A cry for help, Frank to bankers: People hate you

[Slimprofits]

By VICTORIA MCGRANE | 2/4/09 8:28 AM EST

Rep. Barney Frank (D-Mass.) has this very blunt message for bankers:

“People really hate you, and they’re starting to hate us because we’re hanging out with you. And you have to help us deal with that.”

The financial institutions that need congressional help “need to avoid being stupid,” Frank told reporters Tuesday during a briefing on his agenda as chairman of the House Financial Services Committee.

That means being ready to swallow tough executive compensation restrictions and greater openness about how financial institutions are spending government money, Frank said.

Oh, and they need to not buy $50 million corporate jets if they’re getting taxpayer funding, either, he said. “They’ve got to lean over backwards not to offend people.”

*************

CYA time Barney can smell the pitchforks.

[D-Mack]

Re: A cry for help, Frank to bankers: People hate you

I've heard that the popularity of Nancy and Barney isn't the best either

[vanvaley1]

Re: A cry for help, Frank to bankers: People hate you

Poor Frank. Does he realize that the bankers don't give a damn if the public hates them? Just as long as they can carry on the way they have and weather this 'inconvenience', the Congress et al doesn't 'do' anything to seriously disrupt the system in place, and they will continue to be bailed out by the Fed/Treasury et al...the public's hate is a non-starter...as is this verbal spanking on TV.

[Master Shake]

Re: A cry for help, Frank to bankers: People hate you

I've heard that the popularity of Nancy and Barney isn't the best either

If the public saw Barney covering up for the crooks at Fannie and Freddie on TV (rather than on Youtube), they'd be hating him and his cronies a lot more.

[Slimprofits]

Re: A cry for help, Frank to bankers: People hate you

I've heard that the popularity of Nancy and Barney isn't the best either

My guess - the bank$ters view Barney as a replaceable pawn and doesn't get it.

Let's not forget where the vast majority of the money that funds his political career comes from.

[due_indigence]

Re: A cry for help, Frank to bankers: People hate you

Americans need to stage their own TARP. Stop paying your mortgage. They can't repo 106 million residences. Or if they do, they'll have to sell them back into the housing pool at $.05 on the dollar. Debt repudiation.

[Ghent12]

Re: A cry for help, Frank to bankers: People hate you

Americans need to stage their own TARP. Stop paying your mortgage. They can't repo 106 million residences. Or if they do, they'll have to sell them back into the housing pool at $.05 on the dollar. Debt repudiation.

Now THAT would be interesting. How would the FIRE economy handle a "strike" of this magnitude?

Of course, that would require political will and courage on a large scale. If I lose my house, I won't be able to watch American Idol!

[Slimprofits]

Re: A cry for help, Frank to bankers: People hate you

Now THAT would be interesting. How would the FIRE economy handle a "strike" of this magnitude?

Of course, that would require political will and courage on a large scale. If I lose my house, I won't be able to watch American Idol!

And it would require that people in the suburbs know their neighbors beyond the casual hello in the driveway. I've only lived in two states (MA and CA), but this usually not even close to the case. I hear it's different in the SouthEast, for example and would love to hear people from around the country chime in on this.

[due_indigence]

Re: A cry for help, Frank to bankers: People hate you

We'll pirate satellite TV from our tent cities.

Money is a fiction. Debt is a mirage. There are more vehicles and dwelling units than drivers and households, respectively in the US. By sheer accident (runaway greed), banker-led Ponzi capitalism has delivered us a surfeit of durable goods and fixtures. We're set for a few years. Let 'em wither away for awhile. Usury served us well through the age of exploration, mercantilism and the industrial revolution. Now all it does is start wars and create superfluous credit that feeds on itself. Job well done banksters! But sorry we can't follow you into the abyss with your CDS'. We don't even understand what they are. Neither do you apparently. That's because they weren't meant to be understood. They were meant to be sold.

[acric5]

Re: A cry for help, Frank to bankers: People hate you

these so called cries for help;" the poor me, look at me trying to help the little guy", are public spectacles that work at keeping the masses fooled.

This is standard practice for all good con men, it shows the ease at which a pathological lair and psychopathic personality can manipulate opinion. Anyone with morals would choke on this type of obvious ploy.

[due_indigence]

Re: A cry for help, Frank to bankers: People hate you

It's not all an ephemerality. There's a heckuva lot of bricks and mortar that happened too. They can't put 305 million Americans in debtors' prison. Paradoxcially, because their greed was SO huge, one salutary effect was the creation lots of stuff, too much stuff to repo. What are the logistics of warehousing half of America? Undone by greed!

What's the average age of our gleaming US housing stock? If the entire global derivatives complex is 12x the annual GDP of the planet, it is prima facie unsupportable. It's ludicrous, a laughable non-starter.

Try to look beyond the liens, mortgages and deeds of trust. That's THEIR language. PK Dick would call it the vocabulary of the Black Iron Prison. That's paper or worse, electrons. An Indian kid almost vaporized the Fannie database the other day. Paul Revere is from Bangalore! A day will come in the future when we will thank them for their rapacious greed. They built America with marble countertops.

[GRG55]

Re: A cry for help, Frank to bankers: People hate you

If the public saw Barney covering up for the crooks at Fannie and Freddie on TV (rather than on Youtube), they'd be hating him and his cronies a lot more.

An entertaining piece from Caroline Baum on this topic:

Just Imagine Blankfein Questioning Barney Frank

Feb. 12 (Bloomberg) -- The chief executive officers of Wall Street’s too-big-to-fail banks traipsed up to Capitol Hill yesterday to submit to questioning from Barney Frank and the House Financial Services Committee he heads.

It was the latest installment in a series of show trials featuring the likes of Major League baseball, the Detroit auto industry, Big Oil and Bad Tobacco.

Not that Congress is outside its jurisdiction in inquiring after the taxpayer money it has doled out. (If only lawmakers were as vigilant about the rest of their spending.) When our elected representatives are out for blood, a legitimate form of inquiry quickly degenerates into finger-pointing and grand- standing for the folks back home.

Yesterday’s hearing was relatively tame, as far as lynchings go. The eight Wall Street CEOs, including Citigroup Inc.’s Vikrim Pandit, JPMorgan Chase & Co.’s Jamie Dimon, and Bank of America Corp.’s Ken Lewis were questioned about their lending, or lack of it, since they received an injection of government capital under the Troubled Asset Relief Program.

They were scolded for spending the money unwisely. They were asked about salary, bonuses and “planes and perks” (a show of hands, please).

The bankers were appropriately contrite in admitting mistakes and sincere in their commitment to make amends. Pandit volunteered to take a salary of $1 and no bonus until Citigroup is profitable again.

The execs had to dance around some of the questions, such as one on raising credit-card rates, with prosecutor Maxine Waters, Democrat of California, cutting off the witness before he could explain how banks make a profit.

Reversal of Fortune
Just imagine if the tables were reversed. Frank and Waters are seated at the witness table instead of perched on the hearing room dais. The questioning would go something like this:

Chairman Frank, on July 14, 2008, you made the following pronouncements about Fannie Mae and Freddie Mac, the two huge government-sponsored enterprises that are the key players in mortgage finance:

“Fannie and Freddie are fundamentally sound.”

“They are not in danger of going under.”

“Looking at the financials, they’re solid.”

You followed that analysis with a forecast. Referring to legislation before your committee to allow the Treasury to lend to and buy unlimited shares in the GSEs, you said:

“We’re doing three separate things that make it much less likely -- very, very unlikely -- that we’ll have this kind of a housing crisis six months or a year from now.”

Less than two months later, Fannie and Freddie were wards of the state.

Just answer the questions, Mr. Chairman.

GSE Enabler
As the ranking member of the House Financial Services Committee -- before you became chairman in 2007 -- you consistently opposed stricter regulation of Fannie Mae and Freddie Mac. I would just note that you received $42,350 from Fannie’s and Freddie’s political action committees and employees from 1989 to 2008.

In 2004, you received a report from the GSE regulator showing that Fannie and Freddie had manipulated their earnings, enriching their senior executives in the process.

Yet you and your fellow committee members, primarily Democrats, looked the other way.

Even worse, you shot the messenger, Armando Falcon, director of the Office of Federal Housing Enterprise Oversight, who found accounting irregularities at both companies.

‘Innovation’ Lending
This is what you said to Falcon at a committee hearing:

“I don’t see anything in your report that raises safeness and soundness problems.”

Your distinguished colleague, Maxine Waters, was right there to back you up.

“We do not have a crisis at Freddie Mac, and particularly at Fannie Mae, under the outstanding leadership of Franklin Raines,” she said.

She went on.

“What we need to do today is to focus on the regulator, and this must be done in a manner so as not to impede their affordable housing mission.” That mission, as you noted, has seen “innovation flourish from desk-top underwriting to 100 percent loans.”

We all know how that worked out. Fannie had to restate earnings back to 2001, erasing $6.3 billion in previously reported profits.

Doing Penance
Former CEO Franklin Raines kept the lion’s share of the $91 million bounty he received for his six years of service at the company. (Raines had to cough up $24.7 million last year to settle a claim that he inflated earnings.)

Questioned by former congressman Chris Shays, Republican of Connecticut, about Fannie’s teensy 3 percent capital cushion, Raines said of the multi- and single-family loans the company holds: “These assets are so riskless that capital for holding them should be under 2 percent.”

Finally, Mr. Chairman, you used your influence as chairman of the House Financial Services Committee to secure $12 million for a troubled home-state bank under the TARP program. Treasury had stipulated that the banks be healthy.

It’s disingenuous to be critical of legislation you passed and a program you implemented when you’re the one bending the rules.

Mr. Chairman, we thank you for your candor in appearing before us today.

(Caroline Baum, author of “Just What I Said,” is a Bloomberg News columnist. The opinions expressed are her own.)