At first, the financial crisis seemed like it was shaping up to be a bonding experience for the CEOs of the country's largest banks. None of them liked how they were suddenly herded into the spotlight and treated like the world's biggest villains, but at least they were all in it together. And like the contestants on a reality show complain about being unfairly edited, we have to imagine that during the many visits to Washington and the endless meetings at the Fed, the CEOs have done some at-the-urinal commiserating about how unfair this whole thing is, how everyone complaining about their private jets and Zen gardens is just jealous, and isn't it so annoying to be forced to take TARP funds when you don't really need them? ("I mean, we don't," we imagine them saying to each other faux-casually while zipping up their flies. "Do you?") They've even formed little alliances — like when Morgan Stanley's John Mack agreed to take over parts of Citi's Smith Barney unit. But now, with the game heating up, the contestants of Survivor: Financial Crisis seem to have realized that this is a competition.
For instance, when the CEOs met with President Obama at the White House, Bank of America's Ken Lewis made it clear he wasn't there to make friends. Per Politico:
“Mr. President,” he said, “I’m not going to suck up to Geithner and Summers like the other CEOs here have.” Lewis also urged the president not to paint all the banks with the same broad brush.
Then, in last week's conference-call confessional, JPMorgan's Jamie Dimon attacked fellow player Goldman Sachs's strategy, after the latter announced it planned to raise capital in order to return the TARP funds as soon as possible. "I don’t see why a company with that kind of capital would have to raise capital," he said.
And yesterday, a Goldman analyst attacked Citigroup's positive earnings report in a research note: The results “included several one-time items which muddied the waters,” he wrote. “The key question mark in our mind remains what Citi’s earnings power will be on the other side of the crisis.”
We can't help wondering if maybe this has been the administration's plan all along, and the stress tests are just a red herring. Let them expose one another's weaknesses, break each other down. Then, eventually, Obama will call the CEOs to Washington. "I have before me twelve CEOs," he will intone gravely. "But I only have eleven TARP checks in my hands. These checks represent the banks who will still be in the running toward becoming America's top financial institutions."