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Financial Titan Repudiates Geithner and Bernanke’s Entire Financial Strategy

Posted By admin On July 26, 2012 @ 2:12 am In Money Watch | Comments Disabled

Washington’s Blog [1]
July 26, 2012

It is – justifiably – big news [2] that former Citi CEO Sandy Weill said that we should break up the big banks [3], and separate traditional depository banking from speculative investing.  Indeed, even congress members are confronting top government officials [4] on why they haven’t done this.

But Weill said 3 other equally important things today.

First, Weill told [5] CNBC that the financial crisis was largely caused by too much leverage, and that we should reduce leverage to between 12-15 times. (Background [6].)

Secondly, Weill said that we have to restore transparency, so that nothing is hidden off balance sheet.  (Leading economist Anna Schwartz told [7] the Wall Street journal in 2008:  “The Fed … has gone about as if the problem is a shortage of liquidity. That is not the basic problem. The basic problem for the markets is that [uncertainty] that the balance sheets of financial firms are credible.”)

Third, Weill argued that all assets must be marked to market every day.   (Background here [8] and here [9].)

 

Mr. Weill’s suggestions would go a long way toward fixing our broken financial system and giving us a shot at prospering once again.

Note: We are obviously not defending Weill’s horrific past actions, and he failed to mention prosecuting fraud, which is perhaps the most important action [10] we can take to help the economy recover [11]. And we believe that bonuses and ill-gotten gains should be clawed back from every Wall Streeter who committed fraud [12].

However, we take our allies where we find themAnd on the points he raised today, Mr. Weill’ is on the same side of the fence as all of the top independent economists and financial experts.


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URLs in this post:

[1] Washington’s Blog: http://www.washingtonsblog.com/2012/07/former-citi-boss-reduce-leverage-to-15-times-assets-put-everything-back-on-the-books-and-mark-to-market-every-day.html

[2] big news: https://www.google.com/search?hl=en&as_q=weill+banks&as_epq=&as_oq=&as_eq=&as_nlo=&as_nhi=&lr=&cr=&as_qdr=d&as_sitesearch=&as_occt=any&safe=images&tbs=&as_filetype=&as_rights=

[3] we should break up the big banks: http://www.washingtonsblog.com/2012/07/the-banker-most-responsible-for-allowing-the-too-big-to-fail-banks-break-them-up.html

[4] confronting top government officials: http://www.washingtonsblog.com/2012/07/all-of-a-sudden-everyone-is-talking-about-breaking-up-the-big-banks.html

[5] told: http://video.cnbc.com/gallery/?video=3000104457&play=1

[6] Background: http://www.washingtonsblog.com/2011/12/insane-levels-of-leverage-by-the-too-big-to-fail-banks-not-deadbeat-borrowers-caused-the-financial-crisis.html

[7] told: http://www.washingtonsblog.com/2008/10/the-problem-was-never-liquidity-but-insolvency-and-we-should-let-insolvent-banks-fail.html

[8] here: http://www.washingtonsblog.com/2010/03/lehman-fraudulently-cooked-its-books-accounting-giant-ernst-young-helped-geithner-and-bernanke-winked-and-slapped-them-on-the-back.html

[9] here: http://www.washingtonsblog.com/2009/03/the-geithner-summers-bernanke-plan-to-prop-up-asset-prices-has-failed.html

[10] the most important action: http://www.washingtonsblog.com/2010/10/fraud-caused-great-depression-and-this.html

[11] help the economy recover: http://www.washingtonsblog.com/2011/03/top-economists-trust-is-necessary-for-a-stable-economy-but-trust-wont-be-restored-until-we-prosecute-wall-street-fraud.html

[12] should be clawed back from every Wall Streeter who committed fraud: http://www.washingtonsblog.com/2011/10/top-fraud-prosecutor-the-criminals-can-be-forced-to-disgorge-their-ill-gotten-gains-including-bonuses.html

[13] Financial Crisis Inquiry Commission Slams Greenspan, Bernanke, Geithner, Paulson, Summers, SEC, Rating Agencies and Big Banks for Causing Crisis: http://www.prisonplanet.com/financial-crisis-inquiry-commission-slams-greenspan-bernanke-geithner-paulson-summers-sec-rating-agencies-and-big-banks-for-causing-crisis.html

[14] Bill Black On Foreclosuregate: Calls For The Immediate Termination Of Bernanke, Geithner And Holder: http://www.prisonplanet.com/bill-black-on-foreclosuregate-calls-for-the-immediate-termination-of-bernanke-geithner-and-holder.html

[15] Grayson Sends Letter To Geithner, Bernanke Demanding Foreclosure Freeze, Warns Of Systemic Bank Failure Risk: http://www.prisonplanet.com/grayson-sends-letter-to-geithner-bernanke-demanding-foreclosure-freeze-warns-of-systemic-bank-failure-risk.html

[16] 79% of Americans Want an Audit of the Fed, Only 21% are in Favor of Confirming Bernanke, and Only 20% Think Geithner is Doing a Good Job: http://www.prisonplanet.com/79-of-americans-want-an-audit-of-the-fed-only-21-are-in-favor-of-confirming-bernanke-and-only-20-think-geithner-is-doing-a-good-job.html

[17] The Coming Derivatives Crisis That Could Destroy The Entire Global Financial System: http://www.prisonplanet.com/the-coming-derivatives-crisis-that-could-destroy-the-entire-global-financial-system.html

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