Tuesday, October 12, 2010

Goldman's Blankfein: Geithner is Weak; The Next Crisis Will be Much Worse

 Bess Levin of DealBreaker reveals that one of her sources was sitting next to a Wall Street chief executive at dinner. She did not reveal the name of the Wall Street big wig, but John Carney has put the pieces together to determine it was Goldman Sachs CEO Lloyd Blankfein.

Here's what Levin's source reported via email that Blankfein had to say:

“Bess — [Redacted] was seated next to me at [Manhattan restaurant] last night. I figured given the s—storm Wall Street’s been through the last couple years he’d keep shop talk to a minimum. But, he didn’t hold back; I wasn’t making an effort to eavesdrop, but he’s not exactly the softest speaking gent in town and the tables are way too damn close. Anyway, his four main points I picked up:

1) The biggest systemic risk in the financial system is the Clearinghouse model. Over the next 20 years, if the current system of trade clearing does not change, we will have an event that made the past three years seem minor.

2) Geithner is helpless. [Redacted] said he’s incredibly smart but he can’t help you. Anytime anyone goes up to him with a problem, he’s incapable of giving an answer and is basically like an administrator at best. [Redacted] said something like, “It is like talking to a third party.”

[Redacted] compared him to Paulson, said “Hank was just the opposite.”

3) While discussing Congress: ”I don’t want to be around when the next financial crisis comes.” These guys don’t know what they are doing and can’t decide on anything. It will be much worse. ”Nobody is too big to fail.”

4) He’s as cool as the other side of the pillow. He said, “People always come up and ask me, ‘how are you doing?’” I respond, “I was fine until you asked me.”" ”Everyone expects me to be in pain after all that has gone on over the past couple of years, but to be honest with you, I don’t feel any of it.”
The breakdown on why Carney believes this is Blankfein is here.

No comments:

Post a Comment