5. Weill Goes Wild
(Originally published July 27, 2012)
(C - Get Report)
Chairman Sanford "Sandy" Weill was talking on television Wednesday and he casually said that it's time for the United States to "go and split up investment banking from banking."
To which we respond: WTF Weill? Are you out of your mind?
Weill, for those too young to remember, led the 1998 merger of Travelers Group and Citicorp to form Citigroup, the so-called "financial supermarket" that was rescued from bankruptcy during the 2008 financial crisis with a $45 billion investment by the federal government.
And for those that may have forgotten, Weill was also a major force in overturning the Glass-Steagall Act that originally separated investment and commercial banks. Weill fiercely lobbied then-President Bill Clinton throughout the 1990s to dump the Depression-era law. Clinton finally caved in 1999 and signed the Gramm-Leach-Bliley Act, which ushered in the era of too big to fail banks.
Put simply, Weill is the Dr. Frankenstein of the financial industry and the monsters he helped create -- making him filthy rich in the process -- ultimately turned on their masters and nearly destroyed the global economy. That's what makes his two-faced comments so darn sickening and even harder to take at face value.
Sincerely Sandy, if you are going to be this hypocritical then save it for a deathbed recantation, don't be an ass and do it on CNBC's Squawk Box.
"I am suggesting that they be broken up so that the taxpayer will never be at risk, the depositors won't be at risk, the leverage of the banks will be something reasonable, and the investment banks can do trading ... not subject to a Volcker rule," continued Weill, now a philanthropist after retiring as Citigroup's Chairman in 2006.
Wait! Don't barf yet. Hold it just one more second until you've read Weill's reason for changing his opinion on the benefits of behemoth banks.
"The world that we live in now is different from the world we lived in 10 years ago," said Weill.
Like they say in politics, he was for it before he was against it. And if he had half a brain he would have kept his mouth shut about it.
But he didn't.
Feel free to puke now.