Bank CEOs: Nationalization ‘Doesn’t Work,’ ‘A Mistake,’ ‘Would Be A Nightmare’

[ProSense]

Bank CEOs: Nationalization ‘Doesn’t Work,’ ‘A Mistake,’ ‘Would Be A Nightmare’

In the last few days, the CEO’s of the nation’s three biggest banks — Bank of America, JP Morgan Chase and Citigroup — have come forth to pronounce that their banks are fine, profits are up, and whatever you do, please don’t nationalize:

Bank of America’s Ken Lewis: “The last thing we need to do is start nationalizing banks.” Full-scale nationalization “would be a nightmare.”

JP Morgan Chase’s Jamie Dimon: I don’t think any bank should be nationalized. It doesn’t work. It’s a mistake. Some need aid and help, but they should stay as private as possible.

Citigroup’s Vikram Pandit: I am most encouraged with the strength of our business so far in 2009…I am, like you, disappointed with our current stock price and the broad-based misperceptions about our company and its financial position.

It’s understandable that these CEOs are out making the case for the soundness and stability of their institutions. For months they’ve been watching their stocks sink, and hearing Nobel Prize winning economists say that their banks need to be taken over. Now, after a few days of rising stock prices, they are jumping at the chance to regain some credibility, quell investor fears, and save their jobs.

However, their optimism should not be taken as a sign that the banking system is fixed or that more action will not be necessary. The toxic assets clogging the banks are still just sitting there, and until those assets are dealt with, the banking system will not be made whole. As David Smick pointed out, when it comes to the banks “at least one thing is certain: Our present position is unsustainable“:

The longer we delay fixing the banks, the faster the economy deleverages, the more credit dries up, the further the stock market falls, the higher the ultimate bank bailout price tag for the American taxpayer, and the more we risk falling into a financial black hole from which escape could take decades.

Karen Shaw Petrou, managing partner of Federal Financial Analytics Inc., told Bloomberg that “skepticism lingers about the bankers’ forecasts.” “Whether they will be profitable remains to be seen because with the possible exception of Mr. Dimon, the others have been hugely wrong a lot,” she said. And until the banking system is cleared of its toxic assets, with the behemoth, too-big-to-fail institutions dismantled, it will not be fully functioning or in any shape to play a role in the economic recovery.

[Danger Mouse]

1. Are they saying this with the country's best interest in mind or their own?

[Lost-in-FL]

2. This country of course.

Why would you think differently?

[PurityOfEssence]

3. May we remind you of your current credibility?

One could fairly propose using the suggestions of the financial sector as reverse barometers for policy after they've had their way for almost three decades and failed miserably.

[Supersedeas]

28. plus salary and bonus options at stake

[Supersedeas]

29. plus salary and bonus options at stake

[dkofos]

4. That's CEO speak for "Oh SHIT, they know how to fix this mess".

[PBS Poll-435]

5. Krugman is a drama queen

IMHO.

[BlooInBloo]

8. That's "Nobel Prize winning" drama queen, to you.

[PBS Poll-435]

9. And Marisa Tomei won an Oscar

Shit happens.

[PurityOfEssence]

15. She's a great actor, and that performance was killer

It's actually a fine, minor triumph for a supporting character performance by an unknown in a more-or-less throwaway programmer like "My Cousin Vinny" to even be considered for an Oscar, much less to have that performance win.

The business generally scoffs at comedies altogether, considering them not "serious" or "significant", even though it's a harder act to pull off in most cases. Traditionally, only the Writers give comedy a fair shake.

Back to Ms. Tomei, though: she's used her surprise early fame to do things that really matter to her, rather than just to glomb onto stardom, and for that, she's to be commended.

What's the problem?

[TankLV]

22. Which proves you don't know shit...

[midnight]

6. I rather take my chances with Nationalizing the banks.

[BlooInBloo]

7. And of COURSE we would trust the opinion of the people who drove us into the ditch.

FUCK YOU!

[amandabeech]

10. Translation: WE WANT OUR BONUSSES BACK!!!!!

n/t

[amandabeech]

16. Make that "bonuses." Mea culpa, mea culpa, mea maxima culpa.

[depakid]

11. We nationalize banks damn near every Friday you lying POS's

[WinkyDink]

12. I see their minds have been been concentrated wonderfully.

[vaberella]

13. We're still nationalizing you guys. We already own half your asses. n/t

[Better Believe It]

14. With hundreds of billions of dollars in fed handouts how could they not make a "profit"???

[LiberalFighter]

17. Break them up like ATT. Regionalize the banks.

[moondust]

18. Cows: "Eat mor chikin"

[ejpoeta]

19. are these guys impartial?? I Mean... what happens in nationalization??

doesn't the people running the company get thrown out?? just wondering.

[olegramps]

20. Up until now I have been undecided about this.

But when these crooks came out against it then I knew that it had to be the right thing to do. I am all for nationalizing the homes and banking accounts of these Wall Street and banking crooks. Their mansions would make fine Charter Schools.

[Joe Chi Minh]

21. Bankers should each be given a million bucks (after their plunder has been

clawed back), and told to go and use it to bet at the race-track: "remittance men", as the "black sheep" packed off to one of the remoter colonies by rich, upper-class families, used to be called. But once it's gone, no more. They're on their own.

They are, in actual fact, remittance men, although with a sense of entitlement surely no remittance man, however arrogant, could ever felt. They have proved their professional incompetence beyond all peradventure.

[TankLV]

23. Translation: Don't "nationalize" our PROFITS or BONUSES or OUTRAGEOUS SALARIES,

just "take over" our MISTAKES, BAD DEBT, and RISKS...and that "take over" is NOT "nationalization" or "socialism" SO STOP SAYING THAT!!!

[PM Martin]

24. So then it is time to do so.

The government must intervene to clean up the "toxic" assets, sub-prime mortgages, CDS, Derivitaves, etc.
or else these banks will flounder soon enough.

[northernlights]

25. sounds like time to nationalize, to me

The more they try to convince it's the wrong thing to do, the more I'm convinced it's the right thing to do. The sooner, the better.

[Hellataz]

26. Hmmm, if the CEO's say it's bad...it must be the right thing to do.

They're only interested in their own bottom lines and nationalization means they wont have the freedom to line their pockets with all their ill gotten gains, they will be more closely watched and regulated. Of course they don't want the government to take away their power, but they are more than happy to take our money.

[Naturyl]

27. Serial Killers: Jail ‘Doesn’t Work,’ ‘A Mistake,’ ‘Would Be A Nightmare’

Toddlers With Hand in Cookie Jar: Time-Out ‘Doesn’t Work,’ ‘A Mistake,’ ‘Would Be A Nightmare’

Etc, etc...

[prolesunited]

30. Just like when monopolies argue for deregulation

If they say keeping the status quo is good, do the opposite. And like what they are doing isn't a nightmare. It certainly is haunting my life.