Five Economic Predictions To Bank On

AP Photo; Reuters Geithner will be out. Dimon will be in. And Glass-Steagall will make a comeback. Charlie Gasparino on the people and issues that will shape 2010’s financial future.

I don’t think it does anyone any good to read another Top 10 list that puts Goldman Sachs' bonuses and its CEO, Lloyd Blankfein, the man who does God’s Work, as movers and shakers we should all be watching in 2010. So with that in mind, I tried to come up with people and issues that don’t necessarily fit neatly into the mainstream media’s vision of future importance, but in my view, will play leading roles in the economy going forward. They are listed here in no particular order, and, I might add, I’m breaking with tradition in another way by doing a Top 5—because the last five in most lists rarely come true.

Congress will demand that heads roll, and the man in charge of implementing the $800 billion stimulus program should be the first head to roll.

At the end of 2009, Moynihan took a job that no one wanted. After Ken Lewis’ surprise announcement that he would resign as the head of Bank of America, BofA’s board spent the next three months trying to find a successor. Moynihan, an attorney by training, was a dark horse, but emerged as the pick after an outside candidate bowed out, and New York Attorney General Andrew Cuomo signaled that the leading internal candidate, Greg Curl, wasn’t fit for the job. (Cuomo is investigating BofA’s sloppy purchase of Merrill Lynch during last year’s financial crisis.) Now it’s up to Moynihan to steady a massive bank that is saddled with billions of dollars in possibly problematic loans, and of course, the legacy of its ill-fated purchase of Merrill Lynch. Moynihan recently looked shaky before a congressional committee investigating the merger, but if he can continue to repair the balance sheet of one of the world’s biggest banks, one that regulators consider “systemically important,” he will do a lot to help the banking business recover. If he can’t, he will be categorized along with Citigroup CEO Chuck Prince as one of the goats of the banking business.

You won’t find a straighter shooter than Rep. Peter King (R-NY), who, in an era where political correctness warps our thinking on a daily basis, speaks his mind about simple truths. (Remember his outrage at the insane, over-the-top glorification of Michael Jackson after his recent death?) Last summer, King took a lot of heat for declaring that health care was “not a major issue.” His point was that real Americans are more concerned with jobs and the economy. King also sits on the Homeland Security Committee and the Intelligence Committee, which will make him a nettlesome critic of President Obama and his approach to fighting terrorism (the administration treats terrorism as a crime rather than a military threat), particularly as the 2010 mid-term elections near.

There was once a time when banks that had federally insured deposits couldn’t be merged with investment banks that like to take massive risks in the bond market. That all ended in 1999, when Congress ditched the Depression-era Glass-Steagall Act, allowing such behemoths as Citigroup to be created before they were awash in oceans of red ink and government aid. Hundreds of billions of dollars in bailout money later, there is a debate among smart financial types, including presidential economic adviser Paul Volcker, to bring back Glass-Steagall, and end the absurdity of taxpayers financing the risk-taking of the these combined institutions. My sources tell me Volcker isn’t getting much help in the Obama administration to bring back the law—keep in mind both senior economic adviser Larry Summers and Treasury Secretary Tim Geithner are acolytes of one of the chief architects of Glass-Steagall’s demise, former Treasury Secretary Robert Rubin—but the debate continues to gather steam among academics and in the press, which should give Volcker, the former Fed chairman who defeated inflation in the late 1970s and early 1980s, a strong incentive to keep pressing his case.

View as Single Page 12 Back to Top January 3, 2010 | 10:35pm Facebook | Twitter | Digg | | Emails | print Bryan Moynihan, Charlie Gasparino 2010 Predictions, 2010 Predictions, Rep. Peter King, Glass Steagall, Jp Morgan Chase, Sandy Weill, Timothy Geithner, Robert Rubin, Bank Of America, Money, Paul Volcker, Larry Summers, Citigroup, Economy, Lloyd Blankfein, Ken Lewis, Jamie Dimon, Merrill Lynch, Goldman Sachs, Wall Street (–) Show Replies Collapse Replies Sort Up Sort Down sort by date: tgorty123

Gasparino, you are hack, plain and simple. "The administration treats terrorism as a crime rather than a military threat." Really? Is that the best you can do? If you want to be taken seriously you'll have to do a lot better than that. Better luck next time.

Charlie, I guess tgorty123 needs you to declare "tingling sensations up and down your leg" before he/she takes you seriously. I suppose reading airplane bombers their miranda rights and trying gitmo detainees in a NY court just shows how much of a "hack" you are. Or maybe you're not a hack and people just need open their eyes and stop drinking the "fruit" flavored water flowing from Washington.

"His point was that real Americans are more concerned with jobs and the economy." "Real Americans" apparently all have health insurance,don't ever get sick, and never have their insurance rescinded. What a louse!

Another in a never ending stream of Gasparino's dreck... Yes, deregulation has turned Wall Street into a white collar casino and we desparately need new, strong regulation to tame the mindless, aggressive financial services types whose only concerns are their next multi-million bonuses--not the soundness of their business decisions. Whether Glass-Steagall, passed in the 1930's, is the answer is debatable. The economy is a complex, intricate subject. It is highly doubtful that the current crop of attention-seeking, power-grabbing legislators whose sole concern is their own relection are equipped or inclined to tackle it in any meaningful and effective way, beyond, perhaps, reinstitution an old law that they never should have rescinded to begin with. Like Gasparino, King is an attention-seeking gas bag--all flash, little substance. A excellent example of someone who is primarily out to make a name for himself. Gasparino loves King--and why not? It's like looking in a mirror for ol' Charlie. I wish Brian Moynihan luck at BoA. Let's hope he's a more business saavy than the last lawyer to head of major financial institution. It took the late, great Chuck Prince less than three years to run Citi into the black hole from which it seems unable to emerge. And as to the Geithner/Dimon "observation"--Geithner had done pretty well in an abysmal situation, regardless of what Gasparino says. And at this point the President doesn't seem interested in replacing him. Dimon is a smart, smart man with all the credentials to succeed as Treasury Secretary. Would he take it on if asked? Who knows? While he certainly is fascinated by economics and business and is a thoughtful, analytical and demanding executive, I wonder how well a guy who is accustomed to being in control and making things happen would adapt to academia. And let's face it, with the bozos in Congress that the Treasury Secretary had to deal with regularly, a gig at the Treasury Department wouldn't be much better.

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Tina Brown is the founder and editor-in-chief of The Daily Beast. She is the author of the 2007 New York Times best seller The Diana Chronicles. Brown is the former editor of Tatler, Vanity Fair, The New Yorker, and Talk magazines and host of CNBC's Topic A with Tina Brown.

Charles Gasparino is CNBC's on-air editor and appears as a daily member of CNBC's ensemble. He is a columnist for The Daily Beast and a frequent contributor to the New York Post, Forbes, and other publications. His new book about the financial crisis, The Sellout, was published by HarperBusiness.

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Five Economic Predictions To Bank On

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