My Advice to Jamie Dimon, Lloyd Blankfein and Dick Kovacevich

The financial system is in tatters. It deserves to be. Yet scarcely a day passes without some key figure within the banking or broader financial world saying something breathtakingly arrogant. These people are truly nasty and disconnected from reality.

It seems not enough for them to have destroyed the various companies they run. Or to have threatened the livelihoods of countless innocent fellow citizens. Or to have extorted billions of dollars of taxpayer money. No. They still appear on television or in print spouting about how the world ‘needs’ a healthy banking system; about how upset they are about their current image; or about their disgust at the strings the government is attaching to the bailout money they have all eagerly accepted.

Enough.

Shut up people.

You are manifestly stupid. Or else you would not have driven your companies onto the rocks. You are lucky still to be employed. Your credibility is shot. Your personal opinions about the state of affairs has become an embarrassment. So please be quiet and let the grown ups fix the problems you have created.

Banking is the epicenter of our economy. By its nature it involves taking risks. Banks take short term deposits and other funds and turn them into longer term loans and other assets. They make profits by absorbing this risk. They grease the wheels of industry by making funds available for factory and office construction. They enable regular citizens to borrow so that they can own cars and homes. They act as guardians of our cash and savings for retirement. This is an immensely important set of functions. And they require skill, judgement and above all else a sense of fiduciary responsibility.

A banker should be the very epitome of solid citizen.

Which is why these people now coming out of the woodwork representing our banks are such a screaming disappointment. They took unbelievable and unsustainable risks. They undermined the public trust. They gambled in derivatives products they scarcely understood. They ran roughshod over their own risk managers whenever warning flags were raised. They lobbied to avoid being regulated. They bought political influence. They hired arrogant yahoos and gave them freedom to wheel and deal untrammeled by internal controls, or even the need for sensible business models. They concentrated rather than dispersed risks. They frittered away their shareholders wealth as if it were waste water.

In short they played at banking as if it were some fraternity house weekend orgy.

Their sense of proportion was swept away by the massive profits their traders piled up in the maze of esoteric and entirely self serving products we are now all far too familiar with. The derivatives market became a global ponzi scheme with only one reason for being: the enrichment of the children sitting at the trading desks. That business was as far from being justified as banking as a trip to the casino would be.

So stop.

Please just stop.

You have demeaned the industry. You have demeaned yourselves. There are many fine and upright banking people who are horrified at the waste you laid to the companies they have loyally built. They did not share in the riches you syphoned off for yourselves. Yet they have to share the public abuse now heaped on the industry.

So please stop.

And reflect on the enormous, almost historic, stupidity of your incompetence and failure before you utter one more word in public.

You have not one shred of credibility.

Addendum:

Jamie Dimon runs JP Morgan Chase
Lloyd Bankfein heads up Goldman Sachs
Richard Kovacevich is Chairman of Wells Fargo

All three have recently made asinine and outrageously arrogant comments about banking or how important they still are. Clearly they don’t yet ‘get it’.