There was something odd in the renewed reports last week that JPMorgan Chase Chairman and CEO Jamie Dimon was headed for the top job at the Treasury Department.
For one, it was unclear what President Obama would gain. Sure, his current secretary, Tim Geithner, got beat up (again) on Capitol Hill, mainly for allegedly being too close to financial services big shots. As the former president of the Federal Reserve Bank of New York, Geithner is also criticized for playing an instrumental role in last year's bailouts.
But Dimon, a longtime Democrat, is undoubtedly closer to the industry, and he is the beneficiary of government support, both outright, in deals for Bear Stearns and Washington Mutual.
So it seems unlikely a Dimon nomination would do much to tamp down populist anger against banks or combat charges that the Obama administration is not doing enough to rein them in.
It is also unclear why Dimon would want the job (which he probably doesn't). He currently heads of one of the few large banks weathering the crisis well, and becoming Treasury secretary can hardly be considered a coup these days.
Two of the last four — Paul O'Neill and John Snow — flopped, and Geithner's predecessor, Henry Paulson, is widely panned for the massive government intervention he championed. What's far more likely is that Dimon stays where he is and Obama, if he really is looking for a Treasury replacement, seeks one with few ties to the financial services industry.
In Good Standing
At least for now, Geithner appears to still be on the president's "A" list.
He was one of several financial services luminaries invited to a state dinner hosting the prime minister of India, Dr. Manmohan Singh. Also on hand were: Senate Banking Committee Chairman Chris Dodd and his wife, Jackie; Treasury Deputy Secretary Neal Wolin; Diana Taylor, the former superintendent of banking for New York; the White House's chief economic adviser, Lawrence Summers; and Penny Pritzker, a co-owner of Superior Bank, which failed in 2001.
Rough Day in Court
But how do you really feel?
OneWest Bank's treatment of two distressed Long Island homeowners was "harsh, repugnant, shocking and repulsive," wrote Suffolk Judge Jeffrey Spinner wrote in a ruling against the Pasadena, Calif., lender this month.
Lest that leave room for doubt, Spinner also called OneWest's conduct "inequitable, unconscionable, vexatious and opprobrious," The New York Post reported last week.
And those were just the insults. For OneWest, Spinner's ruling also contained an injury of $525,000, as the judge canceled all the mortgage debt that Diane Yano-Horoski and Greg Horoski owed on their East Patchogue home.
The ruling came as part of a court settlement conference that Yano-Horoski requested, after a foreclosure on her home was approved last January. According to the Post, "Spinner excoriated OneWest for repeatedly refusing to work out a deal, for misleading him about the dollar amounts at stake in the case, and for its treatment of the couple over months of hearings."
OneWest, which bought IndyMac Bank this year, resisted the urge to respond in kind. "We respectfully disagree with the lower court's unprecedented ruling and we expect that it will be overturned on appeal," it said.
Who's the Turkey?
Bankers may be pleased that lawmakers are having trouble passing regulatory reform legislation, but they should try not to gloat about it.
That was the take of Dana Milbank, who savaged the American Financial Services Association in a column entitled "Bankers making turkeys out of taxpayers" for The Washington Post last week.
Milbank pointed to an AFSA conference call led by Bill Himpler, its head of government affairs, who Milbank said seemed entirely too happy with Congress' difficulty in passing reform, including legislation to create a new consumer protection agency.
He also criticized an argument from Chris Stinebert, the head of the AFSA, who warned that a tough reform bill could introduce uncertainty at a time when markets are still fragile.
"To put it another way: Don't regulate us now because the economy is still suffering from the mess we made because we weren't regulated the last time," Milbank wrote.
"Chutzpah, it appears, is recession-proof."