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Financial Crisis Inquiry Commission Questioning

Posted by Larry Doyle on January 13, 2010 11:28 AM |

I did not expect to learn anything riveting from today’s Financial Crisis Inquiry Commission’s questioning of the Wall Street CEOs and I didn’t.  Why?

The executives being questioned represent the survivors or are new to the game. Who are they?

Lloyd Blankfein of Goldman Sachs
Jamie Dimon of JP Morgan
John Mack of Morgan Stanley
Brian Moynihan of Bank of America

The Commission will be at work during calendar 2010, but the initial performance will pack the biggest punch and get the most attention. Why? Simply because the media will provide the greatest coverage to the opening round.

These executives are not going to provide any smoking guns as they protect their own firms and their own interests. These interests are ongoing.

America will likely only learn what truly happened to cause this crisis by questioning the following individuals, and if need be issuing subpoenas to do so:

Chuck Prince, former CEO of Citigroup
Ken Lewis, former CEO of Bank of America
Stanley O’ Neal, former CEO of Merrill Lynch
Jimmy Cayne, former CEO of Bear Stearns
Dick Fuld, CEO of Lehman Bros.
Joe Cassano, former head of AIG Financial Products
Mary Schapiro, current SEC Chair and previously head of FINRA

My primary belief why the system failed is the fact that Wall Street was, and to a large extent still is, a self-regulated industry. I give credit to Commissioner Heather Murren for getting ‘warm’ in touching on this regulatory topic while questioning Lloyd Blankfein. How did Blankfein respond? He skirted the regulatory component of Murren’s question and talked about Goldman’s auditors. Opportunity lost.

John Mack came back to Murren’s point on regulation and touched upon how Morgan Stanley, now a bank holding company, is regulated by the Federal Reserve. Mack commended the Fed for its aggressive oversight of Morgan Stanley. Again, opportunity lost. Murren could have and should have taken Mack back to the 2004-2008 time frame and drilled him on the self-regulation of Wall Street. America does not need to know how things are now. America is demanding answers about the causes and issues that brought about the crisis.

The FCIC obviously deserves the time to fully explore all lines of questioning with any and all individuals.  The Commission may have been established by Congress but it answers to the American public. Unless and until I see the individuals highlighted above sweating under the bright lights, I am not optimistic America will ever get the answers it rightfully deserves.


Sense on Cents Related Commentary

The Financial Crisis Inquiry Commission Should Investigate . . . (January 11, 2010)

  • Fed Up

    I did not see the entire hearing but from what I saw of Angelides questioning of Blankfein it struck me as nothing more than a couple of ‘so called’ heavyweights doing some shadow boxing with a few light blows landed by both.

    Call it a sparring practice but headgear was used and if a sweat was broken it certainly wasn’t heavy.

    Why do I picture this as being much like the showboating put on by prizefighters before a match.

    The question remains whether we will ever see the real thing? Will the headgear and gloves ever come off?

  • kbdabear

    Looks like Turbo Tim is Timmy Tightlips until 2018

    SEC order helps maintain AIG bailout mystery

  • Larry Doyle

    Wow. Thanks for this link.

    How does this reconcile with the Sense on Cents recommendations for lines of questioning by the Financial Crisis Inquiry Commission?

    So much for the subpoena of Mary Schapiro on this topic.

    Why doesn’t the American public trust the government? Right here. Much as I said earlier today in writing about auditing the Fed, Bernanke and Geithner do not believe the American public can handle the truth.

  • Jim Sherman

    Watched most of the “testimony” from the “Bankers” and was hoping a commission member would ask about Finra etal as you’ve so well pointed out, but no, nada zelch. Whatever, are you emailing with intelligent questions? I was absolutely amazed that he gets his questions from th NYTimes, my God.
    Also please email me
    Thanks, Jim

  • Randy

    What we need now is a Ferdinand Pecora from the old days, who has the presence of mind, the sharpness of wit and the brashness of attitude to insist the tough questions be answered and be answered by the right people. Unfortunately, no such person is a part of this Commission and thus this will be little more than 300 days of dog and pony show resulting in a thousand page tome on Obama’s desk that will be filed away soon after. The entire crisis will be explained away as rational exuberance during a time of steady growth and strong economics. They will admit to having been a wee bit lax on regulation and say the bankers were a little overzealous in pursuing profits , with allbeing soon forgiven and swept under the proverbial rug.

    As banker turned trader I think in terms of probabilities and like Larry, I don’t give good odds on the real truth ever surfacing in time to be of any use.

  • Randy

    make that “irrational” exuberance .. typo

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