Punishment in hardball form

Long-term rates have continued a modest retreat from the December highs, 10-year Treasurys to 3.67 percent, mortgages sliding toward 5 percent.

Further improvement depends on Fed Reserve and Treasury policy regarding 1) their desire to get the Fed out of the mortgage-backed-securities-buying business, 2) the embalmed state of Fannie and Freddie, 3) private markets closed to mortgages, and 4) the slowly collapsing theory that housing and the economy are in self-sustaining recovery. A financial-market accident somewhere would do the trick, too.

New economic data are weak. The National Federation of Independent Business small-business survey declined broadly in December; consumer credit continued its freefall, off $17 billion in November, triple the forecast drop; and December retail sales, which were expected to rise, instead fell 0.3 percent.

My wife, Bronx-born, high-risk labor and delivery registered nurse, given to the brisk speech of her workplace, is as non-political as I am a news junkie. Perhaps once a month she has something to say about that world. Something ... firm.

"These bankers and their bonuses are disgusting."

I began to explain the private-partnership history of investment banks, their very low salaries, and end-of-year divvying-up the pot into bonuses -- commissions, really.

Dinner and tranquility seemed a better idea. However, getting a close-hand load of citizen anger helped me over the gulf between the days of dignified partnerships (a few remain: Lazard Frères, Warburg Pincus, Brown Brothers Harriman, the Rothschilds -- none connected to this disaster) and modern, giant, public-company looters.

Four top bankers this week faced the Financial Crisis Inquiry Commission and its barrage of puffballs. Be damned glad it was not a half-dozen of my wife's co-workers, practiced at deflating physicians. The FCIC panelists are too ignorant of Wall Street to grill the bankers on details.

Worse, the panel has no clue that investment-bank CEOs tend not to debate, appear incapable of losing self-control, and may answer smiling, earnest and expertly evasive at any length until you go away.

Unless and until you play hardball. ...CONTINUED

All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.