Monday, February 8, 2010

Hen House Safe – Fox In Charge of Security

According to the UK's Financial Times, a “respected financial expert,” Peter Hancock, vice-chairman at KeyCorp, has been appointed executive vice-president in charge of, among other things, AIG's “risk.” According to Times reporter Francesco Guerrera, his new role will “position” him to succeed current CEO, Robert Benmosche. Benmosche is a member of the Council on Foreign Relations. Mr. Hancock is not on any of the lists I have. Can he fill Benmosche's spot at AIG without filling his spot on the CFR?

Certainly, the new “fox” has some experience in risk management. The Times credits him with being one of the inventors, while at JPMorgan, of the credit derivatives that played a dominant role in the current collapse. Mr. Hancock's lieutenants helped protect JPMorgan from the brunt of the collapse. Morgan even gained some advantage from the collapse reports the Times. What a surprise. Those with a suspicious nature might start thinking Morgan set the whole thing up. Personally, I get a distinct scent of the Savings & Loan fiasco that wiped out most of the commercial banks' competition. Anyone have the heart to tell George Bailey that it's not such a wonderful life here in the United Pottervilles of America?

Anyway, Mr. Hancock is apparently feeling remorse for the horrible financial mess into which he's put us and most of the world. He's practically working pro bono on this job. Those “familiar with the matter” says the Times, say he'll only receive a compensation package of up to $7.5 million. Reports are that Kenneth Feinberg, Obama's “pay tsar,” has signed off on the package.

At least with Morgan and Hancock doing so well, those who lost their life savings, their pensions, businesses, homes, and other livelihoods can feel some consolation in knowing not everyone is doing so badly.

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