After General Motors (NYSE:GM) Chairman and CEO Rick Wagoner was forced out by President Barack Obama, Wall Street is betting bank CEO firings will be the next shoe to drop.
CNBC's New York Stock Exchange floor reporter Bob Pisani told viewers of CNBC's March 30 "Street Signs" the market's actions, with the Dow Jones Industrial Average (DJIA) dropping as much as 300 points, are reflect, in part,that the government is going to force bank CEOs out as they did with Wagoner.
"Look, the main concern here today is Geithner's comments that some banks are going to need a lot more capital," Pisani said. "And for everybody who says why haven't they fired anymore bank CEOs yet - why hasn't the government done it, wait - they're going to."
"The Street basically believes there are going to be several of them fired at this point," Pisani said. "We don't know who. It may not necessarily be the biggest ones. You may see smaller ones. But the government has set up everything just like they did with the auto companies to basically start dismissing some CEOs of banks now and I think you're going to see that happening and that whole issue is weighing on it."
According to Pisani, although the government is wielding its power in unprecedented ways, it's "good and healthy" because now there some certainty in the market that can be priced in.
"But ultimately all of this is good and healthy," Pisani said. "It's about time they got to the day of reckoning with the auto companies."
David Lutz, the managing director of Stifel Nicolaus, explained the move to pressure bank CEOs out is more of a psychological gesture, since a lot of the CEOs of banks at the helm during the height of what is believed to have caused the financial crisis have already been dismissed or have resigned.
"I think it is probably a headline which is going to make people feel better out on Main Street, but it's not going to do anything as far as Wall Street's concerned," Lutz said. "And possibly quite bigger of a concern Congress should be looking at is the boards of directors at these banks."
The real solution according to Lutz is to clean up the financial institutions' boards of directors.
"You know, you can blame the CEO, but the boards of directors are supposed to be the police on duty," Lutz added. "So I think you know, as we saw with GM - I think you're going to see a lot more board seats might be pressured out by the government and that would ultimately be positive and could have, you know, a longer term effect as opposed to a CEO who might have been in place only for a couple of quarters."
Editor at Large
Comments Policy
Obama did get one thing
March 30, 2009 - 17:15 ET by MidAmericaObama did get one thing right in the campaign when he said:
So what they’re going to try to do is make you scared of me. You know, ‘he’s not patriotic enough, he’s got a funny name,’ you know, ‘he doesn’t look like all those other presidents on the dollar bills.’
Nope he's not like any of those guys honored on our money.
First GM, then what?
March 30, 2009 - 17:17 ET by CKA in Red State USAThis fascistic takeover of our country needs to be stopped. Now.
CKA
March 30, 2009 - 17:25 ET by sherylsimsHow?
Guns and ammo is next, GM was way too EZ
March 30, 2009 - 17:27 ET by upcountrywaterP.R.I.N.T. Money 30 sec YT
They can try
March 30, 2009 - 19:23 ET by JetmoreWhen the time comes that the Obama "Civilian Police Force" comes to my door to seize my legal weapons and ammo I am going to make about 10 job openings. I suspect that there will be a lot of job openings made that particular day for the CPF all over the U.S..
They're getting what they
March 30, 2009 - 17:23 ET by RR GOPThey're getting what they deserve.
And not from an anti-Capitalist standpoint, but because they eagerly waddled, scampered and snorted their way to the feeding trough offered up by the General Secretary and the Politburo.
Faust comes to mind here.
One of the 34% who thinks George W. Bush was a great President. One of the 61% who wants to bring back the stock and pillory (yep...approval for Congress now at 39%...do you believe that!?).
Fire sale
March 30, 2009 - 17:24 ET by Cool ArrowMorgan Stanley today advised investors to sell off their US holdings following the 21% rally ending Friday.
If you got the cash, you might pick up some deals.
I haven't decided yet.
LYDSEXICS UNTIE!
OBAMA = ABSOLUTE DISASTER
March 30, 2009 - 17:31 ET by krendlerThat's all I can say after watching this guy for 2 months. He was vague-beyond-belief during the campaign about what kind of "change" he was thinking of. Remember? That's all we ever heard: Chants of CHANGE, CHANGE, CHANGE. No specifics.
Now that it's too late, we're seeing EXACTLY what he had in mind.
I'm sure Michelle is proud of what he's doing, though.
Can't run a company & need
March 30, 2009 - 17:44 ET by EdhenryCan't run a company & need bailout $$ = failure.
Run a company well & don't need gubment $$ = success.
In US. Failure: you lose your job. Success: you keep your job.
As long as the delineation is made between failed companies and successful ones, no problem with axing these idiots. Bankers couldn't price risk (their primary job) and autos did not make the moves (even the obvious ones) necessary to succeed.
I agree
March 30, 2009 - 18:14 ET by well99I dont want the goverment doing it though.The companies should of canned the clowns along time ago.If you are a regular worker and you dont do the job your out the door.I cant see giving execs a bonus for doing a lousy job but the buisness themselves should of fired them.
His Turn
March 30, 2009 - 17:37 ET by slickwillie2001I look forward to the day when WE the people can fire this President. That day will not come soon enough for me.
look people
March 30, 2009 - 17:51 ET by candanceThink this happened spur of the moment? No way. This was willfully planned. What we see in the news on any given day is the result of what Obama decided weeks beforehand. And at the rate he is moving, God only knows what our country will look like by summer.
April 15 might be too late.
It's All In the Plan
March 30, 2009 - 18:39 ET by northoneThis administration is following the plan book to Socialism to a tee:
1. Create a crisis. Stress there is a major crisis that needs intervention.
2. Have the government take over the means of production. Government shall now control what was once private enterprise.
3. Bye-bye capitalism. Hello, comrades.
God Bless, America (or what is left of it once Obama and his co-horts are finished with it!)
Obama will now guarantee
March 30, 2009 - 18:50 ET by billbObama will now guarantee auto warranties. I can't wait to see the line of cars at the White House waiting for their 15K check up. This will be something to behold and will give us a good idea how he will guarantee our health care. Will he stand behind ALL US auto companies? BMW,Honda,Toyota,Mercedes.
Oops!
March 30, 2009 - 18:51 ET by northoneDear Shareholders in GM (Government Motors):
Following President Teleprompter's announcement this morning, your stock has dropped 25.41%. Oh, dear!
1910 Russia
March 30, 2009 - 19:05 ET by JetmoreCall me crazy, but I didn't know that it was in the states power to seize private industry for the "public good". Such a thing only happens in totalitarian regimes such as- 19-teens Russia, 1920's China, 1950's Cuba etc. Oh wait- my bad, never mind.
Let's take it to an extreme, yet logical conclusion
March 30, 2009 - 19:53 ET by Prester JohnIf BHO can fire the head of a private company that receives federal money, why couldn't he remove the (Republican) governor of a state that receives federal money for malfeasance?
Or wouldn't he at least be able to remove the head of any particular department of the state government (say transportation or agriculture or education) and impose his own stooge to be in charge while removing the authority of the governor and legislature from removing his stooge?
If he can "prove" that a particular department in a state was run improperly, why not dispatch some federal marshals to arrest the head of it if he doesn't resign or perhaps a nice IRS audit would discover some problems?
This would only happen of course if there was a Republican administration with a Republican legislature otherwise he could just put the squeeze on the Dem governor/legislature to do his bidding.
Getting pretty scary out there folks.
Rmmmmm, Rmmmmmmm,,,
March 30, 2009 - 21:06 ET by rightwingidiotAnd the wheels on the bus go round and round, round and round, round and round.
The Obeyme express is warmed up and ready to roll. Just toss 'em in the street. Obeyme will run their asses over. That's one thing he's actually good at.
Where in the law does he have the right to do this?
March 31, 2009 - 05:11 ET by DragonsbreathWe all know about his extensive background in running companies, don't we?
Also whats going to happen when he does this to a company run by the mafia?
Proof Obama is not Jesus. Jesus could actually build a cabinet
Yes, bankers are probably
March 31, 2009 - 12:34 ET by celatorYes, bankers are probably next on the hit list. Next will be "journalists" who seriously question Obama's policies. And soon it will be us. Hope those FEMA camps have electricity and water.
No citizen's right to life, liberty, pursuit of happiness, or property is safe as long as Obama is President of the United States.