The Motley Fool is celebrating the Banksgiving season with this tongue-in-cheek series skewering the worst banking offenses. Check it all out by clicking here.
You know what I'm thankful for this Thanksgiving? Bankers. Loudmouth bankers, to be exact. By explaining what they do, defending what they did, and predicting where they're going, we gain precious insight into how the funny little world of banking works.
Culled from a nearly endless pile of fodder, here are the top 10 dumbest banker quotes of all time.
10) "I will hurt the shorts, and that is my goal."
-- Former Lehman Brothers CEO Dick Fuld, April 2008
When your lone goal is an egotistical crusade to "hurt" those who see your obvious flaws, bad stuff happens. Had your goal been raising permanent capital, firing those responsible for the mess, and selling bad assets -- or even your entire firm -- things may have turned out differently.
9) "I and so many of us who have been involved in this industry for so long did not recognize the serious possibility of the extreme circumstances that the financial system faces today."
-- Former Treasury secretary and Citigroup (NYSE: C ) director Robert Rubin.
What's wrong with this quote? Nothing really, save for what Rubin wrote in his memoir five years earlier:
"There is one type of financial risk, the risk of remote contingencies -- which, if they occur, can be devastating -- that market participants of all kinds almost always systematically underestimate. The list of firms and individuals who have gone broke by failing to focus on remote risks is a long one."
How's the saying go? "Stick with your first gut instinct?" Oh, never mind ...
8) "It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of these [credit default swap] transactions."
-- AIG (NYSE: AIG ) financial products head Joseph Cassano, August 2007
And it's hard for us, without being flippant, to say you had even the slightest clue what you were doing.
7)"Our capital position at the moment is strong."
-- Former Lehman Brothers CFO Ian Lowitt, five days before the firm filed for bankruptcy.
He was right, actually. But focus on the words "at the moment," because that's what took Lehman Brothers down. When you're reliant on overnight repo financing, as Lehman was, you could go from well-capitalized one moment to set ablaze the next. The fact that Lowitt felt the need to say "at the moment" reiterates this point.
6) "[W]e feel very comfortable that credit quality won't be an issue at Golden West going forward. Even if housing prices drop fairly dramatically, there is plenty of room in their loan-to-value ratio. Yes."
-- Former Wachovia CEO Ken Thompson, describing in 2006 the acquisition of Golden West Financial.
Golden West later tore the bank to shreds. Wachovia sold itself to Wells Fargo (NYSE: WFC ) late last year for next to nothing. When someone throws in a solitary "yes" to top off an argument, it's time to worry.
5) "Some said we should just stick capital in the banks, take preferred stock in the banks. That's what you do when you have failure. This is about success."
-- Former Treasury Secretary Hank Paulson.
Twenty-one days later, Paulson stuck capital in banks and took preferred stock in institutions like Goldman Sachs (NYSE: GS ) , Bank of America (NYSE: BAC ) , and Morgan Stanley (NYSE: MS ) . I guess that meant he officially gave the go-ahead to label our financial system a "failure."
4)"I've known people who worked on the Manhattan Project. And for those of us on that trip, there was the same kind of feeling of being present at the creation of something incredibly important."
-- JPMorgan Chase (NYSE: JPM ) managing director Mark Brickell, describing a 1994 trip to Boca Raton, Fla., where a group of bankers devised the credit default swap.
"Incredibly important" is debatable, but associating credit default swaps with widespread nuclear fallout is pretty dead-on.
3) "When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing."
-- Former Citigroup CEO Chuck Prince, summer, 2007.
This quote translates to, "Yes, we're toast. But in the meantime, I'm making more money than some small nations. If you'd politely let me enjoy it while it lasts, I'd appreciate it. Thanks."
2) "@*%# you."
-- Former Bear Stearns CEO James Cayne, when asked in 1998 to join a Wall Street consortium in bailing out the massive hedge fund Long-Term Capital Management, amid fear its failure would collapse the entire financial system.
Most taxpayers, who 10 years later backstopped Bear Stearns when it needed a bailout and threatened the financial system, only wish they had the opportunity to say the same.
1) "You're approved."
-- Loan officers nationwide, circa 2003-2007.
Heckuva job, guys.
Ready for seconds? Check out the rest of our Banksgiving content by clicking here!