The Financial Crisis commission has started hearings. The Huffington Post has a blow by blow (with video clips).
You maybe wondering why we have not amplified these hearings. Today at least, as expected, one heard a whole lot of generalities with a lot of rambling justifications from CEOs and not a lot of substance.
So, in my view this commission will be for show. A lot of Populist rage, possibly some great sound bytes and youtubes, but in terms of really nailing any corporation or any issue, I doubt it.
Here's some confirmation on what we already know. The large banks know the U.S. government will save them.
f there was any doubt that Wall Street thinks the government will step in to save "too big to fail" firms, Goldman Sachs CEO Lloyd Blankfein dispelled it on Wednesday morning.
In response to a question about whether the federal government would prevent one of his three counterparts at today's hearing -- Bank of America, JPMorgan Chase and Morgan Stanley -- from failing, Blankfein essentially said that the government would in fact step in.
"I think tomorrow in the context of this environment, at some level the government would intervene." "Because of the fragility of the system," Blankfein said, the government would be forced to step in.
In other words, 'too big to fail' is real. And Wall Street knows it.
I beg to differ on the reason why. These financial institutions know the government will save them because they are in essence, the government, bought and paid for.
Other sites reviewing the hearing:
Drill Baby Drill from Baseline Scenario.
William Black, Elliot Spitzer and Frank Partnoy give a list of questions to ask the commission