About a dozen years ago, I was invited to Sandy Weill's home in New York for a fundraiser for the Alvin Ailey Dance Company. It was a lavish event with about ten couples intermingling with dancers and the program's famous creative director Judith Jameson. The architects of the school building were there as well as Sandy and his wife, our gracious hosts. Later in the evening, we all sat around on giant sofas and chairs and Sandy went around the room getting pledges from all of the guests. The couples blurted out pledges in the millions. He skipped me and my wife as we were not formally introduced but the game was on and others soon came to my office including famous money managers.
Sandy was formidable in everything he did and never settled for second best or mediocrity (he also had a death grip on his glass of wine that made me think if he ever grabbed you around the throat that would be all she wrote). He built Citigroup into a mega-bank that covered everything financial, from nuts to bolts. In fact, one could say the bank was a bunch of nuts and bolts like a giant monster and Weill was Dr. Frankenstein. Well, yesterday the mad doctor said it was time to put the monsters in their own little playpen where they can do limited damage. Investment banking would simply be investment banking while plain vanilla banking would simply be plain vanilla banking.
And the two would never meet under the same corporate umbrella.
Many consider this to be a bombshell. Many consider it to be a turncoat move or the pirate that turns in all his buddies after he's taken the booty. Just think if Michael Jordan came out now and said the crossover dribble is really carrying the ball and should be illegal. Or if Kim Kardashian roared there were too many young untalented girls trying to make a name for themselves and from now on they should have to be able to sing or act, or dance or write or do anything in stage that a parent would be proud of. How could he???? How dare he!!! What the hell has gotten into Sandy? Has he gone soft? Has he lost his mind?
I think the answer is not too dissimilar to what happened to John Roberts. Weill has gone Hollywood with a bunch of new wine-sipping friends in Napa Valley, softening his position while the main stream media continues to make him feel like a crook. Despite giving away half a billion dollars and funding a giant hospital in New York doing wonderful things and savings lives, each story on bankers' corrupt souls probably chipped at his need to be loved by all - especially the intelligentsia. So Sandy has lived it up nicely and this is the rehabilitation process. To each his own, but like Roberts I think public perception played too big a role in their epiphanies.
I must say I'm not sure how I feel about this topic anymore. I know taxpayers should never be on the hook for banks and I know all the new regulations have made those banks larger and loans more difficult for Main Street. So, the idea of another two or three thousand page document that would say commercial and investment banks must be separated is worrisome. Dodd-Frank has created a monster regulator that barely has to obey even the President of the United States. Yes, a monster that Dr. Frankenstein and Sandy Weill could never dream of creating.
A monster that can walk over Congress, push aside the White House and destroy the banking industry along with Main Street in the process.
By the way, Sandy and his wife Joan got that center for Alvin Ailey built and it's wonderful.