Wednesday, December 8, 2010
DECEMBER 8, 2010 BY GEORGE LOVATO JR
I Guess The Government Dodged That Bullet
Well the cat’s out of the bag…the Federal Reserve loaned money to foreign banks. This is not new news. The long and the short of it is that these are different times than in ’08. This was a full blown crisis of epic proportions. As you all know I am a real fan of Chairman Ben Bernanke. I think he is always the smartest guy in the room. If you all recall the United States was being blamed for creating risky junk investments to which we conned the European banks to invest in. I know that is an exaggeration but that was the tone and tenor at the time. Politically I am sure the Chairman was under a mountain of pressure. Well most of the money has been repaid. Whew! I guess the government dodged that bullet.
Carte Blanche Lending to the Loudest Banks?
However I think it would be wise and prudent to analyze history and the events of years past. My first question is how much true analysis went into who, how much, for what reason and the potential of payback of the potential borrowers. Was this carte blanche lending to the loudest banks? I hope not. But the question needs to be asked. What was the criteria? Who made the calls on who got what? We need to know. Now insofar as frequency goes that is another story. Morgan Stanley borrowed over 200 times. You mean to tell me a bank could not project its actual liquidity needs? Jamie…shame on you.
The Golden Pen
Then there is the issue of hedge funds getting assistance. What? Since when did they qualify? I would like to have been the fly on the wall when that decision was made. I feel that was a huge mistake. They are in the risk business. They should have never received the golden pen from the Federal Reserve. I am disappointed in that decision. As you all know I think the automotive industry should have never received the golden pen either. I am on record that it should have been survival of the fittest. We broke a rule of commerce on that one. I am appalled about lending to a British bank that buys the very same assets from a failed American institution we allowed to fail to begin with. We should have saved Lehman! There is the proof in the pudding.
We Must Stay Within Our Own Boundaries
I hope we learn from history. We are bankers and we have to follow our own rules. We must be prudent but forward thinking. We must be aggressive but controlled in order to stimulate and complement the needs of small business. We must be disciplined for all concerned and conduct the business we are educated and trained to conduct. In other words stay within our own boundaries. We must look to the past and learn. We must use those lessons for the benefit of commerce.
I Am Saddened By What The Government Did
The cat is out of the bag and the cat is laughing. I am saddened about what I know now about what our government did. I wish they had not done some of the things they did. I am disappointed in some of the behavior of some of my fellow bankers. In the end we need to follow our own rules of commerce and capitalism and never allow our government to use the golden pen like that again. Are we better off for what was done? We will never know. We can only speculate.
Friday, December 3, 2010
DECEMBER 3, 2010 BY GEORGE LOVATO JR
He Always Put His Best Foot Forward
Sonny Bono went into politics with the best intentions. From the day he ran for mayor until he achieved success as a congressman he put his best foot forward. I have often thought that more politicians should have had a little more Sonny Bono in them as they set forth on a political career. But alas that is not generally the case.
America Wants Honesty From Their Congressman
I listened to Ben Stein on the CBS Sunday Morning Show. I took his points with some skepticism. Yes Charlie Rangel was a war hero. Yes he has served for a long time. And he has been behind many an important political agenda. But he did make some mistakes. In a time when the average American wants honesty from their congressman he offered up uncertainty. We will never know the entire story political or otherwise. We will only know what we see and hear in the press and as we already know that cannot be relied upon. But someone of his tenure should have been smarter. Someone of his tenure should have been more responsible. Someone of his tenure should have not been as sloppy. Congressmen or statesmen should live to a higher standard. This was not the case.
Sonny Bono…He Got Right
At a time when we really need Washington to outperform themselves we little need an incident like this. When we need Congress to be forward thinking and innovative we did not need this kind of distraction. We need these people we elect to live and work by example. And that example needs to be a reliable and a trustworthy one.
What Charlie Rangel needed was a little more Sonny Bono in him. I do miss Sonny Bono… he got right