For “healthy” banks that claimed they didn’t need no stinkin’ federal help, Goldman Sachs and JPMorgan Chase certainly partook generous portions of the credit facilities the Fed made available during the great panic.
Details of the previously secret bailouts were disclosed Wednesday, as required by the Dodd-Frank legislation. Goldman Sachs, which was heavily involved in the speculation and risky behavior that helped cause the crash, consistently claimed to be strong enough to survive the panic that took down Lehman Brothers. And executives have intimated they needed no federal help.
In fact, according to Bloomberg, Goldman was a regular borrower from the lending facilities. On Oct. 15, 2008, Goldman borrowed $24.2 billion.
So was JPMorgan Chase, led by “America’s smartest banker” Jamie Dimon, who went on to win a sweet deal for Washington Mutual. JPM borrowed $3 billion from the Primary Dealer Credit Facility on Sept. 15 and as much as $5 billion from the TSLF on Oct. 17, 2008. The line of the House of Morgan/Dimon has essentially been that the bank was strong but was pressured by regulators to take part, or was taking part to play well with others. Whatever.
Dimon is featured in a profile in the New York Times Magazine. He defends bank consolidation: “Economies of scale are a good thing. If we didn’t have them, we’d still be living in tents and eating buffalo.”
Today’s Econ Haiku:
Just selling coffee
Won’t give a buzz to Wall Street
More growth more more more