There are some people, not all of them bankers, who think that U.S. Sen. Chris Dodd, the head of the banking committee, should be pushing an apple cart on 5th Ave. in New York in the morning and selling pencils out of a tin cup in the evening.
“Sen. Christopher J. Dodd,” read the lede on the front page Hartford Courant story , “sent the already reeling shares of major US banks to nearly two decade lows Friday after he said that short term nationalization of some large banks might become necessary to lift them out of a mire of bad loans.”
The story was accompanied by a graphic showing the result of Dodd’s loose tongue, a perfect “V” the bottom of which tickled the bottom of the stock market floor one day after Dodd told Bloomberg News, “I don't welcome that [nationalization of the banks] at all, but I could see how it's possible it may happen. I think that's unfortunate, but it may come to that.”
Bloomberg did what Bloomberg does: It posted Dodd’s “concerns” electronically which, according to the Courant story, “immediately pushed down the shares of Bank of America, Citigroup, JPMorgan Chase and other megabanks. Shares of Citigroup, parent of Citibank, hit a low of $1.61 within an hour of Bloomberg's report. It last closed below that level in November 1990.”
Someone at the Courant, apparently watching the nosedive, contacted the sweet tongued Dodd, who professed "surprise" that a mere word from the chairman of the U.S. banking committee could be so fatal to financial stocks. But some words that can kill do kill.
Those of us who live most of our lives in Connecticut -- rather than in the Alice in Wonderland beltway where Dodd spends most of his time, when he is not running for president -- know very well that words can kill, because we remember well when his comrade in the senate, the esteemed Harry Read, whispered that he had been in a private tete a tete with some unnamed insurance executive and heard from him that a major, major insurance company was on the ropes. This intelligence, part of the Democrat’s politics of fear, was designed to spook the Congress into backing an earlier much less expensive version of the current multi-trillion dollar rescue effort of the US economy.
Reid’s loose lips very nearly sank some Connecticut insurance companies.
Following Dodd’s killer words, the White House – under the advisement of former President Bill Clinton to talk up the economy now that the Democrats, deploying the politics of fear, got their multi-trillion rescue package passed through a politically divided and spooked congress – issued a quick statement averring that the administration remains committed to using public money to bail out but not take over banks.
Press secretary Robert Gibbs was trotted out to announce to a quickly assembled press conference, “The president believes that a privately held banking system regulated by the government is the correct way to go.”
The administration is not yet prepared, apparently, to paint the White House red.
Dodd's destructive chatter about nationalization, The American Bankers Association said following the senator's statement, was "impairing the financial sector and making the credit situation worse. Investors will remain on the sidelines if there is continued speculation that the government may step in and undercut their investment.”
The Dodd torpedo was launched only a short time after the senator attempted to declaw his critics by releasing partial information on his sweet-heart mortgage deal with the now defunct Countrywide, a lender that gave Dodd a deal he couldn’t refuse on his properties in East Haddam, CT and Washington DC.
In a follow-up news conference, Dodd noted that he had "hardly been friendly" to financial institution that had over the years contributed generously to his political campaigns. When he put the nationalization pistol to the head of Wall Street, the senator may have been over-compensating.
And Dodd has much to compensate for. The senator’s powerful banking committee created and now oversees the Troubled Asset Relief Program (TARP), a $700 billion dollar bailout of financial institutions impacted by the sub-mortgage meltdown. Dodd has said he personally turned what had been a four page draft into the 80-plus page TARP rescue plan.
According to Americans for Limited Government, the TARP plan, if fully implemented, “would cost $2.75 trillion: $1 trillion for the ‘public-private investment fund’; $1.1 trillion—$100 billion allocated and $1 trillion lent-printed from the Fed—for consumer and business lending; $600 billion for purchasing bad paper from Fannie and Freddie; and another $50 billion to give homes away to those facing foreclosure.”
A good portion of the $9 million dollars Dodd raised for his failed presidential run and successful Senate re-election campaign ($4,180,690) came from people involved in the Securities and Investment Banking ($1,278,241 ) and Real Estate and commercial banking ($900,000) sectors. From 2003 to 2008, Dodd also hauled in $316, 994 from Citigroup Inc. and $223,478 from A.I.G. He was close to the top of his class in receipts of campaign cash from commercial banks, which contributed $570,294 to his campaign.
Some may regard Dodd’s inadvisable talk about partial bank nationalization as evidence that the Dodd inspired TARP rescue plan is foundering.
Bankers certainly do.
“Sen. Christopher J. Dodd,” read the lede on the front page Hartford Courant story , “sent the already reeling shares of major US banks to nearly two decade lows Friday after he said that short term nationalization of some large banks might become necessary to lift them out of a mire of bad loans.”
The story was accompanied by a graphic showing the result of Dodd’s loose tongue, a perfect “V” the bottom of which tickled the bottom of the stock market floor one day after Dodd told Bloomberg News, “I don't welcome that [nationalization of the banks] at all, but I could see how it's possible it may happen. I think that's unfortunate, but it may come to that.”
Bloomberg did what Bloomberg does: It posted Dodd’s “concerns” electronically which, according to the Courant story, “immediately pushed down the shares of Bank of America, Citigroup, JPMorgan Chase and other megabanks. Shares of Citigroup, parent of Citibank, hit a low of $1.61 within an hour of Bloomberg's report. It last closed below that level in November 1990.”
Someone at the Courant, apparently watching the nosedive, contacted the sweet tongued Dodd, who professed "surprise" that a mere word from the chairman of the U.S. banking committee could be so fatal to financial stocks. But some words that can kill do kill.
Those of us who live most of our lives in Connecticut -- rather than in the Alice in Wonderland beltway where Dodd spends most of his time, when he is not running for president -- know very well that words can kill, because we remember well when his comrade in the senate, the esteemed Harry Read, whispered that he had been in a private tete a tete with some unnamed insurance executive and heard from him that a major, major insurance company was on the ropes. This intelligence, part of the Democrat’s politics of fear, was designed to spook the Congress into backing an earlier much less expensive version of the current multi-trillion dollar rescue effort of the US economy.
Reid’s loose lips very nearly sank some Connecticut insurance companies.
Following Dodd’s killer words, the White House – under the advisement of former President Bill Clinton to talk up the economy now that the Democrats, deploying the politics of fear, got their multi-trillion rescue package passed through a politically divided and spooked congress – issued a quick statement averring that the administration remains committed to using public money to bail out but not take over banks.
Press secretary Robert Gibbs was trotted out to announce to a quickly assembled press conference, “The president believes that a privately held banking system regulated by the government is the correct way to go.”
The administration is not yet prepared, apparently, to paint the White House red.
Dodd's destructive chatter about nationalization, The American Bankers Association said following the senator's statement, was "impairing the financial sector and making the credit situation worse. Investors will remain on the sidelines if there is continued speculation that the government may step in and undercut their investment.”
The Dodd torpedo was launched only a short time after the senator attempted to declaw his critics by releasing partial information on his sweet-heart mortgage deal with the now defunct Countrywide, a lender that gave Dodd a deal he couldn’t refuse on his properties in East Haddam, CT and Washington DC.
In a follow-up news conference, Dodd noted that he had "hardly been friendly" to financial institution that had over the years contributed generously to his political campaigns. When he put the nationalization pistol to the head of Wall Street, the senator may have been over-compensating.
And Dodd has much to compensate for. The senator’s powerful banking committee created and now oversees the Troubled Asset Relief Program (TARP), a $700 billion dollar bailout of financial institutions impacted by the sub-mortgage meltdown. Dodd has said he personally turned what had been a four page draft into the 80-plus page TARP rescue plan.
According to Americans for Limited Government, the TARP plan, if fully implemented, “would cost $2.75 trillion: $1 trillion for the ‘public-private investment fund’; $1.1 trillion—$100 billion allocated and $1 trillion lent-printed from the Fed—for consumer and business lending; $600 billion for purchasing bad paper from Fannie and Freddie; and another $50 billion to give homes away to those facing foreclosure.”
A good portion of the $9 million dollars Dodd raised for his failed presidential run and successful Senate re-election campaign ($4,180,690) came from people involved in the Securities and Investment Banking ($1,278,241 ) and Real Estate and commercial banking ($900,000) sectors. From 2003 to 2008, Dodd also hauled in $316, 994 from Citigroup Inc. and $223,478 from A.I.G. He was close to the top of his class in receipts of campaign cash from commercial banks, which contributed $570,294 to his campaign.
Some may regard Dodd’s inadvisable talk about partial bank nationalization as evidence that the Dodd inspired TARP rescue plan is foundering.
Bankers certainly do.
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