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The Banker Most Responsible for Allowing the Too Big to Fail Banks Says We Must Break Them Up

George Washington's picture




 

Every independent economist and financial expert says that failing to break up the giant banks is ruining the American economy.

Former Fed chairmen Greenspan and Volcker agree, as do presidents of various Federal Reserve banks and high-level Treasury officials, and the "central banks' central bank.

But now even the banker most responsible for the creation of the too big to fails - former Citi boss Sandy Weill, who lobbied vigorously for a repeal of the Glass-Steagall act separating real banking from financial gambling - has called for them to be broken up:

What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail ...

I’m suggesting that [the big banks] be broken up so that the taxpayer will never be at risk, the depositors won’t be at risk, the leverage of the banks will be something reasonable, and the investment banks can do trading, they’re not subject to a Volker rule, they can make some mistakes, but they’ll have everything that clears with each other every single night so they can be marked-to-market ...

This [too big to fail] system is really immobilizing the banking system:

All of a sudden, the powers-that-be are starting to challenge Tim Geithner for his defense of too big to fail banks.

For example, a reporter on CNBC asked Geithner about Weill's statement:

And as Business Insider notes:

Congressmen on The Hill questioning Tim Geithnerhad a new song to sing — 'let's take a look at Glass-Steagall', a law repealed during the Clinton Administration that separated investment banking from retail banking.

The crazy thing is, this song was coming from both sides of the aisle.

Representative Carolyn Maloney (D-NY) mentioned Weill's comment in her opening statement to Geithner and that got the ball rolling. She said that his words were "absolutely huge," and asked Geithner to write a report on how 2008 could have been prevented had Glass-Steagall been enacted at the time.

After that, member after member picked up the torch.

Representative Walter Jones (R-NC) said that he regretted two votes during his time as a Congressman — the Iraq War and repealing Glass-Steagall. "Isn't it time to have a discussion and debate about reinstating Glass-Steagall," he asked.

Michael Capuano (D-MA), a fiery member of this committee to be sure, said "funny how people who voted to repeal Glass-Steagall are now complaining that banks are too big."

Again on the Republican side, New Mexico's Steve Pearce started his questioning of Geithner by saying that he wanted to add his voice to Maloney's when it came to getting a report on how Glass-Steagall would've made things different in 2008. He then asked Geithner, "why should the people of New Mexico trust you or your policies?"

 

 

 

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Wed, 07/25/2012 - 23:50 | 2652007 monad
monad's picture

Weill's office holds a wood etching of him engraved with the words "The Shatterer of Glass–Steagall". wikipedia

mole

Wed, 07/25/2012 - 23:09 | 2651883 JOYFUL
JOYFUL's picture

Apparently this is going to be harder to convey effectively than I had thought...

ok, let's try something different...

"banks" are vehicles of the moneypower, they do not have any core significance outside of their utility as the means by which wealth can be transferred from the producers to the rentier klasses -

once enough stolen wealth has been siphoned off out of the system, the getaway cars will be abandoned, and cheered on by yur controlled-opposition ring-managers yu will be allowed to gather in groups to manifest yur useless anger by trashing these burnt out symbols of those who have buried yur hopes.

Somewhere, far away, they will be laughing.

Yu are being played. as usual.

Wed, 07/25/2012 - 22:47 | 2651840 Ranger4564
Ranger4564's picture

This is just a ploy to make it harder to pinpoint any institution as being culpable for the losses incurred / fraud perpretrated.  The small pieces will continue to benefit from the fraud, but we won't be allowed to harrass the small parts, it was the larger entity that committed the fraud, and that entity no longer exists.  I am not mesmerized by the shell game.  I see you, mother fucker.  Lying sack of shit.

Like everything else we're hearing, reinstated or not, Glass Steagall won't do enough or anything.  It will be neutered, present in name only.  Rules are not going to fix the corruption problem.  Pitchforks will.

 

Wed, 07/25/2012 - 20:44 | 2651526 Benjamin Glutton
Benjamin Glutton's picture

reason number 459(HB) why Sandy regrets repeal of Glass Steagall?

 

Was this Sandy's offer to the Senate in exchange for not auditing the Fed Res.?

Wed, 07/25/2012 - 21:46 | 2651705 AldousHuxley
AldousHuxley's picture

yes, let's listen to Sandy, Greedspan, and the rest of banksters....

 

and the let's jail them and strip them of their ill-gotten gains.

 

 

Wed, 07/25/2012 - 21:29 | 2651399 1Inthebeginning
1Inthebeginning's picture

Redacted

 

Wed, 07/25/2012 - 19:10 | 2651258 Careless Whisper
Careless Whisper's picture

Sandy Weill has always been ahead of the curve. Fact.

 

Wed, 07/25/2012 - 20:04 | 2651410 tankster
tankster's picture

Yeah, and now he's just talking his book! I'm sure he still has a pretty big slug of C and would LOVE to unload it at a "sum of the parts" number instead of where it languishes today, Fucking Asshole!

Wed, 07/25/2012 - 22:52 | 2651852 Careless Whisper
Careless Whisper's picture

He left the CEO position at Citi in 2003. Citi bought all his stock from him, $2 billion worth, at the market price. He donated $250 million to Cornell University for a medical school. The demise of Citi wasn't a result of them buying Travelers Insurance.

Wed, 07/25/2012 - 19:06 | 2651247 RacerX
RacerX's picture

Thank you Captain Hindsight!

http://www.youtube.com/watch?v=9rmUZQrvF5o

Wed, 07/25/2012 - 18:56 | 2651222 palmereldritch
palmereldritch's picture

Time to shut the con down.

The carcass has been picked clean and the villagers are rousing from their reverie, pitchforks in hand...the redoubts await!

Wed, 07/25/2012 - 18:49 | 2651210 XtraBullish
XtraBullish's picture

Bankers are bankers - U.S., British, Canadian...they all feed at the same trough and they all fuck you while making you think they are righteous. Separate the prop desks from the "real bankers" and watch where Jamie and Lloyd and Sandy all wind up - right back on the desk playing CAREFULLY with THEIR money while the real bankers lend to qualified borrowers and pray they get paid back.

They conned us all and we deserve the blame.

Wed, 07/25/2012 - 22:52 | 2651850 rayduh4life
rayduh4life's picture

Conned us all, Bullish?  WTF   Pffftttt.

Wed, 07/25/2012 - 18:36 | 2651175 working class dog
working class dog's picture

Now we have finally reached the point where one thief will break the time honored traditon of neve stealing from another thief, so now the scumbags will start eating their young.

Carlin said it correctly we get the sorry ass gubbament we deserve by not paying attention and stop expecting the gubbament to do everything, I dont thing most people who read zero hedge are sucking off the gubbament, or gaming the system,

or that a typical reader would not lend a hand to his fellow man if in need and he could do it without harm to himself or others. But the scum is rising to the surface of the boiling pot as the heat gets turned up. As ususual the culprits have already made off with the MADDOFF gubbment handouts, and are safely out of harms way, and the new team that comes in will have to clean up the toilets and change the carpets and clean out behind the refrigerator etc. (what a metaphor!)

On a lighter side remember what Erma Bombeck used to say

" Grass is greener on the other side of the septic tank!"

Wed, 07/25/2012 - 18:36 | 2651174 working class dog
working class dog's picture

Now we have finally reached the point where one thief will break the time honored traditon of neve stealing from another thief, so now the scumbags will start eating their young.

Carlin said it correctly we get the sorry ass gubbament we deserve by not paying attention and stop expecting the gubbament to do everything, I dont thing most people who read zero hedge are sucking off the gubbament, or gaming the system,

or that a typical reader would not lend a hand to his fellow man if in need and he could do it without harm to himself or others. But the scum is rising to the surface of the boiling pot as the heat gets turned up. As ususual the culprits have already made off with the MADDOFF gubbment handouts, and are safely out of harms way, and the new team that comes in will have to clean up the toilets and change the carpets and clean out behind the refrigerator etc. (what a metaphor!)

On a lighter side remember what Erma Bombeck used to say

" Grass is greener on the other side of the septic tank!"

Wed, 07/25/2012 - 18:36 | 2651173 working class dog
working class dog's picture

Now we have finally reached the point where one thief will break the time honored traditon of neve stealing from another thief, so now the scumbags will start eating their young.

Carlin said it correctly we get the sorry ass gubbament we deserve by not paying attention and stop expecting the gubbament to do everything, I dont thing most people who read zero hedge are sucking off the gubbament, or gaming the system,

or that a typical reader would not lend a hand to his fellow man if in need and he could do it without harm to himself or others. But the scum is rising to the surface of the boiling pot as the heat gets turned up. As ususual the culprits have already made off with the MADDOFF gubbment handouts, and are safely out of harms way, and the new team that comes in will have to clean up the toilets and change the carpets and clean out behind the refrigerator etc. (what a metaphor!)

On a lighter side remember what Erma Bombeck used to say

" Grass is greener on the other side of the septic tank!"

Wed, 07/25/2012 - 21:02 | 2651584 disabledvet
disabledvet's picture

nice triple post! this article...as with the article that appeared (albeit briefly) in the regular TD Zone is so historically inaccurate as to PROVE INGNORANCE of the total corruption of Washington DC at that time which resulted in the TOTAL bankruptcy of Wall Street that is today. LONG before there was Glass Steagall fellow ZH'ers THERE WAS CITIGROUP. This thing was a friggin' COLLOSSUS...Glass Steagall was only passed because as with Lincoln's unconstitutional invasion of the South that monstrosity needed to be made legal AFTER THE FACT. THIS WAS A MERGER BETWEEN ONE OF THE WORLD'S BIGGEST INSURANCE COMPANIES (Travellers) and Citibank. When it happened...in TYPICAL New York City "STICK IT WHERE THE SUN DON'T SHINE RETARDED HUMAN RACE PHUCK HEADS!"...these clowns really did think they had all the answers (for themselves of course.) Turned out....THEY DIDN'T KNOW A PHUCKING GOD DAMN THING NOR DO THEY NOW. And now...courtesy of Sandy Weill...WE ALL KNOW IT TOO. HEE PHUCKING HAW! Now should the euro-debt paper be nothing more than Erie Canal bonds as i have surmised oh these many years...this isn't going to stop the banks from being able to lend to say...McDonalds or Boeing folks. BUT GOOD LUCK HIRING A COP OR A FIREMAN! I would give EVERYTHING I'VE GOT if a SINGLE Governor in this fine "United States" were to SPEAK HIS OR HER MIND FOR THE FIRST TIME IN THEIR LIVES ON THIS CRAP. But instead...i guess i'll just have to just dream it as with all the rest of us sheeple.http://www.youtube.com/watch?v=HcrSn2uUAyA

Wed, 07/25/2012 - 17:47 | 2650974 BotMightFly
BotMightFly's picture

   What needs to be broken up is the American Bar Assocation hold on the court system.  This guild blocks people from being represented which is a denial of both free speech and due process. 

    Further, the ABA has criminalized legal representation except for - you guessed it - banks by state law.  Federal judges protecting the bottom line of their bretheren, enforce state law where it has no place in a federal court.  

    Law should be taught in high school for all four years; it is not as most come out ignorant as rocks about it.  Easy prey for the educated. 

   Ignorant typically herd like cattle; individuals who know what's going on can stand up for themselves.

Wed, 07/25/2012 - 17:36 | 2650962 falak pema
falak pema's picture

Whats in a name? 

A legend by any other name would taste just as fake! Like a badly made cake where the icing tastes like silicone from his ...well u know what I mean. 

Wed, 07/25/2012 - 17:39 | 2650945 Widowmaker
Widowmaker's picture

Weill has done what no one in his industry has done to date - shown a profound perception of the obvious.  

This is a culpability play, setting up the pieces.

Wed, 07/25/2012 - 17:12 | 2650862 Thamesford
Thamesford's picture

Fast fwd to 2027...

 

"Yes, we really needed to stop the Central Banks" - Ben Bernanke

 

 

Wed, 07/25/2012 - 17:05 | 2650833 Anthony Migchels
Anthony Migchels's picture

why are we paying attention to this bloodsucker?

Wed, 07/25/2012 - 17:01 | 2650811 BrokeTheInterweb
BrokeTheInterweb's picture

The world IS different now, in large part because of the growth-happy regulation repeal that even Clinton supported in '99. Greece has already shown us, in no time at all, where retail-banking will ultimately take us. I get a warm, fuzzy feeling whenever I see a huge benefactor of Glass-Steagall's repeal admitting it was the wrong course of action for everyone. We were drunk on a growth pattern that always, always ends, and the American taxpayers were put at extreme risk when the banks were given the go-ahead to gamble with their savings. How many years until we forget this lesson and do it again?

Wed, 07/25/2012 - 19:46 | 2651373 Diet Coke and F...
Diet Coke and Floozies's picture

Can't forget what you did not learn, bitchez.

Wed, 07/25/2012 - 16:59 | 2650797 TPTB_r_TBTF
TPTB_r_TBTF's picture

Any banker rats who jump ship should be given the advantage of dangling from a nylon rope instead of hemp.  The nylon rope wouldnT scratch these snitch's necks so much, as a small reward for their last-minute "honesty".

Wed, 07/25/2012 - 16:59 | 2650795 Bicycle Repairman
Bicycle Repairman's picture

Sandy's idea is brilliant.  Let's run Sandy up a lamppost and see if anyone salutes.

Wed, 07/25/2012 - 20:45 | 2651536 new game
new game's picture

suddenly this sock cucker gives a smidt about us and you; hmmm. 

yea after umteen million stashed at cayman from playin from inside.

the simple fact i have to be informed he even said this make me disgustedly sick and tired of it f'y all.  this is just about enuf for me.

back to my room and repent for all i just wished...

Wed, 07/25/2012 - 16:55 | 2650784 Winston Smith 2009
Winston Smith 2009's picture

"the banker most responsible for the creation of the too big to fails - former Citi boss Sandy Weill, who lobbied vigorously for a repeal of the Glass-Steagall act separating real banking from financial gambling"

Neither of the CNBS idiots interviewing him apparently realized that this ass was the one primarily responsible for ending what he now advocates because neither of them asked, "What made you change your mind?" or made any mention of the change. 

I want to see this jerk say, "I was wrong" but he's probably too arrogant to admit that even to himself, let alone anyone else.

Wed, 07/25/2012 - 17:04 | 2650832 BrokeTheInterweb
BrokeTheInterweb's picture

They did ask him why he changed his mind. His response was that "times have changed." You should know by now that investment bankers never make mistakes!

Wed, 07/25/2012 - 16:08 | 2650589 Dingleberry
Dingleberry's picture

Looks like the money that can be has all been sucked out of the banking system. Time for a reset I guess.

Wed, 07/25/2012 - 16:04 | 2650576 Benjamin Glutton
Benjamin Glutton's picture

the only thing missing on the CNBC set was the Mission Accomplished banner.

 

http://upload.wikimedia.org/wikipedia/en/f/ff/Bush_mission_accomplished.jpg

Wed, 07/25/2012 - 16:01 | 2650564 realitybiter
realitybiter's picture

"Yeah, uh, no.  We are real sorry.  That whole Citibank strongarm to repeal Glass Steagall was a big mistake.  Therefore, I think we should just reset everything back to pre-1998....this includes all banker bonuses.  I would very happy to adjust my wealth exactly to the performance of Citibank stock (down 95%).  I am sure Bob Rubin would agree.  Franklin Raines, too.  Our delayed graft to Bill Clinton, via speech payments, should also be clawed back.  Unfortunately, we cannot claw back Monica's reputation, although, I must give her kudos (not cooties) for being such a great trooper.  Without her, I doubt we could have got Clinton to sign the repeal of GS.....you know...Bill - you have to sign this, otherwise the Senate will impeach you.......

 

Wed, 07/25/2012 - 15:39 | 2650477 LMAOLORI
LMAOLORI's picture

 


"This is like when Lord Evelyn condescends himself to an interview with the Money Honey. Something big is in the works and Weill is the oligarch delivering the message today. This is likely part of the battle for the new payments system. But, Weill, post-Citi, isn't lobbying on behalf of the banks anymore. As you probably know, Weill is ex-AmEx, but he also now has links to MasterCard:"

in full

 

The Sandy Weill--Jamie Dimon War Continues

 

 

Wed, 07/25/2012 - 20:12 | 2651441 Benjamin Glutton
Benjamin Glutton's picture

excellent observation.

Wed, 07/25/2012 - 15:33 | 2650469 Lohn Jocke
Lohn Jocke's picture

Free markets have a tendancy of publicly bailing out private institutuions and creating artificial interest rates.

Wed, 07/25/2012 - 15:32 | 2650467 proLiberty
proLiberty's picture

We really must limit the size of institutions to the size that the ecnomy could absorb should the bank collapse.

One way to force this in an orderly way would be to have stricter reserve requirements in proportion tothe level of assets.   The size of banks would be self limiting.    

Wed, 07/25/2012 - 21:39 | 2651680 AmericanFUPAcabra
AmericanFUPAcabra's picture

Isn't that where banks claim they have X amount of mortgage payments coming in every month so they count that # as an asset, even tho less and less people are paying their mortgage. And next year some very special tax increases will make it so even more people will miss their payments. Speculation is speculation

Wed, 07/25/2012 - 15:26 | 2650440 paint it red ca...
paint it red call it hell's picture

I certainly would not think that any solution Weill has to offer is anything other than another step down the wrong road for the Constitutionalists.

Wed, 07/25/2012 - 15:25 | 2650437 Cardinal Fang
Cardinal Fang's picture

We need to break them up in order to merge them again.

Wed, 07/25/2012 - 15:25 | 2650427 Joseph Jones
Joseph Jones's picture

Yes, of course these banksters indeedly richly earned a beheading years ago.

What the heck would it take for some World Court to charge Bush and Obama with the war crimes of which they are most definitely guilty?  If Bushy and Obummer could at least be stuck in the USA (and our slave master Israel), being barred from visiting any other country or risk arrest and imprisonment I'd be quite happy (preferably in a prison typical in one of the Rendition countries they personally picked).

My early Christimas wish...

Wed, 07/25/2012 - 15:15 | 2650378 New American Re...
New American Revolution's picture

This is called "throw everyone under the bus in order to protect the enabler of it all i.e. Federal Reserve Bank."   The real answer is to close the FED, which will cause the breakup of the insolvent 2B2Fails.   Weill is placing the cart again in front of the horse in order to save their ass.

Wed, 07/25/2012 - 15:14 | 2650370 NoTTD
NoTTD's picture

TBTF, Bitchez!   Hey, this is fun!

Wed, 07/25/2012 - 15:07 | 2650327 TrustWho
TrustWho's picture

He made his fortune based on a false premise....so says Weil. What a criminal! He must have laughed at all the muppets and Becky must have given him a blow job before and after the show. 

Wed, 07/25/2012 - 15:21 | 2650412 mkhs
mkhs's picture

No, you only give the puppy the treat after it performs.

Wed, 07/25/2012 - 15:38 | 2650482 King_of_simpletons
King_of_simpletons's picture

A bit confused here. Who is giving whom a treat ?

Is it the insatiable desire to swallow or the horny desire for head ?

Wed, 07/25/2012 - 15:55 | 2650545 Pladizow
Pladizow's picture

Yes, and cancer says we must stop being cancerous!

Wed, 07/25/2012 - 15:03 | 2650307 Precious
Precious's picture

The only thing that needs breaking is a few of these sanctimonious heads.

Wed, 07/25/2012 - 20:54 | 2651563 philipat
philipat's picture

Geithner's response to Barofsky on Charlie Rose "These urban legends that I worked for GS are not rue". This would appear to be an irrelevant strawman and, in any case, let's see if this statement remains true next year?

Wed, 07/25/2012 - 22:35 | 2651776 engineertheeconomy
engineertheeconomy's picture

A friend told me that like totally dude there is going to be this huge party on December 21st, 2012!  He says EVERYONE EVERYWHERE IS INVITED. Apparently it will be going on all day long, 24 hrs, all over the world simutaneously, in every country and every city, every town, every village. We'll all be screaming and dancing and raising hell like there's no tomorrow. He say's there's no rules, so we can all be Anarchist's for the day! It's going to be one hell of a riot. It's called a Revolution. Kinda like 1776, but way, way better. We plan to do a lot of bad things to the bad people that have been enslaving us for hundreds of years. While we're at it, I think we might break a few windows  and light some stuff on fire, just for fun. BRING YOUR FRIENDS! And bring plenty of bricks. 

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