Anyone remember the spectacle of Jamie Dimon being called to account for the London Whale? Lawmakers sought a bit of camera time and figured a public thrashing of the JPMorgan boss over a rogue trader’s $2 billion loss (at the time) was a great way to do it.
Largely overlooked was the $19 billion in losses from the government’s bailout of the auto industry, reported just before the hearing. The latter was hailed as a success. Only in the absurd Beltway world would a $19 billion loss be a political positive, while a $2 billion loss cause for grave concern and partisan grandstanding, but so it is.
Get ready for more.
Prolific letter-writer and Massachusetts Senator Elizabeth Warren, D-Massachusetts, has penned another message, this time asking Banking, Housing and Urban Affairs Committee Chairman Mike Crapo, R-Idaho, to throw Wells Fargo CEO Tim Sloan in the dock.
Not that we have much (check, any) sympathy for whatever stress the bank’s executives might be feeling, but as previously noted, how can the senator and her sycophants possibly make it better?
They can’t.
The public airing of Wells Fargo dirty—toxic, radioactive, hazmat—laundry is now a thing because of the market, not anything regulatory or sanction related. Indeed, the symbiotic back-scratching between Washington and Wall Street arguably made it worse.
We’re reminded on the moral panic in the wake of Madoff (and Lehman and Enron and WorldCom and …) to do something, anything, didn’t matter if it might make it worse. Few realize it was the market that exposed the massive fraud, not anything regulators or investigators did. Think the SEC “got” Madoff ? Here’s a refresher from hero Harry Markopolos, who busted Bernie with simple math.
Senators now seek to question Sloan and the Board about “new developments,” something completely superfluous, and will only hurt those (once again) they profess to help—Wells Fargo participants and shareholders.