Inside Obama's Meeting with Bank CEO's

Discussion in 'Wall St. News' started by Landis82, Apr 3, 2009.

  1. Pretty interesting . . .

    Inside Obama's Bank CEO Meeting

    Eamon Javers Eamon Javers – Fri Apr 3, 2:00 pm ET

    The bankers struggled to make themselves clear to the president of the United States.

    Arrayed around a long mahogany table in the White House state dining room last week, the CEOs of the most powerful financial institutions in the world offered several explanations for paying high salaries to their employees — and, by extension, to themselves.

    “These are complicated companies,” one CEO said. Offered another: “We’re competing for talent on an international market.”

    But President Barack Obama wasn’t in a mood to hear them out. He stopped the conversation and offered a blunt reminder of the public’s reaction to such explanations. “Be careful how you make those statements, gentlemen. The public isn’t buying that.”

    “My administration,” the president added, “is the only thing between you and the pitchforks.”

    The fresh details of the meeting — some never before revealed — come from an account provided to POLITICO by one of the participants. A second source inside the meeting confirmed the details, and two other sources familiar with the meeting offered additional information.

    The accounts demonstrate that despite the public comments on both sides that the meeting was cordial, the tone in the room was in fact one of mutual wariness. The titans of finance -- men used to being the most powerful man in almost any room -- sized up a new president who made clear in ways big and small that he expected them to change their ways.

    There were signs from the outset that this was a business event, not a social gathering. At each place around the table sat a single glass of water. No ice. For those who finished their glass, no refills were offered. There was no group photograph taken of the CEOs with the president, which typically happens at ceremonial White House gatherings but not at serious strategy sessions.

    “The only way they could have sent a more Spartan message is if they had served bread along with the water,” says a person who attended the meeting. “The signal from Obama’s body language and demeanor was, ‘I’m the president, and you’re not.’”

    According to the accounts of sources inside the room, President Obama told the CEOs exactly what he expects from them, and pushed back forcefully when they attempted to defend Wall Street’s legendarily high-paying ways.

    From the White House, there were five principal attendees: chief of staff Rahm Emanuel, who arrived a few minutes late, Treasury Secretary Timothy Geithner, Council of Economic Advisers chairwoman Christina Romer, senior adviser Valerie Jarrett and director of the National Economic Council Larry Summers. Uncharacteristically, Summers said almost nothing, and it appeared to one participant as if he had been told to remain silent.

    To break the ice, JPMorgan Chase CEO Jamie Dimon offered Geithner a fake check for $25 billion, the amount of Troubled Asset Relief Program money that the company has accepted. Although many of those in the room laughed, Geithner didn’t keep the check.

    The president entered the room a few minutes later and made a lap of the table, shaking hands and saying hello to the CEOs, several of whom he called by name.

    Taking his seat at the table, the president said, "So let's get to it." He spoke for several minutes without notes, giving an overview of the economic situation as he saw it. But the first comment that made an impression on several attendees was on Wall Street salaries and bonuses.

    The president spoke of public outrage over the high-flying executive lifestyle. "The anger gentlemen, is real," Obama said. He urged pay reform and said rewards must be proportional, balanced, and tied to the health and success of the company.

    The president described the financial system as still “fragile” and asked for cooperation from the CEOs. But he also told them he wouldn’t shy away from regulatory reform. Obama wrapped up his remarks and threw the conversation open to the table, saying, “So, who’d like to talk?”

    JPMorgan’s Dimon spoke first. He began by complimenting the president on the economic team he’d assembled. And he said his industry needs to explain more directly to the American people that the economic recovery plans are already working. Dimon also insisted that he’d like to give the government’s TARP money back as soon as practical, and asked the president to “streamline” that process.

    But Obama didn’t like that idea — arguing that the system still needs government capital.

    The president offered an analogy: “This is like a patient who’s on antibiotics,” he said. “Maybe the patient starts feeling better after a couple of days, but you don’t stop taking the medicine until you’ve finished the bottle.” Returning the money too early, the president argued could send a bad signal.

    Several CEOs disagreed, arguing instead that returning TARP money was their patriotic duty, that they didn’t need it anymore, and that publicity surrounding the return would send a positive signal of confidence to the markets.

    Bank of America CEO Ken Lewis cracked a joke at the expense of his peers who’d lavished praise on the administration: “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.

    The president argued that’s not what the White House was doing. Indeed, earlier the same week, Obama said at a nationally televised news conference, “The rest of us can’t afford to demonize every investor or entrepreneur who seeks to make a profit.”

    As the meeting wound down after nearly an hour and a half, the CEOs hustled out to live television positions on the White House grounds, where many gave interviews to CNBC.

    It had been a landmark day in the history of American capitalism. Unbeknownst to the financial executives, General Motors CEO Rick Wagoner was also on Pennsylvania Avenue that day, meeting with Obama’s auto bailout task force. Although the finance CEOs got a meeting with the president, Wagoner saw only Obama’s senior advisor Steven Rattner at the Treasury Department. During the meeting, Rattner demanded Wagoner’s resignation.

    It had been a tough day for CEOs in the nation’s capital.
  2. yep, Obama the RULER has told the Banking Community.."I am the only thing, me and my administration, standing between you and the Pitchforks.".

    Well well me Ruler....I'an't carying a pitch fork and neither are the millions that are pissed off at the socialism that you push.
    We are carrying far more fire power. This is America and the 2nd amendment stands.

    So, once again, SCARE PROPAGANDA rules the idiots.

    FEAR is nothing more than Slavery and it is what controlls the population.
  3. Eight


    Who cares about executive bonuses. The porkulus bill gave 3.5 Billion to Acorn... exec pay is the biggest red herring issue.... Obama is doing what Democrats have always done. He uses the crisis, and it's obvious he keeps playing up the crisis. He will use the crisis to spread money around and consolidate the Democrat's power base. He will make sure that Black Voters are happy with their public sector jobs and public sector money, they can't get private sector jobs, Jessee Jackupwhitey sees to that. Obama will see that the Democratic elected officials are very will fed off of the pork and that their war chests are filled...

    Personally I think the whole thing is going to backfire like mad on the current admin. I don't think the stimulus is going to work as well as the economists are probably telling Obama, I think they are going to stimulate until there just isn't anything more that can be done, then they will just print money like Zimbabwe in order to try to keep the power base of voters on the Democrat reservation. Liberals don't care about having a great nation that much, if they destroy it but stay in power that's fine with them...
  4. reading that i would say obama got it exactly right. once again. it is amusing to listen to the big shot wall street con men cry like a baby whose parents took away their candy jar for misconduct.
    sounds just like the republican congressmen who after 12 years of control were kicked out after helping lead this country into diaster and now spend their time complaining while offering no solution of their own except the same policies that brought us to this point..
  5. My fear is that the administration will use these stress tests to demand that the banks keep the TARP money regardless of whether they need it or not. Then use the TARP money as justification for strong arming these financial institutions into lending to factions they deem a priority. Should a bank resist ACORN and other interest groups would be mobilized, 'pitch forks' and all!
  6. If these banks aren't allowed to pay quality people what the market dictates that they are worth, then the banks will become living dinosaurs filled with bureacrats who can't get hired by the institutions that have the freedom to pay market rates (like the hedge funds).

    When I graduated from college (over 20 years ago), the investment banks got the best and brightest largely because they paid the most money immediately, and offered the most opportunity for income gains in the future. That principle goes all the way up the totem pole in these organizations to the chief executives. If they cap pay rates at $300K or some such amount, they'll just get the flunkies who can't command more elsewhere in the free labor market. Or worse yet, they'll get those who just have political ambitions working to please their politician overlords.
  7. You're confusing normal "Banks" that gather deposits and lend out to individuals and businesses. No rocket science degree required provided you following prudent lending standards e.g. the borrower has a verified job,income and equity.

    Then you have the "investment bankers and hedge fund types " the mother f u c k e r s who have rocket science degrees with their fancy quant models, fancy loan parcelling skills CDO, MBS, level 3, SIV and got us into this f'ing mess.
  8. I got such a sense that the "adults are back in charge" with how Obama runs his meetings. What a difference from when W would sit in a corner with his Nintendo DS and the others would talk about how they could steal even more from everyone else.
  9. wmb


    I would say Obama is pretending to be an adult! what he is building is a government within the banking financial sector. The executives, officers, or anyone with a half a brain will leave these companies and start all over. They already are leaving and forming new companies. Obama and his immature way of governing is idiotic. We will have 2 feds, one that prints the money and one that spends it on paying more federal employees pretending to be bankers distrubuting mortgages to unqualified homeowners who routinly foreclose. those of us who want to pay our bills and participate in an america that flurishes will continue to work with those who are not working with the government!
  10. All businesses want quality-people (best and brightest).

    But the CEO's and Board members of many of the financial companies have proven that they themselves are NOT the best and brightest.

    So what's the point of making sure that the B & B can work under Dumb and Dumber?
    #10     Apr 4, 2009