As the stock market soared, the Downturnaround took the summer off, growing concerned, then alarmed, that optimism had gotten out of hand. While we never bought into the idea that the economy was broken beyond repair, we have also been reluctant to pass out the “Recession Is Over” party hats before having good reason to believe that another one isn’t right around the corner. Yes, the ol’ double dip, it scares the crap out of us. Big things have to change for us to believe a recovery is sustainable, and frankly, we haven’t seen enough of them. Mostly, it seems, factory workers and mom-and-pop businesses have suffered the worst of this recession, and as far as we can tell, those weren’t the folks who caused the problems in the first place. Which is why we were heartened to see that AIG’s new CEO, Robert Benmosche — yes, the guy who went off to harvest his vines in the Adriatic about two minutes after starting the job — was talking tough, not just to Andrew Cuomo, but to the Wall Street banks the insurer is hiring to take its units public.
In addition to telling AIG executives what he’d do once he got the attorney general of New York in a dark room at a recent meeting in Houston, he told them what he already said to Wall Street banks demanding high fees for underwriting IPOs.
“I went into one presentation, and they said, ‘Well, the investment banking deal will be in the range of 2 percent and 2.5 percent.’ I said, ‘How about 1 percent?’ So then everybody’s face turned red, and I said, ‘So change it.’ So we’re talking about 1 percent, not 2 percent to 2.5 percent.”
He then apparently went on to question how much AIG wastes on lawyers and consultants. He may be a bully, but bully for him! The federal government has proved inept at haggling with Wall Street; maybe it’s time the private sector — to the extent that AIG still qualifies as part of that — takes over. We can’t wait to see what Benmosche does when he’s not on vacation.
AIG’s Benmosche Wants to Halve Wall Street’s IPO Fees [Bloomberg]
