Start-of-the-Week Bank Thoughts

Includes: BAC, C, GS, JPM, MS, WFC
by: Tom Brown

Some start-of-the-week thoughts:

BANKERS TO D.C: I see Barney Frank will call the CEOs of eight big banks to testify before his committee on Wednesday, where he’ll presumably stage a photo op and then browbeat the bankers for not lending their TARP money fast enough. It should be fun to watch. Here’s how I think it will go: Vikram Pandit and Ken Lewis, who run banks that have already had to go the federal trough twice, will grovel aggressively and tell the committee they’re lending like crazy as it is, promise to do more, and please can you kick me again, sir. Lloyd Blankfein will nod politely and insist Goldman is committed to both the letter and the spirit it of the TARP program. Ditto John Mack and Morgan Stanley (NYSE:MS). Jamie Dimon will be civil. As for Wells Fargo (NYSE:WFC), I’m not sure if CEO John Stumpf or chairman Dick Kovacevich will appear. Both would do fine, but for sheer entertainment value, you’ve got to hope it’ll be Kovacevich. He’ll tell Frank to buzz the heck off. Wells didn’t want the damn money, didn’t need it, and Frank’s got some nerve now telling him how he ought to be using it. I also hope Dick goes last, so he’ll have had a chance to work up a good head of steam. This will be as close as C-SPAN gets to appointment television.

FROM THE WORDS-YOU-WISH-YOU-COULD-TAKE-BACK DEPARTMENT: Here’s Ken Lewis, writing in Directors & Boards magazine two years ago: "My hope for all of us is that we will find the courage and the wisdom to perform both of our primary functions as directors with equal skill — that of protecting wealth, and of building it for future generations." Yikes! Ken Lewis discussing “courage and wisdom” is like me discussing feng shui. Had I read that back when Ken wrote, it I would have burst out laughing. Now, it’s not so funny. Chad Gifford, it’s not too late. . . .

MORE BRILLIANT PERSONNEL MOVES AT B OF A: Shawn Tully’s account of John Thain’s ouster, in the new Fortune, is a worthwhile reminder of what a raving egomoaniac Lewis is. If there’s any doubt in your mind Thain’s firing was anything but a grand stunt by Lewis whose first, last, and only purpose was to save Lewis’s own keister, just remember that Thain (who was only indirectly responsible for Merrill’s deteriorating fixed-income portfolio, remember) was replaced as head of Global Wealth Management at Merrill by Tom Montag (who was directly responsible for it). Let’s just say the actual management logic behind this particular executive change is obscure.

KAPTUR, KLUELESS: Here’s the advice Marcy Kaptur, the Democratic Congresswoman from Ohio, has for delinquent and foreclosed mortgage borrowers: "I'm saying to them possession is 99 percent of the law; you stay in your house." Just say no! Brilliant! Suffice it to say that if borrowers across the country really did take this nifty nugget of wisdom and barricaded themselves in their homes such that foreclosures became impossible, home mortgage lending in this country would then stop. That wouldn’t do much for the housing market. You may remember Marcy Kaptur, by the way. She’s the same woman who last year thought Ben Bernanke was Hank Paulson.

ELIZABETH WARREN, P.R. MACHINE: I have honest differences with Elizabeth Warren, the Harvard Law professor who’s head of the Congressional oversight panel that’s overseeing the implementation of the TARP program; as I’ve said before, I think she is uniquely unsuitable to the job. But who can’t admire the woman’s talent for publicity? There’s the fawning profile in the new Fortune, and the interview she gave on CBS last week following release of the panel’s latest ritual denunciation of how the TARP is being run. Meanwhile, COP’s own web site is something of an on-line shrine to you-know-who. It’s full of press releases chock-full of Warren quotes; plus, the latest COP report comes with a video introduction by . . . Elizabeth Warren. The woman likes cameras. . . .