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Mum’s the Word

Posted by Larry Doyle on April 10, 2009 12:40 PM |

shhhhThe movie Goodfellas provides a wealth of material for comparative analysis of the markets. The “insider activity,” the “fooling around,” “the payoffs,” and “the gambling” all make for great drama on the screen. Truth be told, one does not have to look all that hard to find striking similarities to certain activities in the world of Wall Street, and for that matter, Washington.

One of my favorite scenes in the movie occurs after the boys make the big heist. Immediately, the word is put out to keep your mouths shut and no indications of newfound wealth.

Back to reality. In terms of “putting the fix” into the world of our major money center banks, isn’t the relaxation of the mark-to- market the “newfound wealth”? Isn’t the “keep your mouths shut” the equivalent of the Treasury telling the banks not to comment on results of the Bank Stress Test? Speaking of the Bank Stress Tests, Bloomberg reports:

The U.S. Federal Reserve has told Goldman Sachs Group Inc., Citigroup Inc. and other banks to keep mum on the results of “stress tests” that will gauge their ability to weather the recession, people familiar with the matter said.

The Fed wants to ensure that the report cards don’t leak during earnings conference calls scheduled for this month. Such a scenario might push stock prices lower for banks perceived as weak and interfere with the government’s plan to release the results in an orderly fashion later this month.

Clearly the Fed and Treasury are trying to keep their “boys” quiet and lay low while the real regulators of the market, that being honest investors, are walking the beat.

If any of the boys talk, then the leaders of the family won’t be able to coordinate the stories and hoodwink the public.

Whatever happened to, “as long as you tell the truth, you don’t have to worry about having a bad memory”?

It seems we are operating much more in the realm of, “well, I can tell you but . . . ”

The Goodfellas: Henry Hill, Jimmy Conway, Paul Cicero, and Tommy DeVito

The Goodfellas: Henry Hill, Jimmy Conway, Paul Cicero, and Tommy DeVito

Henry . . . Jimmy . . . Paulie . . . Tommy . . .

Please let me know who in our government and world of finance are most appropriate to play each of these individuals? Let’s have some fun.

  • fiscalliberal

    Do I remember it correctly that just before the need for bailouts, some of the banks reported they were solvent and had not troubles. Then they were to the government.

    So – if a bank is doing its own stress test, how can we have any confidence that they are telling the truth.

    The one GAO report intimated that often the management did not know how to evaluate a stress test.

  • Larry Doyle

    Have you ever known anybody who self-diagnosed to admit, “I got a problem.”

    The last thing anybody with a probem needs is an “enabler.”

    No confidence…!

  • TeakWoodKite

    If the message from the “firing” of the CEO of GM is to anyone else is if you talk you will walk. No one will be speaking truth who has their hand in the jar. BO set this marker up and the message has been recieved 5×5.

    I only wonder if the FDIC will play ball.

  • Thomas P May

    Goodbye America. While the wool was being pulled over our eyes, we magically find ourselves transformed into socialists. Didn’t this happen around 1940? History repeats itself. They already have our firearms registered in a database. Now, secret service thugs detain a man for posting an innocuous sign, (Abort Obama, not children) in his car window. Oh, first amendment where art thou? The administration is forcing TARP money on banks to get control. ” Whoever controls the banks, controls the world”. Again I say, history repeats itself-always! Please, wake up and smell the hobnails.

  • Thomas P May

    On another note; Why haven’t we seen the actual, adjusted figures on unemployment? In January they underestimated the number by a million. Imagine what the real numbers are going to be for April, much less May. With job loss on the up and max taxes on the horizon, do you think things are getting better or worse. No college required here. Goodbye middle class, it’s been swell. Gotta go, someone’s at the door. Who could it be at this hour?

  • Larry Doyle

    Thomas….thanks for the insights and historical perspective. Please visit and comment often!!

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