Meeting Of Central Bankers, “Godfather” Style
This year, “The Godfather”, celebrates its 40th anniversary since its release date in 1972. One of the best scenes in the original Godfather movie was the meeting of the heads of the Five Families when Don Corleone attempts to settle the war that has broken out amongst the families. Watch scene here. The scene takes place in a New York City boardroom but a little known fact is that right before the scene starts, the camera pans the front of a large, stone building. That building was the Federal Reserve Bank of New York (h/t Dan). We thought it might be interesting to reconstruct the scene and substitute the heads of the Five Families with the heads of some central banks and finance ministries. Don Corleone will be replaced with Fed Chairman Ben Bernanke, Don Barzini replaced by ECB boss Mario Draghi and Don Tattaglia will be replaced with Greek Finance Minister Evangelos Venizelos.
Bernanke: How did things ever get so far? I don’t know. It was so unfortunate, so unnecessary. We had a problem with the CDO’s and mortgage backed securities. And the ECB had a problem with Greece and things got out of control. If Draghi agrees, then I’m willing to let things go on the way they were before. I’m willing to stop with the money printing.
Draghi: We’re all grateful to Don Bernanke for calling this meeting. We all know him as a man of his word. A modest man who will always listen to reason.
Venizelos: Yes, Draghi, he is too modest. He had all the bankers and politicians in his pocket and refused to share them.
Bernanke: When, when did I ever refuse an accommodation? All of you know me here. When did I ever refuse? Did I not flood the markets with cash every time it looked like one of your countries was going to default? Have I not kept interest rates at zero percent for years to help increase the capital of the banks? Have I not increased our swap lines every time there is funding stress in the Euro-zone? Isn’t my balance sheet nearly $3 trillion?
Draghi: Times have changed. It’s not like the old days when we could do anything we want. A refusal is not the act of a friend. Don Bernanke had all the banks and the politicians in New York and he must share them…He must let us draw the water from the well. Certainly, he can present a bill for such services. After all, we are not Communists…
Bernanke: I hoped that we could come here and reason together. And as a reasonable man, I’m willing to do whatever’s necessary to find a peaceful solution to these problems.
Draghi: Then we are agreed. The Greek collective action clauses will be permitted, but controlled, and Don Bernanke will give us protection in the US – and there will be the peace.
Venizelos: But I must have strict assurance from Bernanke. As time goes by and his position becomes stronger, will he attempt any individual vendetta?
Draghi: Look, we are all reasonable men here. We don’t have to give assurances as if we were lawyers.
Bernanke: You talk about vendettas. Is a vendetta gonna bring confidence back to the Greek people? Or confidence back to my investors? I forego the vendetta of the US Treasury. But I have selfish reasons. Geithner was forced to keep issuing US Treasury bonds because of this financial mess. The American people are not happy with him and want him out. All right. The deficit is at nightmarish proportions and I have to make arrangements to bring Geithner back here safely. But I’m a superstitious man. And if some unlucky accident should befall him then I’m going to blame some of the people in this room. And that I do not forgive. But that aside, let me say that I swear on the souls of my grandchildren, that I will not be the one to break the peace that we’ve made here today and I will keep printing money.