November 12, 2008
San Francisco I tried to get my lawyers on the phone all yesterday whenever there was a break in my meetings. I was missing out. I needed help. I wanted a “bank-over,” just like everyone else is getting.
The $700 billion dollar fund at Treasury to help “rescue” the financial industry has become the biggest honey pot in the land. When Secretary Paulson first called the boys from Citi, Wells, Bank America, and others into his office, the reports made the insert of billions of dollars into their bank accounts sound like a shotgun marriage. Yeah, right?
It turns out there in this new Wall Street socialism, there is government money and darned little accountability. Banks are not even required to make loans. Victims of subprime rip-offs and homeowners facing foreclosures are still hoping for a break, but everyone else has got the game figured out.
First you become a bank. It doesn’t really matter what you were before, you need to be a bank now so you can get to the teller’s window at Treasury and cash in for a couple of billion. First, Goldman Sachs and the remaining investment banks quickly became “banks.” Now our old friends at GMAC — the Cerberus owned operation that has a big piece of auto and owned a huge subprime itself — has announced that they are applying to become a bank. American Express is now applying to become a bank. In fact real banks are carping that these new “wannabe” banks are hoarding all of the money.
Treasury announced at the same time that they were going to stiff Sheila Bair at the FDIC because of her silly little plan to actually try to help millions of homeowners facing foreclosures, and instead where going to throw a small rope to a couple of hundred thousand homeowners that had convention mortgages with Freddie and Fannie, rather than those pesky situations with high priced, semi-fraudulent subprimes. I guess there feeling was that this was another way to help bailout Freddie and Fannie in the “new” socialism for banking and industry. Moral hazard is good for homeowners, just not for high priced banking CEOs.
And, where are you and I, brothers and sisters, asleep at the switch? Yes, so it seems. My lawyers warned me when I finally reached them that I may not qualify for a bank-over to reclassify myself.
It turns out that I still have small savings account at my local Whitney bank branch. I have too many assets to qualify they said. That’s a no-no. Unless you have already lost billions and ripped off millions, you just can’t be a bank anymore.