white men with money

Barney Frank and Committee Examine Wall Street CEOs

Okay, we are a little late to the proceedings, but eight CEOs have reported to Barney Frank’s House Financial Services Committee for their public anal exams: Ken Lewis of Bank of America, Robert Kelly of Bank of New York Mellon, Vikram Pandit of Citigroup, Lloyd “Smiling Eyes” Blankfein of Goldman Sachs, John “Groomed Eyebrows” Mack of Morgan Stanley, Ronald Logue of State Street, John Stumpf of Wells Fargo, and Jamie “Golden Ringlets” Dimon of JPMorgan Chase, who is wearing a green tie that sets off his eyes rather nicely. So far everyone’s just reading their statements, which are kind of a snooze; you can read them here. The question-and-answer portion is sure to be more interesting, despite the fact that earlier, Barney Frank apparently said this hearing is “not a laughing matter.” (We’ll see about that.) You can watch the whole thing live on MSNBC. If you would rather, like, conduct your life, we’ll update this post with the highlights so you can read it at your leisure.

Things we missed due to being late: Jamie Dimon of JPMorgan and Robert Kelly of Bank of New York Mellon are both basically like, “We didn’t really need the TARP funds,” which seems a little ungrateful, actually. Ken Lewis of BofA and Ronald Logue of State Street were like, “We’re lending! What more do you want from us?” Lloyd Blankfein pointed out again that he and his top executives did not take bonuses. Barney Frank pointed at the banking executives and said, “YOU are the recipients of collateral benefit, but you need to understand how angry that makes people.” We wonder if pointing becomes un-rude when the pointed-at people really deserve it?

10:50 a.m. (ish) Morgan Stanley’s John Mack starts talking, but his microphone isn’t on. He grins when people protest. “I was trying to pull a fast one,” he says. Guffaws. See, this is fun already! “I know that the Americans are outraged about compensation costs,” he says. Yay! That’s all we want, really, acknowledgment. No, just kidding, we also want blood. Moving on. “We didn’t do everything right. Far from it.” That’s good. Self-flagellation is nice.

11 a.m. (ish) Vikram Pandit says he understands that the American people want transparency blah blah blah. He addresses the airplane: “We did not adjust quickly enough to this new world. I canceled the order. I get the new reality.” About time. He wishes he was in China so hard. He closes by saying, “I look forward to your questions,” which is an obvious lie.

11:12 a.m. Barney Frank and John Mack banter about bonuses.
Frank: “If you weren’t getting a bonus, what would you not do? Would you take longer lunches or leave early on Wednesday?”
Mack: “We love what we do. If we had no bonuses, we would still love it.”
Frank: “And I will not be charging you to be your efficiency consultant.”
Adorable. Mack’s eyebrows are mesmerizing, by the way. He should insure them, like J.Lo’s booty.

11:19 a.m. Pennsylvania Representative Paul Kanjorksi is going to “take advantage of having eight great financial minds” in front of him and ask some “simple questions.” Here we go. The question is, basically, “If you’re so smart, why didn’t you see this happen?” “Don’t all stampede to answer this now,” he says. He is very droll, this Kanjorksi.

11:20 a.m. Ken Lewis says July, August 2007, and Kanjorksi interrupts him, like, wait, I saw this in July 2007. Are you really telling me that even I saw this before you, the great financial mind? There’s no getting around it, the answer is basically yes. Lewis mumbles something and Kanjorksi turns to Goldman CEO Lloyd Blankfein.

11:23 a.m. Blankfein busts out with the word “bifurcation” — clearly, he is banking on the fact that Kanjorksi won’t know what that means and will cease his annoying questions. This pretty much works.

11:27 a.m. Blankfein is talking, talking. He’s adorable with his big words, but we never realized that he has the exact voice of character actor David Krumholtz.

11:30 a.m. Representative Maxine Waters preempts her question to the “captains of the universe” (oh, dear) by saying she has been in disagreement with the financial community for basically her entire life. “Let me ask you a few questions,” she says. “But I don’t expect you to expound on them.” Way to come at this with an open mind, Maxine.
Her “question,” which is not really a question, is, “Did any of you raise the rate on credit cards after you received TARP money?” (Yes.)
Ken Lewis gamely starts to explain, and nicely doesn’t point out that the term is Masters of the Universe, “I feel more like a corporal of the universe than a captain right now —” he jokes, but Maxine is having none of it. Nor does she really want anyone to answer the question. She moves along, asks something confusing about credit-card fees. She sounds like a crazy person. This is no good. If you are going to get all showboat-y, at least know what you are talking about or be able to fake it convincingly.
“I don’t understand what you are talking about,” Ken Lewis says, sounding honestly befuddled.
“Do ANY of you understand what I’m talking about?!?!” Waters shouts, unsuccessfully trying to make it sound like it’s their fault she is making no sense. Oy.
Kanjorksi shuts her up by telling her she’ll be penalized “when the chairman gets back.” Ha.

11:47 a.m.: Ken Lewis is thoughtfully answering a question about Merrill bonuses from Representative Carolyn Maloney. His entire face is mauve. He, more than anyone, seems to be taking this thing very seriously, and is treating Congress respectfully, as though their questions are not very retarded. He’s very earnest, like the president of a fraternity that’s been called in front of the college board after getting caught drinking on campus. Unlike a fraternity brother, however, he mostly seems to be blaming his broheim John Thain, adding that he wasn’t personally involved in Merrill’s decision to pay themselves $3.6 billion in bonuses, and that while he did encourage them to take it easy on the bon-ii, they were adults and he didn’t really have the authority to tell them what to do.

11:53 a.m.: Noticing that Jamie Dimon has got a kind of John King wave going on.

Noon: Wait, did Pandit just say the government should take the bad assets and “send us a bill” when the economy recovers? That sounds kind of bad, dude.

12:11 p.m.: Representative Nydia Velazquez asks why banks are doing big things, like financing the merger of Pfizer and Wyeth, but won’t lend money to her constituents. Silence. “Of course, you are not going to provide that answer,” she says smugly. Of course not! Because it would be impolite to say, “Have you seen your constituents?” (Bushwick, Williamsburg, Lower East Side.)

12:25 p.m.: Gary Ackerman, stud that he is, points out some cognitive dissonance. It’s kind of weird, he says, that the CEOs are saying everything is fine and they are lending money when it is clearly not. “What I’m hearing from you is words, words, words.” Fair enough. What are they supposed to say, really? “WE ARE JUST AS SCARED AS YOU ARE. I’VE SEWED CASH INTO MY MATTRESS AND CONTRACTORS ARE CURRENTLY BUILDING ME A PANIC ROOM”? He asks who put money into their companies this year, and how much, which leads to an uncomfortable exchange with Lloyd Blankfein: “All of it,” he says. “Because I’m paid in stock.”

Ackerman: “Give me a number.”

Blankfein [death stare]: “None.”

Dimon, Lewis, and Pandit all say they bought shares.

Also, Ackerman is wearing a corsage. Why?

12:31 p.m. Wait. He always does. The committee is breaking for lunch till 1:15 p.m. In the meantime, we’re going to try to crack this corsage riddle.

1:24 p.m. And we’re back. Representative Ackerman’s office has not gotten back about the corsage or about what he has had for lunch, which obviously didn’t calm him down at all, because he’s still feisty. He gets right back in it, telling the bankers not to “insult their intelligence.” Giggles are stifled. Then he asks everyone who owns or leases a corporate jet to raise their hands. Everyone looks at one another and hesitantly raises their hands, except Blankfein. Technically, this “everyone who has been bad raise your hands” thing they keep doing is embarrassing and stupid, but it is kind of entertaining to those of us at home.

1:30 p.m. Representative Garrett of New Jersey asks “Blankenfein” about Goldman’s exposure to AIG. Blankfein somewhat exasperatedly blames the New York Times, which he says gave that impression in an article he says has now been “partially retracted.” He says they were only exposed through the credit markets.

1:49 p.m. Representative Moore is asking everyone what their salaries are, and how much TARP money they got. Citigroup received $45 billion from TARP, Pandit received a $1 million salary and no bonus. Morgan Stanley got $10 billion from TARP, Mack got $800,000 in salary and no bonus. Logue got $2 billion in TARP, $1 million in salary, and no bonus. Lewis got $15 bill in TARP, $1.5 million in salary, and no “incentive” (although he did get “spirit points”). Dimon, $25 billion in TARP funds, $1 million salary, no bonus. Kelly: $3 billion in TARP, $1 million salary, no bonus. Blankfein: $10 million, $650,000 salary, no bonus.

Further perspective: In 2007, these guys as a group took home $182 million, including stock options. This year it’s a little more than $8 million.

1:58 p.m. Holy crap, some guy whose name we didn’t catch Mass Representative Michael Capuano (Yay! We love him!) is screaming his face off. Finally, ACTION. “I don’t really have a question, but they told me I could use my five minutes,” he said, and then lays in. “AMERICA DOESN’T TRUST YOU,” he says. “I CAN’T BELIEVE YOU PEOPLE HAVEN’T BEEN PROSECUTED … I got a lot of money from my various campaigns to put in banks. I don’t have nothing in any of your banks. Because I don’t want my money in any of your banks. You come to us today on your bicycles, selling Girl Scout cookies, helping out Mother Teresa, saying, ‘We’re sorry; trust us.’” He starts tossing off questions: “How many banks lent money to investors who in turn bought credit default swaps? How many invested in CDS or off-balance-sheet vehicles like SIVs?”

Awesomely, a few of the CEOs raise their hands. They’re just used to it by now.

WHOSE brilliant idea was credit default swaps?” he goes on. No one raises their hand. But who cares! He’s not asking a question here, he’s giving orders! “Find them! And fire them!” Bang! He then cedes the rest of his time.

2 p.m. Lloyd Blankfein, asked about his non-possession of the jet, gives props to Amtrak. “I prefer the train,” he says. “It’s comfortable, and you can read.”

2:14 p.m. John Mack conspicuously looks at the clock.

2:17 p.m. Someone asks the CEOs if they thought the bailout was necessary. Vikram Pandit looks at his shoes. Lloyd Blankfein says he didn’t think it was before, but he does now. He does not say, “It’s necessary for some people.”

2:20 p.m. Someone inevitably brings up the fact that their kid received a ton of credit-card solicitations in college and notes that in this way, the banks pushed people into irresponsible borrowing. (Yeah! What about that? We have a pair of leather pants that ended up costing us like $10,000, and come to think of it, that is Vikram Pandit’s fault.) Silence from the CEOs.

2:30 p.m. Time for another break, but Ken Lewis’s microphone is still on. “What are you voting on?” we hear him ask someone. “Not the stimulus package?” The person says “No.” But was that a lie?

3:13 p.m. We’re back. Boring questions about mortgages. Ken Lewis has gotten pinker. While earlier he was a nice shade of mauve, he is now a startling fuschia. North Carolina’s Walter Jones ends with an urgent plea to Ken Lewis: “For God sakes, Mr. Lewis, do everything you can to free credit, because they are suffering.”

3:20 p.m.: As if he is reading our mind, Barney Frank says “they can finish this in just over an hour.” Thank GOD. We were starting to think we’d die here.

3:21 p.m. Representative David Scott from Georgia says that “millions of people across America” are watching this. Um, dude. No offense, but this is not American Idol. Like, 400 people are watching this. Tops.

3:25 p.m. A nice southern gentleman says that although his father told him it wasn’t polite to ask what people made, since someone had already “opened the door” earlier, he was just going to go ahead and ask what they made in 2007, if you don’t mind? Thanks very much. He starts with Lloyd Blankfein, who says he made a million in salary and “Something like $67 million in shares, some cash …” He’s not sure really. Is “an assload” an acceptable answer?

3:27 p.m. “Are you Mr. Countrywide?” the nice southern gentleman asks Lewis, who visibly recoils. “No, I am NOT Mr. Countrywide,” he says. This gets big laughs, almost as if he actually said, “Do I look like an Oompa Loompa to you?”

3:38 p.m. Rep from Texas asks everyone to raise their hands if they are “in the lending business.” Confusion ensues, as no one is sure if he means consumer lending or not. “This is going to be a good Saturday Night Live skit,” someone cracks. Ha! Oh God, we are going to die here.

3:46 p.m. Hey! MSNBC just was like, “Screw this boring crap,” and cut off video. We don’t know what happened, but it looks over. In summary: Not really the anal exam we were expecting! More like a gentle probe of the perineum, conducted in a foreign hospital where the nurse and patient don’t really speak the same language.

Barney Frank and Committee Examine Wall Street CEOs