"They" Made Me Chase Sub-Prime

Dennis Berman's "Mea Culpa: When Wall Street CEOs Say Sorry" does us all a nice favor by stacking side-by-side the recent whimperings of Wall Street CEOs, and asking us to try to match six banking bosses with their assessments of their own credit-crunch woes.

And while Berman's selections obviously don't represent every comment the CEOs have made on the troubles, they do reflect how each boss chose to address the disastrous quarter in his company's earnings release, which is usually considered the core communication of a public company's disclosure efforts. Collectively, the six quotes reflect astounding homogeneity, particularly in their lack of acknowledgement that the banks' own decisions had anything to do with those troubles.

Parsing for pure pleasure, Jack Flack offers the following translations as a bonus. (If you want to see you how do with Berman's quiz, go there first, as spoilage follows below.)

Josef Ackerman, Deutsche Bank: "Despite a challenging quarter for our investment banking franchise, our 'stable' businesses continue to perform well. We see substantial opportunities in investment banking after this period of correction."

JF Translation: "We're eating as much of the loss as we can in the quarter. Most of our other businesses simply do not allow us to act like greedy morons, and thus we're doing fine. We won't make the similar investment banking mistakes for at least two years."

Lloyd Blankfein, Goldman Sachs: "Given the difficult environment of the third quarter, many of our businesses were challenged. But overall, the quality of our franchise produced strong results as clients continue to look to us for advice and execution."

JF Translation: "It's a crazy world out there, and some of it splattered on our shoes. But, hey, we're Goldman Sachs, and we're fine. Our clients don't have anywhere more encouraging to go."

Richard Fuld, Lehman Brothers: "Despite challenging conditions in the markets, our results once again demonstrate the diversity and financial strength of the...franchise, as well as our ability to perform across cycles."

JF Translation: "Our other businesses covered for us. And hey, these things come and go."

John Mack, Morgan Stanley: "[Our] diversification across businesses and regions helped us deliver ROE of 17.2% this quarter, despite the impact of the severe market disruption on some areas of the Firm..."

JF Translation: "It's a small part of our business. Even where we got hurt, it was the fault of a, uh, market disruption."

Chuck Prince, Citigroup: "Our expected third quarter results are a clear disappointment. The decline in income was driven primarily by weak performance in fixed income credit market activities, write-downs in leveraged loan commitments, and increases in consumer credit costs."

JF Translation: "Dang, that smarts. But we only made the same mistakes everybody else did."

Stanley O'Neal, Merrill Lynch: "While market conditions were extremely difficult and the degree of sustained dislocation unprecedented, we are disappointed in our performance in structured finance and mortgages."

JF Translation: "We've never seen anything like this, but we probably should have know better."

While 0'Neal would not comment on whether the "sustained dislocation" would keep him out of next week's game against the Seahawks, his quote does come closest of the the six in actually insinuating accountability. In fact, his full full statement does hint that his company's decisions may have had something to do with the problems.

O'Neal: "We can do a better job in managing this risk, as we have done with other asset classes, including leveraged finance, interest rate and foreign exchange trading, equity trading, principal investments and commodities."

JF Translation: "We got rid of the guys who blew it. But look at all the other places where we didn't screw up."

How much credibility would have gone to the bank CEO who said something like this?

"We pushed beyond the edges of our own good judgement. The damage was real, but limited, given the soundness of our other businesses. We've obviously learned from this, and we've already informed our clients that we are already taking the actions that will prevent us from going down a similar path in the future."

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