To a degree, I hear what he's saying. As I've mentioned before it does seem strange that despite everything we witnessed from the "too big to fail" crowd, they've walked away from the crisis pretty much unscathed. Sure the bonuses were trimmed a little, but hardly back to what their value should be compared to every other industry. If anything, those banks are now even larger, so the "too big to fail" issue is more of a problem today than it was before the crisis.
One of the few targeted companies in the crisis fallout has been run by a brown-skinned CEO who had created his own company that is small compared to the big players. The losses there were in the low tens-of-millions which is a lot until you compare that to the established players on Wall Street and their losses. There's obviously something seriously wrong with the law if the old boy network of Wall Street can protect you from such a global failure. But hey, that's why "respected" politicians retire and become lobbyists. They get to write the law to give their deep pocketed friends a free ride. So as easy as the laws are today, imagine what the former political leaders are doing to the Wall Street reform. Now *that* is clubby.
To that end, the ex-CEO of Washington Mutual may have a point. But then again, I didn't hear him complaining much about the $25 million he made in the final year as the bank fell apart. How "severe" were the feds with the bank in reality? Did he pay back the tens of millions that he made on bad deals that had little hope of ever surviving? He should be kissing the ground and thanking those "clubby" folks for helping to write easy laws that keeps people like him out of prison for running such a mess of a company.
The panel's 18-month investigation found that WaMu's lending operations were rife with fraud and that management failed to stem the deception despite internal probes.
Killinger rejected that conclusion. He argued that even before the crisis struck with force, the government treated WaMu unfairly. He noted it was excluded from a list of large financial firms whose stock couldn't be sold short under a temporary government ban in July 2008.
In short-selling, traders bet a stock price will drop and use borrowed shares to profit from any decline.
"For those that were part of the inner circle and were 'too clubby to fail,' the benefits were obvious," Killinger said. "For those outside of the club, the penalty was severe."
