8 bank CEOs to appear before congressional committee this morning

radbag · Post by **radbag** » Wed Feb 11, 2009 12:00 pm

with regards to pricing of assets, gutierrez is asking what do the financial institutions need? how do we get the market price? what does the panel suggest we do to resolve this issue? directed at pandit

pandit answers..."do everything we can do to improve a 'frozen' market...valuation is difficult...mark-to-mark is a daily valuation...it's an extraordinarily difficult question...rather than price them today, why not take an approach such as what other countries are doing...put those assets aside, let losses accrue and submit a bill for reimbursement.

hmmm...never thought of that actually...would want to discuss pandits thought on a separate thread.

gutierrez now asking something and got interrupted by frank..lol

radbag · Post by **radbag** » Wed Feb 11, 2009 12:05 pm

royce asking what was the GSE's (government sponsored entities ie FHLB, FNMA, FHA, etc) role in this crisis?

stumpf answers - says the problems occured way before 2007...back in 2002/03, they saw LOTS of weird things occurring in the mortgage market...incentive type loans that wells fargo did not participate in it...did not follow their organizations objectives and strategies.

dimon says - 3 causes...housing bubble in total...securitization...bad underwriting most importantly...option ARMs to blame...countrywide, WAMU, etc...those involved in those mortgages which resulted in leveraging...this stuff was all known but no one predicted the outcome.

blankfein saying people/institutions outsourced their research on ratings agencies...rating agencies are also accountable

radbag · Post by **radbag** » Wed Feb 11, 2009 12:10 pm

velazquez (this should be interesting) has the mic...asks about passing legislation on eliminating foreclosures by allowing owners to go bankrupt...do you think this is viable.

all the members disagree and feel mortgages can be worked out...bankruptcies would be more problematic

velazquez asking why mergers are being pursued as opposed to lending money to small businesses...mergers would eliminate jobs...no one answered her...lol

radbag · Post by **radbag** » Wed Feb 11, 2009 12:15 pm

capito saying she knows of constituents who've had their interest rates raised on them after showing more than 14 years worth of good credit worthiness...why?

pandit - we did not raise rates on cards for 2 years...credit costs are up...credit is not flowing...we need it flowing...we needed to change rates to keep up with soaring costs.

dimon - show me all these people and i'll treat them all appropriately...i don't believe everything i hear

capito - are you too big to fail?

pandit - we're large...109 countries...we help american businesses across the world...in this environment, no one is spared...all assets are linked...we've reduced the size, we've reduced assets.

radbag · Post by **radbag** » Wed Feb 11, 2009 12:21 pm

watt - directing to lewis and stumpf ... if you were asked to take tarp, you ARE too big to fail...citing hugh mccoll (former BofA/NationsBank CEO)...didn't get the point though but it had to do with regulatory framework for larger banks...institutions as well...what is your assessment on that?

lewis - bigger companies have done 'better' than those who were not as diverse...size is not about size...it's about your role in the system...it does call for an overall supervision as a result

stumpf - it's not a matter of being small or large...it's about a firms strategy and execution.

watt - re: credit card risk - is the size of the stimulus sufficient?

waters (the chairwoman) asks that the panel respond in writing

radbag · Post by **radbag** » Wed Feb 11, 2009 12:25 pm

hensarling - still trying to absorb all the data on new legislation and programs for help...are you concerned at the loss of the talent of this program?

mack - not concerned about high level mgmt but am VERY concerned about those beneath him

hensarling - is there a legal impediment that would prevent you from paying us the money back?

dimon - there is a legal impediment because the contracts they signed for tarp require re-capitilization and he's in loan mode...not trying to take money out of the system.

stumpf - we are in the business of making loans...we want to loan and we want to loan to good borrowers

hansarling - if there is a borrower wanting money but can't pay it back, please don't loan

radbag · Post by **radbag** » Wed Feb 11, 2009 12:32 pm

ackerman from NY - voices of the real world are saying they can't get loans to pay their mortgage, can't get loans to pay for college...we look at you and all you have are words, words, words...you're not loaning and it's not reaching the street...we ask about the funds and your answer is it's none of my business...i don't believe that you're loaning.

dimon - everyone believes the gov't should ask and can't answer to why no one is answering the media...there's a huge amount of NON-BANK lending that has disappeared...we're still lending...countrywide is gone

ackerman - what did you do with the 25BLN you got

dimon - we loaned to interbank, we loaned to municipalities, we loaned to corporations, we helped fund our credit cards

ackerman - we want in writing from all of you what you've done w/the money...can you tell me how much of your own number that you've personally invested in your company?

blankfein - 0, nothing new
dimon - 12MM
kelly - 0
lewis - bought stock
pandit - 8.4MM
stumpf - 0, i'm all in

radbag · Post by **radbag** » Wed Feb 11, 2009 12:33 pm

they're breaking for lunch.

radbag · Post by **radbag** » Wed Feb 11, 2009 12:36 pm

gonna grab lunch myself.

i'm kinda dissappointed...thought there was gonna be more fireworks...somewhat civil.

i thought pandit was cool under pressure and did a great job of explaining what his organization is doing

dimon is great as usual

stumpf is advertising wells fargo

mack is avoiding the mic ... lol

blankfein wants to debate but keeps getting shutdown

lewis sounds either guarded or incredibly rehearsed in his answers so as to not trip himself up.

a1bion · Post by **a1bion** » Wed Feb 11, 2009 4:29 pm

I'm glad I had stuff to do today and couldn't watch these goofballs.

And if Blankfein wanted to debate, I would've just asked him, "Hey, smart dood, why don't we just close up our side of all your trades with AIG and let you take an immediate 20 billion dollar loss? Debate that, mofo." Bet he would've shut his piehole real quick.

radbag · Post by **radbag** » Wed Feb 11, 2009 5:20 pm

blankfein did get kinda stuttery when the name of AIG got brought up ...lol