Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 3/9) 

Editor’s Note: Liz Peek is a financial columnist and the author of wOw’s SHEconomics. 

Finally! The new underclass – aka Wall Street bankers – has found its Big Boy voice and is pushing back! Tired of the constant bashing they’ve received in the press, from President Obama and from Congress, the heads of our three largest banks crawled out of their bunkers to counter what Citigroup CEO Vikram Pandit called “broad-based misperceptions” about their companies. It’s about time. Since the financial industry has continually led the stock market down over the past year, and since the new administration has looked especially clueless in its efforts to remedy the sector’s problems, investors needed to hear from the folks that actually know what’s going on inside the banks. They did, and they celebrated.

Three days do not a bottom make, but it was certainly comforting to see that the stock market remembered how to go up. After weeks of steady slide caused by bad economic news and worrisome antibusiness signals from the Obama administration, investors were ready to party – at least temporarily.

Citigroup CEO Vikram Pandit got the ball rolling by sending an upbeat memo to employees on March 9, saying that in the past two months the bank had racked up the best profits since the third quarter of 2007. Moreover, he assured the Citihoard that the bank’s capital ratios were adequate. Ken Lewis, head of Bank of America, said much the same in an address to the Business Roundtable yesterday, and even more persuasive were JP Morgan Chase’s Jamie Dimon’s comments made to the U.S. Chamber of Commerce. Not only did Dimon, who stands above the fray for not having fallen so deeply into the subprime tar pit, defend his bank for its commitment to philanthropy and community and the assistance given the government in acquiring Bear Stearns, he also lamented today’s widespread attacks on industry: “When I hear the vilification of corporate America – I don’t understand it. I wish the folks in government would stop it.” Coming from an Obama supporter, the remark had teeth.

Here’s the reality, folks. Bank bashing may be good politics, but it is terrible for the economy. One of the secrets just emerging about Treasury Secretary Geithner’s failure to attract people to his department is that President Obama has apparently made it next to impossible to hire Wall Street types that might actually have the skills needed to weed out toxic assets. That narrows the field drastically. Yesterday, another high-level candidate – Rodgin Cohen, former managing partner of Sullivan & Cromwell – dropped out of contention. So far, Geithner has not hired a single deputy. The lack of staffing is serious – and is crippling efforts to ramp up the Term Asset-backed Securities Loan Facility (TALF) or to produce the fine print on Geithner’s proposed private-public partnership intended to clear underwater assets off bank balance sheets.

Not only is staffing an issue, but investment firms that should be lining up to take advantage of the TALF opportunity – which the government hopes will boost consumer credit – are scared of getting mired in the same quicksand that is hobbling TARP recipients. Chris Dodd’s restrictions on bank pay and John Kerry’s proposed regulations that outlaw any entertaining (even cocoa at Christmastime – really!) have gone too far. The compensation restrictions are already creating a steady exodus of talent from TARP firms to hedge funds and private-equity concerns – and to foreign banks. As Jamie Dimon said of his employees, “The good ones will always get jobs.” So, imagine that you’re desperately trying to right a leaky boat, and all of a sudden you find your best oarsmen jumping ship. Not helpful.