Position: U.S. Treasury Secretary
Win: Got the job despite tax problems and housekeeper work status issues that should have tanked his prospects.
As president of the New York Federal Reserve when the meltdown occurred, Geithner was there at the beginning of the bailout. He was among the officials who knew on Day 1 that the rescue of AIG would cost more than $100 billion even as his crew announced it would be $80 billion.
When President Obama nominated him to be Treasury secretary, Geithner’s failure to do his taxes properly or account for his domestic help would have tanked his chances during normal times, But the economic situation a year ago was so dire that he got a pass for his shortcomings, as the newly-elected president needed someone who knew the collapse from the inside.
Win McNamee / Getty Images
Position: Goldman Sachs CEO
Win: Goldman Sachs, while now just a bank, remains King of Wall Street
Blankfein showed once again why his firm is regarded as the savviest on Wall Street. Goldman has perfected the art of playing almost every side of the deal and still successfully asserting that it has no conflicts of interest.
Now, Blankfein is showing his genuine sensitivity to the political winds by suggesting reforms of compensation for traders and investment bankers and taking a temporary pay cut himself. What a great move to make his own guys, who turn genuine profits, even richer while forcing his competitors like the hapless Citibank crowd, to have their compensation tied to new performance measures that actually will force more disclosure of their questionable deals.
Peter Dejong / AP Photo
Position: New York State Attorney General
Win: Cop on the beat now the favorite to be governor of the Empire State
Framed by his predecessor Eliot Spitzer and his nominal leader, current New York Governor David Patterson, Cuomo looks like he has the rectitude of a U.S. Supreme Court Justice and the crusading spirit of Thomas Dewey. By picking his issues carefully, such as forcing investment banks to pay back investors in auction rate securities, or calling the question on the Merrill Lynch-Bank of America deal, Cuomo appears to have recovered and shined up the “Sheriff of Wall Street” badge Spitzer left in the gutter. Cuomo’s letter to Congress about Ken Lewis trying to invoke a “Material Adverse Change” clause to back out of the Merrill deal was dynamite.
With so many good political marks during the last year, Cuomo also is burying – as ancient history – his messy divorce and any blame for his part in juicing Fannie Mae and Freddy Mac when they were on his watch as Secretary of Housing and Urban Development during the Clinton era. Cuomo is also so focused that he has largely stopped giving press conferences, except on conference phone calls, so he can avoid shouted-out questions. With call-in press conferences, Cuomo and his aides simply handpick the media outlets they want to talk to and ignore those who displease him.
Mike Groll / AP Photo
Position: CEO & Chairman JP Morgan Chase
Win: Made JP Morgan Chase strongest big bank; sheltered it from Madoff fallout
This onetime protégé of Sandy Weill emerged from the financial scrum as the number one banker in America. He forced the government to give JP Morgan Chase good terms for taking Bear Stearns off its hands and has made the bank stronger, in part by avoiding at least some of the risky businesses that made Citibank so weak.
While Bernie Madoff kept his money at JP Morgan Chase, the bank got out of investing with Bernie and did not disclose to others why it made the move. Still not on the hook for failure to highlight Madoff machinations.
Paul Sakuma / AP Photo
Position CEO, Paulson & Co.
Win: Made some $5 billion betting on collapse
No relation to former Treasury Secretary Henry Paulson, one of our biggest meltdown losers. This previously unsung hedge fund manager made some $5 billion across 2007 and 2008 betting against the banks that were fueling the housing and mortgage-backed securities market. At one point, he was shorting four of Great Britain’s five biggest banks. Did we mention that in early 2008 he put Alan Greenspan on the payroll. We wonder whether Greenspan –in private - was giving this Paulson a much grimmer forecast and more accurate information than he gave the rest of us.
Chip East, Reuters / Landov
Position: Former Lehman Brothers CEO & Chairman
Win: Has escaped prosecution
Dick Fuld, one of the meltdown scapegoats, as a bigger winner. Five words to explain this: “Thank God for Bernie Madoff!”
If I were Richard Fuld, that is what I would be saying every day as I hid out at my pad in Ketchum Idaho, mourning the sale of my wife’s expensive art collection. (“You don’t have a gun,” Fuld said two weeks ago, while opening the door of his home for a Reuters reporters. “That’s good.”) Madoff took Fuld off every magazine cover as the Poster Boy for Greed and Stupidity on Wall Street. Madoff also made it possible for all the “honest” bankers and brokers to say they were not crooks gambling on derivatives with their investors money at 35-1 or worse odds. The cooked-up investment vehicles that Lehman under Fuld specialized in should have been illegal but were and still are not. His hubris and unwillingness to make a deal that devalued his firm helped sink it last Sept. 15th.
But really Fuld is a winner because he and others at Lehman earned hundreds of millions of dollars for years, even though much of the rest of Wall Street could not make sense of Lehman’s profit numbers. Now we know why. Mandel Ngan, AFP / Getty Images
