From Larry Summers:
"Financial institutions that have benefited from government support can, should and must use this moment to think about what they can do for their country -- byaccepting the necessary regulation to protect the American people," Summers said in remarks prepared for delivery at the Economist's Buttonwood Gathering in New York. "There is no financial institution that exists today that is not the direct or indirect beneficiary of trillions of dollars of taxpayer support for the financial system."
How about this Larry?
"Financial institutions will be placed under strong regulation and capital controls. We will mark every asset to the market, we will investigate all the fraud, we will force all off-balance sheet "assets" back on balance sheet and we will stop the looting."
Oh wait. I live in America, where the banks run the Congress, not the other way around. Never mind a President and Chairman of House Financial Services who can't manage to get up off their knees, and they're not praying when they genuflect either.
I've had it with the knob-polishing behavior of these jackasses in DC, especially when it comes to letters like this:
Banks should be given three years to raise capital for offsetting assets and liabilities that must be brought onto their balance sheets, Citigroup Chief Financial Officer John Gerspach said yesterday in a letter to regulators. Requiring banks to “assume the risk-based capital effects immediately, or even over one year, is an undeniably severe penalty,” he wrote.
FASB has already postponed the implementation of this rule, which it voted on in July of 2008. It was originally to take effect in November of last year; the banks at that time said:
``The risks of too much haste are high,'' the securitization forum and Sifma said in a July 16 letter to the FASB. The ``abrupt consolidation'' of off-balance-sheet structures ``is likely to swell the balance sheets of the affected entities.''
So they got a reprieve for one year.
Now the banks are griping that this isn't good enough, and they want even more time!
An "undeniably severe penalty"?
Citibank, JP Morgan and the rest have all known about this for more than two years. They have had all this time to prepare for this event, they have had all this time to raise capital, they have had buoyant stock prices occasioned by FASB being literally extorted by Congress into allowing banks to lie about asset values, thereby cranking their stock prices up by 300, 400, even 600%. Specifically:
Citibank, $0.97 -> $4.59, 473%
Bank of America, $2.53 -> $17.26, 682%
JP Morgan, $14.96 -> $47.47, 317%
Wells Fargo, $7.80 -> $30.02, 384%
JP Morgan has a market cap of $181 billion dollars as of this afternoon. If they were forced to issue