HANKY PANKY & THE MEETING OF THE NINE

October 13, 2008

A sudden flash on the screen alerted the air traffic controller at Reagan National Airport in Washington, D.C., that she was going to have to jockey her incomings to accommodate eight corporates: seven via JFK in New York and one by way of CLT in Charlotte. There was also a third party coming in on a commercial airliner from San Francisco, California.

Of the 177 souls on board that flight, only the arrival of one seemed to garner any interest: Passenger 4B was to be escorted from his business class seat directly to a private airstrip.

The order came from on high and so she jockeyed the eight sleek, white corporate jets and was forced to bump an international flight into standby to land the Boeing from the West. She aligned them over the nation’s capital and into sequential landing patterns. One after another they streaked down from the sky to walk among mortals.

The mood across town in the hallowed halls of the United States Department of Treasury was somber. Hanky Panky stood staring out of the window of his office, blind to the view before him, dreading what the day would bring, pondering how he had come to be here – now, presiding over what the mainstream media dubbed “The Second Great Depression.”

After a brutal summer in markets, Hanky Panky had gone hat in hand to The Hill.  On bended knee he asked, and sure as shit, he’d had to scare the hell out of them.

Congress authorized a big check, a Bazooka of a check, that he’d hoped never to have to use, but hope dies on the rocks of reality every time.

So here he was, an “interventions.” The word made his skin clammy and caused his already roiling stomach to heave.

Hanky Panky broke from his reverie as a black bird coursed overhead.  An avid bird watcher, he couldn’t identify kind at this distance. Maybe it was a crow. Possibly a vulture. The latter was less likely he thought, but more apropos.

He needed his binoculars to tell, but there wasn’t time.  His team would be in shortly and the bankers were set to arrive within the hour.

Bankers. Wall Street bankers. He thought with an unconscious shake of his head.  Fiscally irresponsible. Morally corrupt. Overpaid artful dodgers who had taken the benign idea of home mortgage securitization and morphed it into a nine headed hydra.

Now Hanky would attempt to slay that dragon, by staunching the bleed, instilling confidence in fragile markets with decisive actions. He had a proposal, but it was a proposal no one was going to like.

A knock sounded on the open door behind him, pulling Hanky Panky from his decidedly pessimistic thoughts. He did not turn but shifted his gaze from the scene outside to the reflection in the bullet proof glass. His assistant, Clarity North, leaned in and announced, “They’re here.”

Yes, they were here. He heard their footsteps on the cold marble of the hall floors before the sound was softened by the carpet in his exterior office. Excited voices bounced off the walls, drifted down the quiet corridor. The sound was harsh and intrusive given the solemnity that was the United States Department of Treasury.

Hanky Panky glanced down at the newly printed one dollar bill in his hand. The Federal Reserve Note Series 2008 had just come off the press and still bore his signature. He tried not to think of the: 700 billion – that would follow.

“700 billion dollars!”  A voice that he knew to be Tim-Tim’s bellowed with a kind of awe. “I still can’t believe he got Congress to cave so quickly.”

“It was masterful,” Benji the Buddha mumbled.

“Fire and brimstone talks tend to get things done,” Shelly Bear added.

“No write downs. No haircut.” Tim-Tim crowed.

Hanky Panky knew that if the three members of his team were in his outer waiting room the fourth was there as well.

Johnny-John was a laconic man who spoke infrequently and tended to blend in. Like background music – listened too, but rarely heard.

At first Hanky Panky thought it was admirable, Johnny-John being contend to allow key players to take center stage and dominate the spotlight – especially with so many egos – but lately he’d started to suspect that Johnny-John was so quiet because he hoped that when this chapter in American finance was written, maybe history would’ve forgotten he had even been in the room.

Shelly and Tim-Tim continued their verbal sparing. He needed to keep a close eye on the infighting. When they faced the bankers his team needed to be a cohesive unit.

Shelly continued, making her point. “… let capitalism do what it was intended to do. Reward the strong and destroy the weak.  Maybe we need a good old Darwinian flush, because this bailout--“

“Stop calling it a bailout!” Tim-Tim urged. “We have to do something. It could’ve led to sy-systemic risk,” Tim-Tim stammered over the word.

And still could. Hanky Panky thought. As they filed into his office, he turned to greet them. They were his A-Team, but for Hanky Panky, “A” stood not for par excellence, but Armageddon: Team Armageddon.

His team consisted of: Benji the Buddha – the professorial chairman of the Federal Reserve, with his enigmatic barely there Mona Lisa smile.  Shelly Bear - chairperson of the Federal Deposit Insurance Corp. (FDIC), was straight talking and no nonsense. Tim-Tim - president representing the New York office of the Fed, was preternaturally youthful-looking and oozed a hand wringing earnestness. Johnny-John - Comptroller of Currency, was straight backed, stern faced, and silent.

Hanky Panky had faith in his team to weather the crisis, but others did not. Some thought the revolving door between Wall Street and Washington was a sign of something nefarious, so no notes would be taken at the meeting with the bankers.

Clarity had typed up a few talking points, but other than that, and of course, the nine proposal letters of intent drawn up for the banker’s signatures, it would be a Black box meeting.

When Hanky Panky blinked back into the moment at hand, he found the A Team staring at him. He couldn’t keep taking these mental scenic routes, he needed to stay in the here and now. And right now Shelly was saying something.

“What?” Hanky Panky asked.

Shelly could be so dramatic – a bull of a woman really – but she knew her stuff. And when she talked - he listened.

“I said,” she began. “I think we need to talk optics.”

Shelly motioned out of the window that overlooked the Harrison Street gate, where media trucks were double and triple parked. “I think it’s time to bring in help.”

“She means leak it,” Tim-Tim said.

“Don’t tell me what I mean,” Shelly barked then turned to Hanky Panky and conceded. “I mean leak it.”

“I don’t know…” Hanky Panky hedged.

“We could leak it to the friendly press,” Benji suggested.

“Who would, with some prompting, add just the right amount and kind of spin,” Shelly offered. “We could control the message.”

“Leak it! Leak it! Leak it!”  Tim-Tim cried, as if the decision was his own.

Shelly rolled her eyes at Tim-Tim’s nervous tic, then said, “We have friendlies at the newspapers and on network.”

“We do need markets to response positively,” Johnny-John put in.

“There’s Eve Leakman over at BSNBC,” Benji suggested.

“Leakman is a hack,” Hanky Panky cried.

“Exactly! She’ll push a full court press of good spin,” Tim-Tim mused. “We could try to get her to bill it as a sort of, ‘The committee to save the world. Part Two."

“I like that,” Benji said, with stars in his eyes.

They were referring to the February 1999 cover of Time magazine featuring then Fed Chairman, Secretary of Treasury and Deputy Secretary. The article highlighted how the actions of the trio had “saved the world.”

Hanky Panky doubted his Time’s write up would be as fawning with flattery.

“Fine,” he agreed. “We’ll reach out to Leakman right after the meet, but I’m only going on record as a ‘person familiar with the matter.’”

“S-speaking of the meeting, how are we handling this?” Tim-Tim asked. “It’s not like we can force the bankers to take the money.”

“Yes we can,” Hanky Panky contradicted with ruthless intent.

“They don’t just have to take the money,” Tim-Tim argued. “But we need them to want to take the money!”

“The company line never changes, does it Tim-Tim,” Benji quipped, as salty as Lot’s wife.

Tim-Tim blanched - soundly silenced by the insult.

Ouch! Hanky Panky thought. As he watched Tim-Tim take a shutter step toward the older man, he thought the likelihood that the academic and the policy wonk would actually come to blows was minuscule, but you never knew.

It was probably a good idea to diffuse the situation.

Hanky Panky realized that for his team to draw together they needed a common adversary, so he said, “The bankers will be here shortly.”

In order they came: Jimmy “The Jock” Jewels, CEO of MJ Porgan, Viktor “The” Bandit, CEO of Town Team, Bob “Bob-O” Karen from Bank of the Big Apple, Boyd “Binky” Blankstein from Soldman Bachs, Mic “The Dick” Mac from Sorgan Manley, Roger “Moulin Rouge” Rogue from State Road, Dennis “The San Francisco Menace” Bovacevich from Fells Wargo and Jack Blaine current head of Lerrill Mynch,

They were only waiting on Denny “The Charlatan from Charlotte” Louis, Chairman and CEO of Bank of the American Way. At ten to three the grandstander finally waltzed in, rounding out of group, tossing apologizes like confetti made from three dollar bills for his tardiness.

“This way, gentlemen,” the Treasury clerk said, ushering them down the hall and into a large conference room. “You can wait here. Mr. Panky will be with you shortly,” the clerk said, then withdrew.

The bankers took their assigned seats.

With so much in common the rivals had little to say to one another, so the nine men sat in silence awaiting the arrival of Secretary of the Treasury.

The knobs of the double doors turned and a Treasury staffer swept them open wide. The bankers watched as the A-Team approached, striding along the corridor toward them with a certain amount of The Right Stuff swagger. Hanky Panky leading the way, the others members of the A-Team behind him, dourer faced and grim:

The bankers didn’t know if they should stand, applaud, or genuflect. They decided collectively – it seemed, to sit and wait.

This was Hanky Panky’s show and it was show time!

Hanky Panky waited until the doors swept shut soundlessly.

Although some of the bankers would later claim that in that silence they heard the scrap of the bolt sliding into place – barred the door.

Towering over them, Hanky Panky favored the men with one of his weird grins. “I trust you’ve had an enjoyable weekend.”

The bankers squirmed, uncomfortably in their seats. They knew he had not invited them here to inquire about their weekends.

Just as quickly his smile vanished. “Gentlemen… I would like to thank you for coming down to Washington on such short notice…”

As if they’d been given a choice. The bankers thought.

“Benji, Shelly, Johnny-John, Tim-Tim and I have asked you here this afternoon to invite you to be part of the solution.”

“The solution,” Roger Rogue said, warily. “To what?”

“To what you’ve done,” Hanky Panky accused, leveling his hooked pinky finger at each of them in turn. He went on to explain that while no one would publically give voice to the notion that a total collapse of world markets was possible or concede that the fault may lie with the men sitting in this room or the leagues of their minions set forth to do their bidding, that outcome was still possible.

This was not the time to point fingers, he said, and many had better hope the time for finger pointing never came.

“We can’t keep playing crisis whack-a-mole,” Tim-Tim put in.

“And I’m sure you have better things to do than spending every other weekend trapped in a conference room, eating takeout, and murder-boarding the latest crisis,” Shelly added.

“So we need to foam the runway,” Tim-Tim told them. “Lots and lots of foam.”

Mic Mac glanced up at Tim-Tim then demanded, “What the hell is he talking about?”

“To solve this problem we need to throw a lot of money at it. A wall of money! A tsunami of money! An avalanche of money!” Tim-Tim was babbling now, as his voice rose to a crescendo.

“We have a proposal for you,” Hanky Panky announced, calmly.

“What kind of proposal?” Dennis Bovacevich asked with squinty accusing eyes.

“Your nine firms represent a significant portion of our financial system…” Hanky Panky said then swallowed hard and continued. “You are part of the problem, therefore you will be part of the solution.”

“What does that mean?” Bob Karen asked.

Hanky Panky nodded to Tim-Tim who opened a folder and passed a single sheet of paper across the table in front of each of the bankers.

“What’s this?” Mic Mac asked.

“We’re come up with a three part plan,” Hanky Panky continued. “Improve liquidity, guarantee new issues of senior liability and the purchase of preferred stock in banks and thrifts.”

Denny Louis frowned then posed the question that was on all of their minds. “Are you talking about—“

“Capital injection.” Hanky Panky confirmed. “We want to take a stake in your banks, in the form of 125 billion dollars.” To the stunned faces on the other side of the table he added, “We’ll take questions.”

A hush and a pall fell.

The bankers turned shocked expressions toward each other then found their voices and erupted with questions, concerns, and outright refusal – one riding over the next.

“Quiet!” Shelly yelled into the chaos. When calm returned she said, “We will take your questions… one at a time.”

Hanky Panky thought the potential failure of these once glorious financial giants should have left the CEOs all quaking in their imported Italian leather loafers, but all he got was grumbled and gripped, and he was trying to help them.

“This is that TARP money,” Jack Blaine observed.

“Yes,” Hanky Panky confirmed, expounding on the program and revealing the amount of money each of the banks would be provided.

“We don’t want the money,” Dennis Bovacevich said, shaking his head.

“You’re giving MJ Porgan more money,” Viktor Bandit balked.

Jimmy Jewels turned to glare down the table at him, “Why don’t you mind your own business and take care of your own troubled assets.”

“We don’t want the money,” Dennis Bovacevich called out.

“What are the conditions?” Binky Blankstein wanted to know.

Hanky Panky almost smiled.

“We don’t want the money,” Dennis Bovacevich stood up.

“We heard you one trick pony,” Roger Rogue snapped.

“I don’t need the money!” Dennis Bovacevich reiterated. He eyed the other bankers who he clearly thought were part of the problem. “Maybe some of these guys need the money, but Fells Wargo is fine.”

“Opting out is not an option,” Tim-Tim said.

“You all need to take the money,” Shelly hardnosed.

Tim-Tim, who appeared to be sweating bullets, his graying-at-the-temples head full of hair matted to his scalp.

Either Tim-Tim didn’t understand Treasury’s authority or the extent to which Hanky Panky was willing to go to get his way, because he really seemed to believe they could refuse and so launched into a sales pitch of dread.

“The American public hates bankers, Tim-Tim said. “They—“

“Here we go. More pitchforks and propaganda,” Dennis Bovacevich interrupted.

Actually, it was true. Hanky Panky thought. Americans had grown to despise an entire industry.

Tim-Tim continued trying to convince the men across the table, “If we don’t save you, give you billions of taxpayer dollars, you’re–“

“You’re taking the money,” Hanky Panky said with quiet conviction.

“Or… what?” Dennis Bovacevich challenged.

The mood in the room shifted, plummeting from chilly to subzero, as Hanky Panky turned his frosty gaze on the banker from the West.

“Boys,” Denny Louis cajoled with a level calm.

Pausing for dramatic effect, the Secretary of the Treasury looked at each of the bankers in turn then reached for his prepared statement, “… if a capital infusion is not appealing you should be aware that your regulator will require it in any circumstance.”

The bankers watched as Hanky Panky motioned to his A-Team, their regulations.

"You can take the money and save the banking system or you can refuse…" Hanky Panky trailed off and let each man come to his own conclusion about what refusal could yield.

The threat was implied and real. Sign your names on the dotted line or I’ll huff and I’ll puff and I’ll imply subtly on the Sunday morning shows that your banks are capital deficient.

Dennis Bovacevich glared, but did not say another word. If looks could maim Hanky Panky would be severely wounded.

“Gentleman, please,” Denny Louis soothed. “Let’s do what’s best for the country.”

Mic Mac snatched up the TARP proposal commitment agreement sheet for Sorgan Manley, scrawled his signature at the bottom with flair then flicked the page back across the surface of the mahogany table. “There.”

“I’ve got to call my board,” Binky Blankstein cried.

“Me too,” Jimmy Jewels piled on.

Boards of Directors would be consulted, corporate lawyers contacted, but in truth the deal was done.

At 5:33 pm that evening Hanky Panky stood in the Treasury conference room, the nine signed proposals lined across the table in front of him: 125 billion.

“We’re going to be in front of congressional investigative commissions for decades.”

“I need a drink,” Benji said.

“Drinks all around?” Johnny-John asked.

“None for me,” Hanky Panky said.

The A-Team bee lined for the hidden liquor cabinet in his office. Hanky Panky stood alone.

Clarity leaned in and said, “Eve Leakman on line one.”