My late boss at Drexel Burnham Lambert, Walter J. Shaw was alot of things. One thing he did was always call it either black or white, good or bad, right or wrong. He would have called BS on Sandy Weill after his CNBC tirade today. The first question Walter would have asked Sandy is just how do you break up the bailed-out banks which have $5 trillion in deposits as collateral for $280 trillion in derivatives?
Who is Sandy Weill? He is none other than a retired Citigroup Chairman, a
former NY Fed Director, and a "philanthropist." He is also the man who lobbied
for overturning of Glass Steagall in the last years of the 20th century, whose
repeal permitted the merger of Travelers and Citibank, in the process creating
Citigroup, the largest of the TBTF banks eventually bailed out by taxpayers.
In his memoir Weill brags that he and Republican Senator Phil Gramm
joked that it should have been called the Weill-Gramm-Leach-Bliley Act.
Informally, some dubbed it “the Citigroup Authorization
Act.” As The Nation explains, "Weill was instrumental in getting
then-President Bill Clinton to sign off on the Republican-sponsored legislation
that upended the sensible restraints on finance capital that had worked
splendidly since the Great Depression." Of course, by overturning Glass Steagall
the last hindrance to ushering in the TBTF juggernaut and the Greenspan Put,
followed by the global Bernanke put, was removed, in the process making the
terminal collapse of the US financial system inevitable. Why is Weill relevant?
Because in a statement that simply redefines hypocrisy, the
same individual had the temerity to appear on selloutvision, and tell his
fawning CNBC hosts that it is "time to break up the big banks." That's right:
the person who benefited the most of all from the repeal of Glass
Steagall is now calling for its return.
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