Bill Hartung, Bank Holding Company
The news the other day that American Express is reorganizing itself as a bank holding company so it can access federal bailout funds was the last straw.
"What about us?", my wife and I complained. Why should we hold our breath and hope that some of the hundreds of billions allocated for the big institutions that helped get us into this mess in the first place will somehow trickle down to us?
So, we've decided to reorganize ourselves as a bank holding company, the better to access federal bailout funds.
I haven't talked to any lawyers yet to see how this can be done (or, I suppose, if it's even legal, but I don't see why I should be held to such a high standard given the conduct of the average corporation).
Here's how I see it: given our limited (zero) experience in the banking sector, we'll focus on "micro-lending" as a way to limit the damage we can do. This dynamic business model should serve us well in these troubled times.
Can't afford that five dollar frapuccino at Starbucks? Step right up to our street corner branch (consisting of a card table and a milk crate tipped on its side to serve as a stool) and we'll see what we can do. Can't afford to buy the Wall Street Journal, the Financial Times AND the New York Times on the same day? Let's talk. Need to buy your kid the latest computer game but don't have the liquidity to do so? Sorry, we're micro-lenders, remember? Anything over ten bucks is someone else's problem.
We'll need to work out the kinks, and maybe even find ways to make loans for things that have greater social utility than hyper-caffeinated drinks or recycled David Brooks columns, but at least we have a plan. That's more than I can say for Hank Paulson.
Great idea! Can I be on your board of directors and vote myself a cushy annual fee?
November 14, 2008 1:53 PM | Reply | Permalink
Let me see now. The foxes ate all the farmer's chickens, so now were gonna replenish the farmer's stock by giving 10,000 new chickens to the foxes to take to the farmer.
Is that about it?
November 14, 2008 3:39 PM | Reply | Permalink
What?
November 15, 2008 1:14 PM | Reply | Permalink
Bwakfat,
Congress isn't in bed with pre-Reagan, relatively reputable businessmen anymore, they're in bed with the sharks Reagan let loose and who now permeate our business community, they're the gang that caused the financial problems we're in.
Until someone addresses the disease in the business community we're going nowhere.
November 16, 2008 8:26 AM | Reply | Permalink
Wonderful. I'd like a job as a loan officer. I'm going to make subprime $10 microloans to people who clearly can't ever pay the money back. I plan to mostly lend to hobos and transients, particularly if they need the money to buy plastic bottles of vodka. But here's the thing, I'm going to package the loans together and sell them to hedge funds. Sure, some will default, enough people will pay their loans back, with interest, that we'll all make money.
It'll be okay. Trust me.
November 14, 2008 4:27 PM | Reply | Permalink
Funny but all this Paulson trashing is getting tiresome -- it's yesterday's news.
We should be calling our Donks in Congress. Christmas is coming. Where's the moratorium on FICA collections?
November 14, 2008 4:35 PM | Reply | Permalink
That's a good idea. Maybe we should have a full month long tax holiday...
November 14, 2008 5:25 PM | Reply | Permalink
Meaning all federal, state, local, sales, and property taxes. Nothing for a month.
November 14, 2008 5:25 PM | Reply | Permalink
TPM'ers the BHC that Mr. Hartung incorporated this morning, that received a $1.2 billion loan at the Fed window before lunch, was closed this afternoon for massive losses in hedged default swaps on micro/macro paper. All in one day.
Mr. Cuomo is holding up Bill's severance check of $112 million.
His original contract called for a CEO golden parachute of $455 million. Mr. Hartung agreed to reduce the sum in lieu of alleged poor judgment in the management of the bank.
November 14, 2008 6:18 PM | Reply | Permalink
Wait a minute! Do I still get my per diem for attending the Hartung BHC board meeting today? You can send payment to my account at Bank of Cayman.
November 15, 2008 1:19 AM | Reply | Permalink
There was a House sub-committee hearing today chaired by Dennis Kucinich. Between Kucinich and Darrel Issa of Calif., the witness from Treasury, who's appearance says he can play the Pharoah in the next 'The Mummy' movie, was made to look like a shyster for Wall Street.
Its too bad the rest of Congress isn't this aggressive.
But what becomes of it?
November 14, 2008 6:40 PM | Reply | Permalink
That "pharoah" was Neel Kashkari. He's the one who's really in charge of the bailout kitty, and you should be forewarned that quinn esq. was impressed by his photo.
November 15, 2008 9:06 AM | Reply | Permalink
and I want to know if his last name is pronounced "cash carry."
November 15, 2008 9:09 AM | Reply | Permalink
Jeepers, he looks just like Henry Paulson! Is Treasury a government department or some weird cultish club?
November 15, 2008 10:21 AM | Reply | Permalink
art,
I watched the Kucinich hearing and the Dodd hearing and here's what I asw;
Kucinich's hearing was full of fireworks*.
Dodd's hearing; Dodd was almost docile.*
Kucinich vote NAY on the Gramm/Lech/Bliley act,
Dodd voted YEA.
At the risk of sounding like a broken record; Too many Democrats, like Dodd and Schumer, are in bed with Wall Street and the boys in the corporate boadrooms and any fix we're going to get will no doubt go through the people that caused the problem.
The business people of today aren't the same as the business people of yesterday. Today, the Gordon Geckos are permeating the business world.
The incestuous relationship between the right wing capitalists and government may have driven the United States to the end of the road.
November 15, 2008 12:34 PM | Reply | Permalink
I saw bits and pieces on CNBC, including Rep. Cummings asking "..is Kashkari a chump?" Why I remember that is that the anchors seemed more than a little freaked out by the latter. I just found that Think Progress link searching for those keywords, it has a video of that and links with to get more reports/videos.
November 15, 2008 1:14 PM | Reply | Permalink
art,
here's a paraphrase from the Kucinich hearing;
Kashkari; 'Congressman, we don't put money in failing companies.'
Kucinich; 'Mr. Kashkari, that statement will follow you till the end of your career.'
November 16, 2008 10:44 AM | Reply | Permalink
My economic stimulus plan has two parts. First, the US government saves the American automobile industry by buying Toyata and Honda. Second, it sends us all money to buy a new "American" car. (I just happen to need a new car.)
November 14, 2008 7:35 PM | Reply | Permalink
I endorse this plan! As an experienced businessy type person (I'm on the board of the Bill Hartung Bank Holding Company - see above) this plan will spur our economy.
With a new car every American will have cash freed up to go to the malls and buy defective, toxic crap from China, thus helping keep the global economy afloat. Demand for oil will rise, helping our friends in Saudi Arabia.
Put me down for a new Lexus.
November 16, 2008 12:40 PM | Reply | Permalink
BREAKING NEWS: PAULSON HAS ADMITED HE ONCE WROTE SONGS FOR LEONARD COHEN.
Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody know that the war is over
Everybody knows that the good guys lost
Everybody know the fight was fixed
The poor stay poor, the rich get rich
Thats how it goes
Everybody knows
Everybody knows that the boat is leaking
Everybody knows that the Captain lied
Everybody got this broken feeling
Like their father or their dog just died
November 15, 2008 2:15 PM | Reply | Permalink
Need to rewrite this:
November 16, 2008 5:11 AM | Reply | Permalink
tiggers,
excellent post. :-)
November 16, 2008 8:31 AM | Reply | Permalink
I've always been of the opinion that corporate America would never change. So what happens? American Express has to go and prove me wrong. I'm sure they're doing this just to thumb their noses at us doubters. What other reason could they have?
November 16, 2008 9:41 AM | Reply | Permalink
If you consult with a lawyer who agrees to represent you on a contingent fee -- please send me the name and email address. I can see definite potential in your approach.
November 16, 2008 5:43 PM | Reply | Permalink
You are confusing bailout related funds from normally available Fed lending. A bank holding company can borrow from existing Fed lending programs in exchange for making the Fed it's primary regulator. There is no special treatment for Amex, outside of having its application expedited. Amex will emerge as a safer and better regulated organization as a result of becoming a bank holding company.
What is there to gripe about in this scenario?
November 17, 2008 12:23 PM | Reply | Permalink