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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Rep. Capuano Scorches Big Bankers

3:18 P.M. UPDATE:

Rep. Michael Capuano (D-Mass.) evidently did not accept John Mack's apology, rendered earlier this afternoon.

Capuano waged a withering attack on the eight bankers arrayed before the House Financial Services committee right now. The eight bankers testifying now head the first big eight banks to take bailout money.

"You come here today on your bicycles after buying Girl Scout cookies and helping out Mother Teresa," Capuano winded up. "You're saying, 'We're sorry. We didn't mean it. We won't do it again. Trust us.' I have some people in my constituency who have robbed some of your banks and they say the same thing."

Capuano blamed the bankers for creating off-balance-sheet instruments that often allow companies to hide losses.

"I think they're illegal," he said. "I can't believe no one's prosecuted you on this. How can any regulated bank have something on it's books that's totally unregulated?" he asked, probably rhetorically.

"It's my hope you'll be answering those questions in court some day," he said.

Capuano concluded by saying that he doesn't have "one single penny" of his money in any of the banks run by the bankers before him.

Morgan Stanley Chief Apologizes On Behalf Of Entire Industry

1:49 P.M.: Morgan Stanley chief executive John Mack appears to have just apologized for the entire financial services sector at the House Financial Services hearing underway.

It may have been the mea culpa many were seeking from these bankers today. These men head the first eight large banks to get bailout money.

Rep. Gregory Meeks (D-N.Y.) asked the eight assembled bankers: "Do you feel you in the industry have anything to apologize to the American people for, because we didn't catch this?" Meeks asked, referring to the growing sub-prime and credit problems. "Anyone?"

Mack stepped forward and said: "It's a tough question. As an industry, clearly we made mistakes. Whether it was leverage -- at one point, we had 32-times leverage -- whether in loans we shouldn't have made, whether it was in some of the complex instruments.

"So, I think from Morgan Stanley's point of view, if you could play the clock over again, we'd definitely" do things differently. "We are sorry for it. I am especially sorry fro what's happened to shareholders" and more broadly, to all Americans, he said.

"Clearly, as an industry, we have accountability and we're taking responsibility," Mack said. "I'll take responsibility for my firm."

Evidently, the other seven big bankers believed Mack spoke sufficiently for the entire industry and remained silent.

Send Your Chase Credit Card Problems To Jamie Dimon

12:18 P.M.: If you've got a problem with your Chase credit card, send it personally to JP Morgan Chase chief executive Jamie Dimon and he'll deal with it.

At least, that's what he said moments ago at the House Financial services committee grilling of the first eight big bankers who took federal bailout money.

Questioned by lawmakers as to why some of the bankers were raising credit card rates, Citigroup's Vikram Pandit said his company did not raise rates for two years but was forced to last year, as the credit market dried up.

Dimon said his bank has raised rates on some customers but lowered them on others.

If his bank mistakenly raised rates on a customer, he wants to hear about it.

"If we did the wrong thing, send it to me," Dimon said. "Send them all to me and we'll deal with them one-by-one."

Dimon can be reached at:

Jamie Dimon
Chief executive, JP Morgan Chase & Co.
270 Park Avenue
New York, NY 10017-2070
If his e-mail follows the JP Morgan format, it would be either:
Jamie.L.Dimon@jpmorgan.com or
James.L.Dimon@jpmorgan.com

Big Bankers Call For Big Regulation

12:01 P.M. Two of the nation's most prominent bankers called moments ago for a new "super-regulator" that would oversee their banks and the larger financial system.

"We need to have a coordinated super-regulator for the financial services sector, and I do urge all of you to pursue that," said Morgan Stanley chief executive John Mack, pointing out that many of the regulations currently governing his sector were written right after the Great Depression.

Jamie Dimon, chief executive of JP Morgan Chase, said, "we have a Byzantine, alphabet-soup of regulators," adding that it would be of "tremendous benefit to have one regulator looking at anything that could cause systemic risk. It should be a U.S. system that is globally coordinated," he said.

Dimon said a more muscular Fed Reserve could be the sole regulator.

Rep. Waters Attacks Big Bankers

11:47 A.M.: Rep. Maxine Waters (D-Calif.) became the first to lay into the bankers.

"To the captains of the universe sitting here before all of us," Waters began, "all of my political life I have been in disagreement with the banking industry."

Waters asked how many of the bankers raised interest rates on their credit card holders after getting bailout money.

Bank of America chief executive Ken Lewis tried to open with a little levity, and was shot down by Waters: "I feel like a corporal of the universe," he said, before allowing that his bank raised interest rates on 9 percent of its customers in 2008.

Citigroup chief executive Vikram Pandit and Wells Fargo chief executive John Stumpf raised their hands in response to Waters's question.

Then, Waters went after the banks's overseas employees, asking Lewis if he has employees working in loss-mitigation working off-shore.

"If we have [loss-mitigation employees] offshore, I do not know about it," he said. Waters responded, "You do have them offshore."

Finally, Waters went after fees that she said the banks paid themselves for processing the bailout money.

"I don't know what you're talking about," Lewis said.

"Do any of you understand what I'm talking about?" she asked.

Pandit offered that what Waters was talking about was "underwriting fees" paid to a "number of underwriters," including Citigroup.

"You absolutely collect fees," Waters concluded, as her time ran out.

Rep. Bachus: Friend Of Big Bankers

11:20 A.M.: Rep. Spencer Bachus (R-Ala.), the committee's ranking member, just gave an "attaboy" to the bankers before him.

"You gave taxpayers an equity share in your businesses at depressed prices," Bachus said. "You kept millions of Americans in their homes. You [took over] failing institutions at the urging of regulators."

Will be curious to see how this plays.

Bankers To Congress: We're Lending Money You Gave Us

11:05 A.M.: The bankers have concluded their opening statements.

The closest any of the bankers has come to apologizing so far is Citigroup's Vikram Pandit, who said: "We understand the old model doesn't work. We did not adjust quickly enough to this new world. Let me be clear to the committee: I get the new reality."

-- Lloyd Blankfein, chief executive of Goldman Sachs, said: "While the firm produced a profit of $2.2 billion in 2008, our revenues were down considerably. Compensation across the firm, dictated by our policies and practices, reflected that. End of year bonuses were down on average 65 percent. Our most senior people -- the firm’s approximately 417 partners -- were down approximately 75 percent."

Goldman is considered by some the top bank on Wall Street, and is the alma mater to former Treasury Secretary Hank Paulson and Neel Kashkari, the man in charge of doling out the bailout.

-- Jamie Dimon, chief executive of JP Morgan Chase, said his bank is still lending and is modifying mortgages, even those that haven't yet failed. He said there are "significant deficiencies in the current regulatory system" overseeing banks.

Dimon is seen as a golden boy on Wall Street and as early as 2006 warned his bank to get out of the sub-prime market.

-- Bob Kelly, chief executive of Bank of New York Mellon, said his bank does not do retail banking, does not make mortgages or issue credit cards or make auto loans. "We are a bank for banks," he said.

-- Ken Lewis, chief executive of Bank of America, said his bank will make its first dividend payment to the Treasury next week of $400 million -- it's first repayment of bailout money. "We play a supporting role in the economy" now, Lewis said, "not a leading one."

Lewis is considered by some to be on the hot seat at B of A following its swallowing of troubled brokerage Merrill Lynch last year. It looks like Merrill was in much worse shape than Lewis though, leading to B of A having to digest -- with government money, it should be added -- billions more in debt than it expected. Also, Lewis clashed with former Merrill chief executive John Thain, whom Lewis recently fired.

-- Ron Logue, chief executive of State Street, said, "Following our commitment to participate in the [bailout], I set a goal with our Asset and Liability Committee to deploy this additional capacity by increasing our credit and liquidity facilities to our customers by $2 billion. Since mid-October, we have approved more than $1.5 billion of these new facilities, and, given our strong pipeline, we expect to reach the $2 billion goal soon."

-- John Mack, chief executive of Morgan Stanley, said his bank is not using bailout money to pay compensation. Mack said he's never received a cash bonus, getting his bonuses in Morgan Stanley stock only. He said the banks need "systemic" regulation.

-- Vikram Pandit, chief executive of CItigroup, said his bank will pay the government $3.4 billion in annual dividends and is working back toward profitability.

Among the eight, Pandit is on the hottest seat. His bank has received $45 billion so far in taxpayer money simply to stay in business. Here is Citigroup's report on how it has spent the money so far.

-- John Stumpf, president of Wells Fargo, "we're Americans first and bankers second." He said in the fourth quarter of 2008, his bank had double-digit loan growth in may areas, including student and agricultural loans. He said 93 out of 100 Wells Fargo mortgage customers are on-time on their payments.

Kanjorksi To Bankers: Pay Us Back. Now.

10:18 A.M.: Rep. Paul Kanjorski (D-Penn.) just got in the first jab of the hearing, noting that some of the bankers have said they didn't want to take the bailout money but were forced to by former Treasury Secretary Hank Paulson.

"If you got money you didn’t want," Kanjorksi said, "Please find a way to return that money to the Treasury before you leave town."

Rep. Maxine Waters (D-Calif.) promised to reveal today that the bankers used the bailout money to make more money for the banks.

-- Frank Ahrens
The Ticker is Twittering!

By Frank Ahrens  |  February 11, 2009; 12:18 PM ET
Categories:  The Ticker  | Tags: Goldman Sachs, Jamie Dimon, John Mack, John Stumpf, Maxine Waters, Paul Kanjorski, Vikram Pandit, bailout, bankers  
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Comments

If these damn banks don't need or want the money, MAKE THEM GIVE IT BACK and why is Obama and Tim G. so hot to give them MORE!!????

Let them run their business into the ground or succeed, let the market play out, use all their own slogans, cmon, why are you raping the middle class!???

Posted by: Impeachbush99 | February 11, 2009 10:56 AM | Report abuse

Members of Congress and the President have no shame. They are all a disgrace. They (including Bush) never should have given the bailout in the first place. The new so-called stimulus package should not be passed either. I see nothing put pork and giveaways to Obama supporters. Most of the states need to cut programs and this economy provides the perfect time (I say that as a Democrat)

I'd like an answer to these questions:

Exactly how much does the United States currently owe? To whom? At what cost?

Exactly which foreign nation/s will be borrowing from to pay for the new deficit? At what cost?

What is and what has been George Soros role in this financial mess? Especially around September 15th????

Which members of Congress have had TAX problems? For example, PAYING their taxes? List them!

Investigative journalists, be brave and do your jobs!

Geithner should resign. He's creepy, not inspiring and is a tax cheat. Obama's looks like a hypocrite keeping Geithner. Obama looks like a hypocrite keeping lobbyists on his staff.
It's unacceptable for this President and this Congress to add this massive debt to the current massive deficit.

I don't want this country I love to become a socialist nation. Europe's socialist models are failing worse than ours.

Capitalism made America great. Let's keep it!

The 24/7 doom and gloom reports in all media and by members of Congress and the President are making matters worse.The word choices of "catastrophic" (Obama) and Armegeddon (Sen. McCaskill who is an embarrassment to the Democratic party) are adding to the panic frenzy. Stop. We live in a consumer confidence driven economy and they are purposefully undermining consumer confidence to sell their not a stimulus package. It's disgraceful.

I am a very disappointed Democrat who supported Hillary Clinton. Obama is simply not up the task. His stuttering, bumbling manner has him off to a very poor start as President. Also, using the word "screwed" is not classy and most certainly not Presidential.

President Obama must rise to the office he now holds.

Posted by: TAH1 | February 11, 2009 11:16 AM | Report abuse

The members of Congress and Obama should spare us the phony outrage. They are all as corrupt as any CEO on Wall Street. They have all taken money from each other.

Money is the root of all evil.

Absolute power corrupts absolutely.

The U.S. Constitution should be change to mandate a divided government. Checks and balances are necessary to save the nation.

Posted by: TAH1 | February 11, 2009 11:18 AM | Report abuse

Most of the "taxpayers gift" to the big-banks was immediately converted into Treasuries and used to "back-stop" existing risky loans.....none of it went to new loans.

Posted by: anderson2 | February 11, 2009 11:33 AM | Report abuse

Those Wall Street bank execs are acting like shizophreniacs who blame the doctor for prescribing medications they continuously need. Actually, they are megalomaniacs who share the same symptoms as schizos and the feds should just quit bailing them out, so that they will die convulsing on the trading floor.

Posted by: TalkingHead1 | February 11, 2009 11:41 AM | Report abuse

We just closed all our accounts with BOA. BOA has withdrawn incentives to refinance and reneged on promises to its customers.

So Ken Lewis (or is it Ken Lay?) is again looking out only for Kenny Boy. Not his customers, investors and certainly not the taxpayers.

GET RID OF HIM

Posted by: jgwlaw | February 11, 2009 11:46 AM | Report abuse

This stimulus will never work towards helping middle class people who lost their jobs and can no longer afford their bills and pay their mortgage. Here is why:

An American who was laid off 6 months ago has seen his credit score go down the tubes. The mortgage becomes the bill that must be paid. Credit card payments are not paid on time, if at all. Now this stimulus makes the banks loosen credit. Well the banks will not issue credit to this particular person based on his/ her credit score that was good 6 months ago, but is terrible now. Even if this citizen finds a job soon, it will probably pay less than what he /she used to make and hence will not be credit worthy as far as the banks are concerned. There you have it, and I promise you that the banks know that. They will lend money to the ones who have good credit, ie: the ones who did not loose their jobs and hence really do not need credit in the first place.
This whole thing is a shame, a ponzi scheme. The banks should be ordered immediately to stop all foreclosure actions for six months to a year. They must re-issue mortgages that are low interest and payments must be reasonable for at least a year so families can afford to eat and look for work,ie: enough money for gas to look for work.This must be done regardless of credit score. The only way we will get out of this mess is to help people in trouble, and there are millions of them, who not only cannot support themselves but have also seen their IRA's and 401K disapear.
This ladies and Gents is why we will never recover from this perfect storm. It will continue. More Americans will loose their homes, and their jobs. More divorces to follow. More crime and tragedy as well as unrest is also a guarantee. This is all because taxpayers money is being spent on something else instead of helping the American people who are footing the bill in the first place. And by the way, how interesting that all those billions given out to wall street and the banks came from many American taxpayers who would not qualify for a loan due to their low credit score. Those hot shot bankers do not mind taking money from Americans with bad credit, do they?

We will not recover from this until the bailout is used to bailout American families. Since it is not being used for this purpose, we will end up with a country full of trailer parks and a few protected expensive houses. May God help us all.

Posted by: freedom01 | February 11, 2009 12:20 PM | Report abuse

None of these bozos, be they members of Congress or banking officials, seem to understand that jobs are the only way to fix our economy. Nobody is going to spend a dime they don't have to while jobs are on the line or hanging in the balance. Outsourcing is the real issue that led directly to the decline of the middle class, and most specifically, the loss of millions of computer programming jobs at the large corporations. The time has come to break up all of these large corporations into smaller, more specialized units and eliminate outsourcing. Here's to the demise of all corporations.

Posted by: Byrd3 | February 11, 2009 12:24 PM | Report abuse

Nice.

Rep. Henserling from Texas says he's concerned about protecting tax-payers in reference to bonus compensation -- he then twists himself over backwards to reassure the bankers that he'll feels their pain (e.g. referencing a Financial Times article).

His next line of question searches for a loop-hole so that CEOs can opt out of the banking program if they feel that limits on compensation require too much sacrifice.

He then points the finger at loan risks -- absolving these CEOs of responsibility.

Bankers must have that guy in their back pocket.

Posted by: JPRS | February 11, 2009 12:29 PM | Report abuse

We, the people, are the ones who don't get it.

The market went down yesterday so Wall Street could show the President who really is boss.

The Congress is hopelessly compromised. Barney Frank belongs to Wall Street.

Posted by: Withallduerespect | February 11, 2009 12:33 PM | Report abuse

Who had the last question before the break regarding the Bankers recent investments in their firms?

Most of the people answered "no".

Not exactly a vote of confidence in their business model.

Posted by: JPRS | February 11, 2009 12:33 PM | Report abuse

Withallduerespect,

The market goes down yesterday;

Barney Frank is in the "back pocket of Wall Street".

Where's the connecting thread in your reasoning?

That reminds me a bit of the South Park business venture.

Step One: Cut taxes.
Step Two:
Step Three: Profit!

There's a missing part in the equation.

Posted by: JPRS | February 11, 2009 12:36 PM | Report abuse

"If you got money you didn’t want," Kanjorksi said, "Please find a way to return that money to the Treasury before you leave town."

~~~~~~~~~

Civilized snark. I like that.

Posted by: cb11 | February 11, 2009 2:34 PM | Report abuse

Either NATIONALIZE the banks and get rid of these criminals, or take the TARP money back and close it down, and let them FAIL. I will guarantee you this: the world will not end, it will be better. These criminals, for the last 30 years, rigged the system so they can give each other $10 to 200 million dollar bonuses: read what the Merrill Lynch thieves stole last year...they eventually exploded like a tic who sucks too much blood...well let them die.

Posted by: castillomark | February 11, 2009 2:35 PM | Report abuse

How come Advanta CEO Dennis Alter (AKA Scumbag for credit card world) is not ON hot seat today? Advanta is charging 37% interest rate to its cardholders. They refuse to reinstate rate back to its original contractual interest rates between 7.99% to 11.99%.

They have no one answering phones from USA anymore. All phone calls are answered from India. Even for that, you have to wait 1-25 mintues. Just so many horror stories.

For more horror stories re ADVANTA, just google "ADVANTA SCUMBAG".

http://newyork.craigslist.org/mnh/vnn/1030592524.html

Posted by: AdvantaRipOff | February 11, 2009 3:41 PM | Report abuse

John Mack, if you really want to show us you're sorry, you'll kneel down in front of Barney Frank and open wide.

Posted by: sasquatchbigfoot | February 11, 2009 4:19 PM | Report abuse

The comments to this entry are closed.

 
 
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