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FBN's Charlie Gasparino on the chance of a break up of big banks next year.
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I -- that while effects college so former CEO of Citigroup sandy Weill's remarks continue to shake up Wall Street bank courtrooms.
How big -- -- and what are banking sex warned about the future Charlie Castro has more for us we parents.
It's kind of interest -- because it's -- -- it's easy take -- anyway I would grain of salt I mean you know kind of -- -- guy.
Has been out of the limelight -- Jamie diamond diamond runs one of these big banks.
And of course all the scandals that occurred on there is rain and then when he left his -- -- -- Basically blew the place up.
That said.
This did these remarks were remarkable in that they affected each and every boardroom at the major six banks where they are now monitoring.
The investor sentiment following that they want to know where that they basically.
Have our our mind to and whether investors are proving to break up model now there's lots of stories in the papers.
About you know it's a tough to break up -- that bright morning and you know famously try to you know talked about how he can't really spin out Merrill.
I am telling you this and you take this to the bank that investors believe these places can be broken up they believe that you can spin out Merrill Lynch and to separate company.
It may not be good.
For you know the bad part of Bank of America which still holds countrywide and you know it stills.
-- those losses -- that sort of us sub prime stuff is hidden in a massive balance sheet but the bottom line is this investors do believe.
That look at all of those all down today.
Those -- -- down on the notion aren't they can't forty.
That's the -- -- investors believe.
That if you break them up that's the only way to at least about -- so that's what's worried about management right now.
They are really -- in debt from investors somewhere along the line these banks stocks are pretty pretty lame if you look at all.
That the only waited to -- and is is a break up and that's what they're worried about and that's what they're monitoring ever since last comments like I said I always thought.
That you know while should be paid for with a grain of salt but he's not be taken with a grain of salt I will tell you this I spoke with a -- assays -- that kind of was an off the record conversation.
He's one of the more -- most recognizable figures in finance today and I said lay out the chances one to ten.
Whether the banks will be broken up -- gave -- -- nine.
99 -- -- said this is.
Although it will be a will be broken up at some point meanwhile huge reorganization -- JPMorgan last week right what do you make about.
-- -- -- No you don't Jamie likes to shuffle -- -- -- -- you know I'm.
-- I -- that the companies offered pretty benign explanation of this it was in the works in the they would doing this for what.
Well I mean no doubt it's a reaction to everything that happened but the elevation of of sayings and and -- not.
You know no doubt I don't know big deal for them I.
I I don't I I don't know if it's afraid of -- -- -- mr.
fix it once again you know put up to another job another promotion for him but I I don't know if it's no doubt I mean I I eight.
You know one thing about a bank where there's no logical successor.
And I think he'll take the London will -- out of it.
Where there's really no quote on quote logical successor you don't see might have -- it's not like that they just.
They don't have the stature of a Gary -- I mean it's pretty obvious that Gary Cohn is you know has been working with Lloyd Blankfein.
And the globe since before the financial crisis during -- financial crisis and now.
A lot of talk about him leaving who has reportedly Friday looks like he is now the heir apparent he's a very experienced guy added that very high level.
You don't really have that they JPMorgan and when you don't have that you're gonna have these sort of management shake ups I bet you.
Let's say in this -- I think Mike Mike Cavanaugh is really Smart guy nice guy.
I that you that we had risen big time doesn't -- guys -- -- -- -- early for -- that they are you letting them it's like of course I would I would bet you ham sandwich of.
They'll do another one of these yeah well.
And do under the -- The assessing -- -- there they -- know what's gonna happen getting back to the bank breakups allows comments it's gonna happen to pull the trigger on this if.
Did you -- if I had you know -- he has a wild card in this whole debate Mitt -- is putting out at some point -- be putting out his response to Dodd-Frank.
-- supposed to come out post.
Good Republican Convention in August August and some -- -- I kind of felt when it is.
You know you have -- out that could be an interesting -- does he hint that it clearly it's a post election issue.
There is an intellectual ground -- -- among congressional staffers talking about this the banks I will tell you this are scared to death.
That's -- you see stories pop up how difficult it is to do all that they are just -- reporters.
You know this stuff and that was how much -- -- to do you know it's you know unscramble -- egg is not easy but remember.
They they like the size of this -- talking to people that.
Want to big.
One they they think it works Jamie Dimon you know.
Is it should -- about Jamie.
He helped create Citigroup not in his defense he he would have managed -- a lot better but you know remembered that was part that whole notion of putting those banks together.
Would -- and -- investment banking commercial banking and looking for synergies between the two.
The once the upshot is that as well the problem with city it's it's the way it's been -- -- well I don't -- I think I I think it's the size two I mean this and they they had.
When they blew out him he left -- lot of the guys who you -- eight for -- went they went to bank one in the there with JPMorgan Chase lead EU.
-- while you know eight -- adding insult to injury just basically.
If this serrated you know a sort of generation of really good managers from irate Citigroup and the second tier led the bank really into a very detonate that said.
You know and I've had this comes as you Jamie.
You know.
It's too big to -- how weak growth keep tabs on everything nobody would predict would -- -- -- a word -- branches and this that and the London -- and.
It's just it's an impossible thing to manage and I think at some point.
There you know investors are gonna say okay it's impossible to manage -- -- -- got Dodd-Frank.
Capra requirements.
Can't do proprietary trading was systemically too big.
We need to unlock value and this is what they're worried about and that's when they'll be prodded to break up not to happen now but it okay happened I think.
And so does is verify which -- guy's name it would give more have always have a commercially tell us and then we'll tell you got thank you know Mike is that.
