed killed Kennedy.
I actually wrote my message on the picket fence above the grassy knoll! Amazing. I know it will be burned in January but at least I got to put in my half-cent thought and I will appreciate that for all my days.
If you ever get a chance to go, you should do it. The tightness of the area, how small our world really is, will be put into more perspective. Ironically, it is even smaller than Dealy Plaza because it is clear to me from the set-up of the landscape and movies from that day that the driver shot Kennedy from inside the car.
___________
On the way into Dallas, there is a large billboard on the left side of the road that says: Forgive Them.
For some reason it struck me, probably incorrectly, that the sponsor of the message was talking about the perpetrators of that great crime committed there on a November day in the year of my birth. I was less than six weeks old at the time the world changed completely and irrevocably.
It got me to thinking whether it was indeed possible to forgive those involved, when they have never admitted their involvement, much less any wrong-doing in the matter. And that idea extrapolated into the people in my own life and whether I could forgive them for having wronged me without ever having admitted or even recognised their own mistakes. Maybe it even applies to me, too.
I have lived some twenty years in Texas but had never been to Dallas. Visiting Dealey Plaza was a goal I had set for myself before I kick, sort of like a bucket list-lite. I am very proud to say that I have been there.
But the truth of the matter is that I suffered a small stroke just after Christmas from atrial fibrillation caused by the stress of arguing with someone very important in my life. I am lucky to be alive. All of this at the ripe old age of 47!
Unfortnately, it seems they still just don't get it, don't understand the pain they have caused me and it seems they never will. It saddens me to no end for this to be the case. I have been heart-broken.
But what to do about it? Forgive Them, it said. The sign said to forgive them.
How is it possible to overlook their obstinance, their arrogance, their ignorance, their callousness? How would I be able to see past my own heart, literally, to forgive them for something they believe was nothing? I must find the answer to that question before I do anything else in my life. I know that now and the sign told me where to go. I have to go inside myself.
For I know that if I continue along this path, I will surely die of a broken heart. If I keep carrying that anger, it'll eat me up inside. So I'm trying to get down to the heart of the matter:
All the things I thought I knew, I'll have to learn again.
Because the flesh will get weak and the ashes will scatter, so I think it's about forgiveness.
Wish me luck finding the way to do that.
_____________
Hopefully, it won't take long but I have a feeling that to get my mind, my body and my soul right with the Universe, it is going to take a while.
Until then...
I can't thank ZeroHedge enough, especially the free thinkers on Bruce Krasting's posts whom I tend to think of as like-minded friends, in a strange sort of way. I have learned so much- more in two years here than six years in some ivory tower university- and I am forever grateful for that.
I'll be back when I can report successfully from the other side of peace and harmony. :D
Wish me luck!
Olexsandra
Orly,
What a beautiful bit of writing, and such a troubled ending.
You have commented a hundered times on my stuff. I always look forward to your words. Many others do as well.
I hired lots of young people who later become successful traders. I knew what to look for. I asked silly questions:
What is your favorite color?
Favorite food?
Do you like baseball?
The "correct" answer(s) Red! Pizza! No!
If you answer these:
"Red, sometimes green". "I like all kinds of food." "I am not a big fan of baseball but I like to watch golf on TV"
You fail my test. But if you answered:
"Gee, I'm not sure." I usually told the person that they should be looking for something else to do.
Then there is you. Both a poet and an fx trader. An enigma. But you gave me a view inside of you today. You got so upset at something that you had a stroke.
This proves to me that you are a poet. There is no room for emotionality in fx trading. You never look back. Ever. If you do, you should change your day job.
Your curse is your blessing. Often the case. But for your health you need to contain this. I know. I say to myself, "Don't sweat the small stuff". Then I try to convince myself that everything is "small".
Don't sweat the small stuff Orly. Texas, America, Zero Hedge and I need you.
I do wish you well. I am happy to know your name. I think of you as a friend. One I've never met and probably never will. But a friend none the less. Contact me anytime. I hope you get this message.
Bruce Krasting
bkrasting@gmail.com
HANGINGS
I am ready to HANG these mother fuckers from the nearest lamp post.
What do they not get about this?
What they have done - in Washington and Wall Street - is TREASONOUS!
TREASON!
I have the right - nay - the DUTY - to HANG THEM BY THE NECK UNTIL THEY ARE DEAD!
Personally, I like Obama. I think I'm gonna switch party's and vote straight Dem. At least that way, the end will come quicker and we can begin to recover and take back our constitution. With the Republicans, same outcome, just might take an extra year or two. Their just as fucked-up as the Dems except more "grown-up" about it.
The speech must have taken 4 hours with all of the applause interuptions.
When she concluded, do ya think she got a standing O, or 500 guys coughing "Blow me", "Bitch", and "Fuck you"?
i'm pretty sure profitable small and medium sized bankers wouldn't attend any lunch with this insidious Marxist crone as guest speaker.... Bair's tripled fees to profitable banks to increase her bailout funds
...if Krasting thinks she's so clever she deserves promotion he needs to answer what has the FDIC actually been good at while Bair has been at the helm? ....and why she's never come clean (ie. has maintained the lie) that the FDIC aren't already insolvent and cannot possibly fulfill its promise to guarantee bank deposits
The FDIC are totally bankrupt and would be shut down by the FDIC according to its own rules that's how fuking hypocritical this Govt quango already is. And its FDIC deposit guarantees are still out there on printed material lying every day to depositors their money is safe (is that not fraud?)
Bair is a sham and a fraud
Brucie 'baby' Krasting
What part of Shiela Bairs job do you think she's done well? So well according to you she deserves promotion to head Treasury and even the Fed?? Could you give a litle ol' cynic like me just one shred of her crony job she's done professionally/honourably/wisely???
You see this lying insidious crone is currently shafting profitable banks to help her bailout bankrupt ones by hiking her FDIC fees. That's called "socialism" Brucie Baby and have you ever in your life worked out if that works or not?
Socialism robs the fit to prop up the disabled. And guess what that makes? It disables the fit and makes them weak and turns the unfit into propped up zombies. It makes for a travesty of an industry which is precisely what Bair is doing, turning banking into a sack of Govt mangled shit.
So when Bair says she's not concerned with banks bottom lines that'll be because firstly the pinheaded public crone doesn't understand profit equals a strong banking sector able to weather the (just arriving at ramming speed) storm. It's also because what would Bair know about being fit and profitable when the sham quango she runs peddlimg a BIG whopper of a lie they guarantee despoits is already absolutely insolvent.
How can the FDIC (bankrupt) backed by the US Govt (bankrupt) guarantee anything Brucie? How come Bair hasn't had the honesty or integrity to face up to the fact she should be closing down the FDIC for the absolute sham it is. A job already done by liquidators and that the FDIC does no better.
You want this dishonest incompetent Obumma crone running an insolvent quango telling bankers not to be profitable to be PROMOTED?!!!
What f'ing planet are you on?????
Sbeila is leaving. That is a fact. Now you tell me, name her replacement.
You bitch and moan about every word I say. Fair enough. I can take it. But now you tell us what you would do. Give us your candidate:
I'll dutifully answer your question on what i'd do, but first just the little matter of you skipping answering my questions which as reminder were;
i. what has BS Bair done during her FDIC time that so impresses you she deserves promotion?
ii. why hasn't she come clean (ie. had a stitch of integrity or professional competence) and admitted the FDIC are writing checks their ass can't cash?
Namely why hasn't the slippery little snake Bair admitted the FDIC are totally insolvent and lying through their teeth they can guarantee depositors money??
To answer your question: SHUT THE FDIC DOWN. Simple eh?
Same as the best solution for everything Brucie Baby. Get the incompetent and usually corrupt clown show that is Govt out of the free market and making a bloody unholy mess of it as Govt always does. Let the free market work. Bceause it works a dozen times better than this Govt sham that is the FDIC.
PS. i don't attack your every article, just your Pro-regulation/regulator croney ass-licking articles of which you produce a few (too many)
PPS. regards your "i can handle it" comment i'd suggest you're not very aware of how badly your rubbish opinions are being ripped to shreds. Delusion of your ability is a virus common amongst Govt and its crones
She put a $25b bailout of FDIC together that did not include a cent of taxpayer money. Name another bailout that had this result.
You are wrong about the FDIC and those checks that are worthless. The FDIC has the Full Faith and Credit of the United States behind it. So the idea that they can't pay bills is the same as saying that Treasury bonds won't get paid. You're wrong on this one.
The FDIC guarantees 2.5 Trillion of deposits. All under $250k. This is not protection for big shots. It is protection for small savers and small business men. If it were not there the banking system would collapse. You might like that outcome. I don't see that it is necessary. But to suggest it would be "simple" just proves that you don't understand much.
Now answer my question. Who do you think should replace Sheila?
Also, could you point me to a country that you do like? Can you point me to a country that you do like that does not have some form of deposit insurance for its citizens? You will be hard pressed to answer the latter I suspect.
agree Sheila did her duty to American people, unlike most other "public servants"
I sent in a principal reduction payment with my regular mort payment. WAMU applied the monies as like 7-9 months of mortgage payments. I caught it and made them apply the reduction to the principal balance. They are such fucking crooks. And what happened to them? They left WAMU on Friday night and went to work at Chase on Monday. Almost same everything? No mass layoffs or firings; essentially no penalties?
Bruce, super post. Yup, that is what I did. Had two banks and was so happy to tell Wells Fucko to you know what. They lie, cheat and try to charge you for anything and everthing. I hope noone on Zero Hedge deals with any of the squids. Every small bank now has a great web connection. You rarely ever have to go to the bank, with direct deposit, free bill pay and a debit card, (no credit cards please). And many of the smaller banks do not charge you for using your debit card, and yes they have money to loan.
Much better experience.
They always serve bagels at these kind of meetings. Whadaya think they serve, jelly filled donuts?
gh
Just had my Mortgage Co. (Bank United) deduct my Mortgage Payment twice this month. They now have two months payments. They have the access to the cash that was in my Bank Account and not myself. I wonder how many People they deducted their Morgage Payment twice for this Month.
I also wonder what would have happened if I did not have twice the amount of my Mortgage Payment in my account. What about the people that did not have enough in their Checking Account to pay their Mortgage twice. Plus, what would have happend if one of their withdraws did not go thru. Would you be in Forclosure, or have to pay late charges? What about all of the bounced checks because of their error?
You know the Banks are in trouble when they double deduct your Mortgage so they can get a few days float on YOUR Money.
At least I check my Bank account everyday on line and caught it the same day. Plus, I usually carry enough float for this kind of event. But, what about the people that wait for their statements. How long will they keep their money before it gets straightend out?
The financial sector and the big banks need to be ... Eviscerated.
To put in plainly.
Build a country, build a nation, build a community. Build something.
With that, the buck stops here.
They lost 157 US TSTBB (Too small to be Bailed Banks) in 2010, and are already on track to loose ~149 in 2011, at the present rate.
Banking crises ALWAYS snowball to a crecendo of bank closures .. this one is global ... i.e. this is going to the mother of all bank closure spikes.
A few years...
For me, eventually means about three years ago.
(d)
I will remember She La...
"This hole's too deep! Keep digging!":http://lhgeopoliticalsatire.blogspot.com/2011/01/this-holes-too-deep-kee...
I've always felt pretty good about her, since Geithner was quoted as saying "she is not a team player" right before his confirmation hearings on his appointment as Treasury Sec. She wasn't well liked by any of the three douchebags; Paulie, Timmy and Bernie. She recognized the problem back in 2006.
The FDIC was underfunded as a result of the ABA "Convincing" congress that the FDIC fund was over-funded with 45 billion in 1996. So none of the banks paid insurance into the fund for ten years, thanks to a thoroughly "convinced" congress.
She came up with an idea in 2008 that had an estimated cost of 40 Billion to bail out the sub-prime home owners. That would have killed off a shit load of outstanding bets against the CDOs. So of course Paulson told her no by saying "I'm making investments". She is or was a part of the GOP. She had a grip on this whole thing. She was trying to put a rule in place forcing the banks to unwind their derivatives to show liability risk in late 2008 . She was slapped down by the new fearsome threesome of Bernie, Larry, and Timmy in 2009. That's why they just never got around to funding the FDIC when she quickly ran out of money after a few bigger ones like IndyMac. The list of troubled banks keeps growing but she is severely limited by lack of funds.The Bankers are Happy. Timmy is happy. Never mind that is the fund that insures individual accounts at banks. Talk about bad chemistry.
I'd love to see her as Treasury Secretary. Obama and the Bankers will never let that happen though.
''I'd love to see her as Treasury Secretary''
LMAO! Like there is a chance in hell that'll ever happen!!! If you're not from the inner circle (the 'Club'), you will never get appointed Treasury Secretary.
What club? The douchebag club?
Nice article, Bruce. And I especially liked the double-entendre of the title, where it can be interpreted as either Sheila is leaving, or the ABA is leaving. And perhaps both.
So an additional +1 on cleverness.
Well done, Bruce. I, too, am ambivalent about Sheila. No great insights or honesty, but she played a poor hand well. Sheila ran out of money..., twice. You can't close down bad banks with magic beans. The newbie will have the same problem cubed. Not a job I would want.
Wonder how long before Frontline interviews Sheila Bair just like they did with Brooksley Born. Oh, and Bruce, don't worry about those bankers. They weren't choking on their coffee and bagels. They were trying to hold back their laughter because they couldn't care less about Ms. Bair and what hard working Americans think of them. These pigs only care about record bonuses.
What a great picture.
It's Dos Zap.
Speaking of pigs Leo, you must have been happy as a pig in slop with the move up in solars yesterday. I take back my insulting your solar play many moons ago... you may be right after all. lol
Yeah, whatever, momos chasing solars! I was in these stocks at below $5 and holding onto them. But their beta is off the chart....last week down 30% when Italy cut subsidies (who cares?) and this week up 20% on Japan's disaster. Very, very volatile sector which is why most people get burned playing solars.
Will (s)olar shares fill the carry? Or (d)olars? Or oil? Or......
This is the same Shelia Bair that continues to allow insolvent banks to operate even though Prompt Corrective Action is the law?
Meh.
Wake me up when somebody in the executive branch starts bothering to enforce the already extant laws that would have put a stop to a whole bunch of this crap.
I rather doubt that Bair was brought in to fix the system at the time of her hire. By then it was too late.
I wholeheartedly agree with the gist of your post.
A solution or a problem is not going to help as they scrape the last meat off the bones of the taxpayer. You can see the margin calls coming as the cannibals seek food from the remaining capital in places the Consumer with decentralization in mind wishes to be.
Great Job and Story Bruce.. even if you are a censorship queen.
I'll also give a thumbs up to this story Krasting. Even a blind squirrel finds an acorn every so often.
However, I'll keep watching for your nonsense about Social Security. Consider yourself on notice.
This blind squirrel has been dead on regarding SS. But you read me. So you know that.
I don't quite get the animosity to BK. I find that BK is very high on my list of "always read" even though I might not agree with all.
I haven't the time to dig up the valuable information that BK gives to me for my time of reading.
It seems that the writer is a pretty regular guy that has good questions on how much of this racket is run. It is my luck that he bothers to put it on a free site.
Thanks for the heads up.
I too have been following Shelia for a while.
She has not always sung the tune she now sings.
Knowledge really is the fruit that poisons the mind.
As per usual, Roger Waters said it best when he lamented that:
"how can you eat your meat when you haven't eaten your pudding?"
Bravo Shelia, way to take another brick out of the wall.
i beleive it was...." how can you have any pudding, if you dont eat your meat..? "
If she is not Jewish she can not replace B.S. Bernanke as Chairman of the Federal Reserve...Plus you have to be a complete and utter stooge for them and posses multiple degrees from a captured University in Keynesian Wichcraft and Voodo economics.
She is Jewish. They all are, and yes that has to be said until one percent of the population has less of a strangle hold on the other 99%.
You mean, those located in MoneyGrubLand in the province of Austeria, Austria?
Aaaaah! These Universities...so there is no misunderstanding, hmmmm?
Good Grief...someone has to re-school the Republicans on free market capitalism... they are attacking the wrong entity:
http://www.marketwatch.com/story/gop-lashes-out-at-consumer-regulator-warren-2011-03-16?siteid=bigcharts&dist=bigcharts
why do fiscal conservatives also have to be anarchists...you can have small govt and still have a police force. if your police force is not run by govt/public, then the richest, most thuggish win.
Markets are not unlike city streets, the need to police, and to insure fairness, the police need to be under control of the whole public via democracy. Banks are the robbers and Warren is the police, of course they don't like have power.
Fucking with Elizabeth Warren now just showcases the lunatic asylum that is Washington. Just who the hell are the 22%? Anybody? Please, somebody raise their hand and say you're with the 22%.
The FIRE percent of GDP is about 20% and the criminals think they're doing a swell job stealing from the public.
Bruce - Bair is a maverick and as such she is hated in DC, especially in the Treasury Dept. She will never serve in government again. Her destination is oblivion. Elizabeth Warren is better liked than Bair in DC and Warren cannot get appointed to any post.
Bair got religion very late in her tenure at the FDIC. She presided over a period where community banks developed dangerous levels/concentrations of real-estate development loans. She didn't do much about it at the time. Her account of this lapse is that she fought internal resistence all along blah blah...When the final history of this crisis is written, I doubt she will fare much better than anyone else.
Very few within the Government had the guts to call "bullshit" on the credit boom. The late, great Ed Gramlich was perhaps the only one. Even Tom Hoenig was late. Sheila Bair was very late, her recent posturing notwithstanding.
I agree with you that all this QE was a mistake. But it prevented the immediate bankruptcy of a lot of the member banks of the ABA. She would've had better luck preaching abstinence at the Adult Video Award dinner. She is a dollar short and many days late.
"she was very late".
That is demonstrably incorrect. She was appointed in 2006 and started a desperate scramble to hire back retired regulators who had left in disgust. She was the one that sat in front of congress soon after the her appointment and told them they had to stop the nonsense of banks not paying their insurance into the FDIC that started in 1996.
She literally had to rebuild the agency from it's former shell as funding for operations were cut too. She was the only one who understood "The fierce urgency of Now".
She also came up with a low cost plan to deal with the sub-prime problem which Paulson rejected because he said he was "Making Investments" (Around Bear Sterns time) . We all know the real reason. Jp Morgue and Goldy had a shit load of CDS on the line. They needed those mortgages to fail.
Finally in late 2008, knowing the problem hadn't been touched she tried to put a rule in place to force the big banks to unwind their derivatives so investors and regulators could see the liability risk. That was slapped down too. She was on a uphill battle the whole five years. Frankly, it's a little depressing to hear about the only official in Govt who had a clue and a plan being disparaged regularly.
She is 54, so I doubt she has a raging desire to get back into public service. Maybe go back in her history so you'll see this wasn't a normal Bush Appointee before doing a Pauly/Pollie the parrot imitation.
"she was very late".
Oh my God. Pregnant again? At her age?