Sunday, January 10, 2010

Diogenes: He Found One Honest Man

The News, Diogenes, there is one honest man. Reuters reports that John Reed, a fellow MIT alum, not in the Economics Department like Mr Gruber of MIT of whom we discussed earlier, is the one honest man sought by Diogenes.

I know John and had met with him a few times in the past, when he was at Citi. A highly competent and honest a man as one could ever ask for. Then he joined up with the other sides of the Citi team and alas you have what is there today.

Reuters reports:

Reed, who retired from
Citigroup in 2000, told the paper that Wall Street would not fully regain the public's trust until banks scaled back bonuses for good.

"There is nothing I've seen that gives me the slightest feeling that these people have learned anything from the crisis," Reed told the paper. "They just don't get it. They are off in a different world."

Indeed they all do not get it, including Treasury and alas also the FED. They borrow money from us, all of us, at zero interest, then either risk it knowing there is no downside or just deposit it and we pay them interest. It is free money, free to them, costly to us. Frankly it is immoral, beyond just bad. Yes, as John says, they have learned nothing, we have taught them nothing. Failure and collapse has merit, for from the ashes arises a better and reformed set of entities.

What we have done for banking is akin to all those bumper stickers saying "My Child is on the Honor Roll". You see that is what happens when everyone gets an award. There are no losers. Goldman should have eaten the losses from AIG, for frankly they should have known better., and if truth be known, did! Instead, well, watch the $100 million plus bonuses, yes that is 9 figure bonuses.

Remember that ultimately it is our money, our children's money, and our grand children's money.