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Former Citi Boss: Reduce Leverage to 15 Times Assets, Put EVERYTHING Back on the Books, and Mark All Assets to Market EVERY DAY
It is - justifiably - big news that former Citi CEO Sandy Weill said that we should break up the big banks, and separate traditional depository banking from speculative investing. Indeed, even congress members are confronting top government officials on why they haven't done this.
But Weill said 3 other equally important things today.
First, Weill told CNBC that the financial crisis was largely caused by too much leverage, and that we should reduce leverage to between 12-15 times. (Background.)
Secondly, Weill said that we have to restore transparency, so that nothing is hidden off balance sheet. (Leading economist Anna Schwartz told the Wall Street journal in 2008: “The Fed … has gone about as if the problem is a shortage of liquidity. That is not the basic problem. The basic problem for the markets is that [uncertainty] that the balance sheets of financial firms are credible.”)
Third, Weill said that assets must be marked to market every day. (Background here and here.)
Mr. Weill's suggestions would go a long way toward fixing our broken financial system and giving us a shot at prospering once again.
Note:
We are obviously not defending Weill's horrific past actions, and he
failed to mention prosecuting fraud, which is perhaps the most important action we can take to help the economy recover. And we believe that bonuses and ill-gotten gains should be clawed back from every Wall Streeter who committed fraud.
However, we take our allies where we find them. And
on the points he raised today, Mr. Weill' is on the same side of the
fence as all of the top independent economists and financial experts.
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An offer is right.
This amounts to, "You know that I am a big swinging dick. I played the game and I won. I changed the world. And now that I finally can look at things from the perspective of a big swinging dick who's been out of the game for a few years, like Michael Jordan, I can see that I would have had even more wealth than I do if my hand-picked successor Chuck Prince and his successors hadn't screwed the pooch to such a degree that my Citi stock became worth mind bogglingly less than if we hadn't been allowed to take all the risks I urged be allowed to be taken." (Or maybe he sold or hedged it all; if so, good on him, but can't you go quietly into that good night?
What irks me is this offer and public senior statesmanship seems unaccompanied by any suggestion he will disgorge his own gains in penance for his own actions in bringing about the mess, either to reduce the deficit or to fund even more charitable endeavors (for which crumbs and larger pieces, however, I am grateful). (Let's remember that the Citigroup-Travelers merger was approved by the Fed notwithstanding Glass Steagall, as just the final push through the veil in consequence of decades of it being worn away under the guise of permissible regulatory expansion via "securities" activities.)
This all is an argument for return to a status quo - too much water under the bridge for that to work now. As others have noted, it seems likely he's hanging out there wanting to be part of the next solution, picking up pieces.
Here's an idea: anyone who benefitted from the systemic screwing given the U.S. of A. since -- I'd like to say 1913, but in the interest of practicality, let's pick a more recent date, say October 1987 when newly appointed Greenspan saved the markets from themselves (lol) -- should be banned from contributing any more wisdom to solving our problems.
Let the TBTFs fail on their own - don't protect from their own stupidity.
The bare faced truth is that deal time is almost over--- soon really soon the police who's pensions are now worthless because of currency manipulation and libor fraud will see the light and some will become vigilanty --and who will stop them?? the police?--- the military with the same pension concerns? These fraudsters will be in a world of hurt with no where to hide. Police/Military on the rampage can waste whole family tree with no remorse. ---just saying.
You might be right. Jamie Dimon is the protoge of Sandy Weill and they spent decades together. When I first saw this I suspected that it emanated from Dimon, perhaps because with his hedge operation dismantled he wanted others to be on a level playing field. But your analysis makes more sense. There are no real statistics that measure population anger and unrest, but it seems to be broader and deeper than is widely acknowledged.
Let us not be swayed by stale crumbs tossed at our feet.
Completely agree---stay focused on what these crooks have done for the last 3 decades--again more spin from the men in black as the men in white are building gallows in their minds.
The people of this planet have been stuck with all the dirty dishes and I for one am tired of KP.
"We must settle for no less than a total repudiation of ALL legislation and fascist drift post 1999. This is where the flip flop must begin."
you are a few years short me laddy..1913 the FED MONSTER was born.
\stockholm syndrome strikes agin!\,,,,
let's lift the banners of the 'symbionise liberation front' and all do a "patty hearst' whilst we run wit the beagle boys on a heist of our own savings n loan!...
pitiful. I guess cannibalism really does lead to mad cow syndrome!
Stop trying to be "kewl" and make your point.
see my suggestion above for dealing with yur distemper....
if that doesn't help, it may be rabies.
Or yu may yurself have indulged in 'cannibalism'...there is no known cure for mad cow, unfortunately....yu may need to be put down if symptoms reappear...there are worries in the medical community that it is spread by contact.
http://www.zerohedge.com/contributed/2012-07-25/former-citi-boss-reduce-...
Exactamundo.
The first thing to remember about fuckers is that they are consumed by jealousy and an inner sense of "missing out."
So expect alot more of these aging pond scum to come out from hiding and whine that the new kids on the block are making billions, nay, trillions gaming the system, when in their day things were "honest" and "just" and bullshit like that.
Remember it's been 30 if not 40 years since we've had honest capital markets.
The second thing to remember about fuckers is that they're gonna fuck something or somebody, no matter what no matter when. So whenever one of these fuckers comes around seeming all reasonable and everything, bear in mind at all times why we call them "fuckers" in the first place.
and had them for such a short time. and only relatively honest ones (measured against history and other countries, not perfection, joyful). it takes an enlightened citizenry (if only by bitter experience, the best teacher) and hard working, relatively honest regulators and courts.
apparently humans are doomed to learn the lessons of the end of the credit cycle about every third generation (forty to eighty years). it may have been better when depressions came about every forty years; memories were stronger and clearer. with the super long inflationary cycle 1932/42 until 1981/2, most of those personally knowledgeable about the '30's are now dead or very old (and the campaign contribution corruption/regulatory capture was such a powerful evil).
hypocritical pud knocker
Sounds very reasonable but would create some nasty surprises for the market, I believe.
Honest accounting? Is he for real?
How about a fair trial before we hang him?
Weill's a dirtbag. Claw back the billion he stole over the years. THEN hang the SOB.
My guess is he just found out from his doc that he has a year or less to live.
You make my point.
Misdirection?
Remember, this guy is the best closer of his generation.
Something is up.
George Washington promoting an idea from ssSssanford Weil
George the guy is a snake trying to rehabilitate his image and you went for it hook line and sinker
Of course. The system cannot be fixed by incrementalist measures. A new paradigm is required that deep sixes the banking CON eupehemistically called "Leverage". This type of loan WITHOUT collateral should never be allowed, PERIOD. The banker is ACTUALLY holding the SHORT END of the "lever" and the government is backing the scam by being the force that moves the long end of the lever up a great deal for every small move the banker makes. It is ASS BACKWARDS from an ACTUAL lever and fulcrum. Think about it. The concept of "LEVERAGE" is a totally false metaphor for physical leverage.
This is an excerpt from the article "View From the Catbird Seat".
Full article here:
http://www.doomsteaddiner.org/forum/index.php?topic=631.0
At least sandy said it
Ben and Tim and Obama et al haven't.
OK, I don't know 1 one thousandth of the stuff you all post here, but I am free to suspect this. A leopard doesn't change its spots. If Mr. Weill, an apparently ethically challenged individual, scored big with the merger of Traveler and Citi into a TBTF, then possibly he is reading the tea leaves of sentiment and saying, hmmmm what is the other side of that trade? Why, it's forcing one of the TBTF's to now be transparent, to come clean, to show it's books and thereby to force it into failure at which point Mr. Weill under the guise of some shell company comes in and scoops it up at a fraction of its former price. He is a schmuck. Never forget that.
and a slippery snake is just the kind of kompany that suits Georges' own schtick. But now it's time to beat them both with their own stick!
no sooner do I get my comment in on the latest GW PR piece than it disappears from the top banner and a newer apologia appears! With a bogus time stamp even! Tracking a trail of dead threads leads us to the 'death head' director of the disinfo kampaign of Operation GET THE BANKERS 2.0...and the hissing of forked tongues....
my riposte* to the tag team truth torturers Sandy&George:
"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.
*(with update-for this howler!)
"Mr. Weill's suggestions would go a long way toward fixing our broken financial system and giving us a shot at prospering once again."
Holy smokes, Batman, does it get any more blantant than this?!!?!?!?
George W...master of the false hope narrative.
Maybe you should try actually contributing something instead of simply finding fault in others.
Oh, and one can agree with the ideas and still think Weill is a scumbag and has a motive other than the goodness of his dark heart.
Anybody else notice how this guy's writing style is very similar to this guy? http://www.zerohedge.com/contributed/2012-07-25/former-citi-boss-reduce-...
And that he's got an axe to grind with GW, not just Weil, and seems to obfuscate with bile and "kewl" spellings?
And that he doesn't really spell out what exactly this "smokescreen" is hiding?
Hmm..
JOYFUL, you better get your shit together and make a cogent point, or I'm calling you out as a gover-corporate troll (and a piss-poor one at that) along with doc_in_the_house (check his incep date... Sock puppet much?).
While I'm always encouraged to see the more mentally challenged amongst us engage with the kommunity, the downside can be having to witness the torment of what may once have been a fine mind, no longer firing with a full set of synapses...
yu, chumly, can call me whatever yu wish, and like water off of a duck's back, I'll let it all slide into that big blackwater tank we use for the stuff to toxic to release back into the sea of ideas here.
suggestion box...when an idea exceeds yur level of komphrension, as an alternative to dragging yur witlessness into the public domain, make an effort to locate whatever brain cells are left to yu, and lubricate them in the warm bath of self-improvement and the humility appropriate to yur situation...with enough time and application, yu just might find a niche here as comedic relief as a Max Fischer sidekick.
Ad hominem attack makes me suspicious.
Maybe the Sandys of the world hear the sharpening of the guillotines. Maybe Weill is positioning himself for the train wreck.
But he of all people must know the damage mark-to-market would cause.
Are we past fail-safe and almost over target?
.
One would think he knows full well how "disruptive" it would be.
But can anyone seriously doubt that he absolutely knows it ain't gonna happen? Regardless of how sincerely or insincerely he seems to champion that cause.
But getting it out there for the public would once again shift the apparent blame for the next meltdown onto government, which is controlled by the political tools of all his real buddies who are, in fact, opposing just what he claims to support.
Games within games within games.
more policy/action recommendations, less ad hominem joyful. you seem more outraged about your post position having disappeared than the topics under discussion. throwing one's hands up at the impotence of all effort (save for striving for first comment) helps whom?
as a corrective against despair there is always jacques lisseyran: http://jessescrossroadscafe.blogspot.com/2012/07/jacques-lesseyran-poetr...
It is pleasing that yu wish to hold my own comments up to a higher standard than others...but in the interests of accuracy, would yu be good enuff to detail for us the mental gymnastics required to infer ad hominem attacks?
And, if it's not too much bother, to somehow lose track of those in fact cast rather looselyby the initiator of the exchange?!?!? That will be enlightening I'm certain.
*Just in case, altho I'm sure yu are judicious in the choice of words yu use and perspicacious in their meanings...."ad hominem is an attempt to negate the truth of a claim by pointing out a negative characteristic or belief of the person supporting it"
post position...a misunderstanding on yur part, willful or otherwise. I like to put my comments where they will be read...not on stale threads-a rather usual desire -I don't care where on a thread they go. Your imagination(or ambition to score a point) has gotten the better of yu Jeff. .
Finally, I have written a wealth of recommendations for both action and policy on this board, Yu have been free to discuss and evaluate their merits...but I believe this is more representative of yur style and standing.
I regard yur approach to critical method as both insincere and lacking in the same standards to which yu pretend to hold others accountable.... impotence is yur word - and, I think, finely tailored to fit the bearer bud!
"I like to put my comments where they will be read...not on stale threads-a rather usual desire"
So, you post to stroke your own ego ... I guess we did not see that coming, eh?
Anytime you actually want to contribute something of value, I will read it (if it is not on a stale post). But my guess is that I will be waiting a long time. Value and cutting down someone else to stroke your ego don't seem to be compatible.
...So, you post to stroke your own ego ... I guess we did not see that coming, eh?...
I'm fully prepared to believe that the motives yu would like to impute to me are what drive yu in yur own postings here..and I'm not in any way worried about yur concerns for value...the topic at hand has remained unanswered and unrefuted by yu and yur bedmates...and yur not fooling anybody by trying to redirect the spotlight elsewhere via attacking the messenger....an altogether falied rhetorical effort.
cutting someone down = whom are we referring to?
I suspect yu know all too well of what yu have addressed here...and I defer to yur superiority in all aspects of it. If you'd like to defend George or Sandy, by all means do so. Until then, yur just pissin in the wind.
was that earlier blackwater reference freudian?
I don't know, I don't hold much truck with Viennese psychoanalytics...but I do know an attempted psych-out when I see one and this will go down as a klassic...failure.
I've been waiting for a third batter[the first guy was more of a designated streaker than a player]to venture out before this thread goes stale, and yur pop up gets this game gone! George's Legion of disHonor falls down into the footprint of it's own folly!
In place of intellectual artillery from the opposition we get splatterd with cheesy rhetorical devices, reverse psychology gamesmanship, easy to spot strawman argumentation, and best of all, the limp-wristed resort to the vote counter-which on the battlefield of ideas is a waving of the white flag! Muchachos, if this is how you're expecting to survive the forthcoming times, yu haven't a hope! Pissy won't cut it.
And if that's all the help George can assemble from his rolodex, I'd say he's on the ropes...and guilty as accused...of course George could have assembled a defense of his own, but it's clear George don't do fight club...the privilege of buying a top banner spot.
Not one substantive refutation of the idea expressed, so it's time for a final run round the bases and head to the showers with the scoreboard showing a wipeout of the Washington Wailers....a collaborationist effort sponsored by the biggest names in the dissimulationist industry...but definitely not ready for the Majors\It's the end of the day in asia Minor\We out!
syllables are not the same as ideas
Indeed.
new rule for me--skip all "joyful" comments in the future!!
There's clearly some ongoing psyop/crowd control/conditioning activity here.
Its funny how awful they are at it, though. These assholes seem to think its the comments section of Yahoo Finance.
... and THAT, ladies and gentlemen, is how you do 'projection'!
I'm now pretty sure this clown is a new hire, or a recent transfer from some other psyop.
If this is their "A" team, they are pretty well fucked.
And THAT kids, is how you do irony.
Every person has until December 21st, 2012 to draw the line between good and evil and choose which side they will want to be on. Choose well, because every single person on the side of good will be wanting to bury every person that is on the side of evil. Oh, and there won't be any rules
That silliness doesn't sound anything like what actual Mayan Elders are saying about 12/21/12.
But then, that's probably not of interest to you.
COME ON GEORGE WASHINGTON!!!! YOU CANT BE THAT NAIVE!!! COULD IT BE COINCIDENCE THAT AS WE GET CLOSER TO THE END GAME, SCUM LIKE SANDY ARE TRYING TO BE REMEMBERED AS THE ONES WHO ADVOCATED FOR A JUST AND FAIR SYSTEM????? HE KNOWS HIS DAYS ARE NUMBERED, THAT THE MASSES WILL COME FOR HIM WITH PITCHFORKS IN THE NIGHT, AND HE IS PRAYING HIS HOLLOW COMMENTS WILL SOMEHOW WIPE THE SLATE CLEAN FOR HIM......ACTIONS SPEAK LOUDER THAN WORDS....AND IN THIS CASE HIS WORDS ARE HIS ACTIONS!!!!....PLEASE GEORGE, DO NOT GIVE THIS SNAKE ANY AIRTIME, FOR IF EVEN ONE PERSON WERE TO BE CONVINCED BY HIS SLITHERY WAYS, IT WOULD BE TOO MUCH......
He has to be that naive. He's a voter!
Weill's doing the exact same thing that Greenspin's been doing since his days as the trigger-man. It's called "sticking your dick in the mashed potatoes."
Go ahead GW, fill your plate up and tell me how it tastes.
For sure you will know what is right or wrong. The financial and political scumbags rear their ugly heads gives perfect examples of what side not to choose.
Idiot troll.