Dimon, Lewis and Mack Save the Rec Center

[youtube=http://www.youtube.com/watch?v=pspmBbbOHh8]

Watching the big banks’ money-raising efforts come to fruition over the last several weeks, one cannot help but think of the happy endings of several 80’s movies that made a deep impression on me in my formative years.

Breakin’ 2: Electric Boogaloo comes to mind.  Never mind that the film was robbed of an Oscar in the year of it’s release; it is a classic, a thinking man’s journey into the nuances of the Reagan-era breakdancing scene.

The plot of the movie centers around an inner-city dance crew and their quest to raise enough money to save their community rec center, Miracles.  A privileged white girl named Kelly shows up with enough heart, determination and funky fresh dance moves to help save the day.

The climax is a talent show put on by the dancers and rec center kids with a giant fund-raising “thermometer” posted behind them to indicate to the crowd (and the viewing audience) how much has been raised thus far.  As money comes in, the red level of the thermometer rises.

Now, Jamie Dimon, John Mack and Ken Lewis are not exactly wriggling around on the ground or wearing mesh shirts, neon pants and fingerless gloves, but their fund-raising prowess must be respected no matter what.  Almost as much as the poppin’ and lockin’ prowess on display from Turbo, Ozone and Kelly when they hit the floor.

Most of this cash came in the form of secondary offerings and it should be noted that for shareholders, these offerings have been successful by virtue of the fact that the prices haven’t been violated in the aftermarket, for the most part.

According to Reuters, over $18 billion has been raised recently by the major banks in their effort to repay TARP.

JPMorgan sold $5 billion of stock, Morgan Stanley $2.2 billion and American Express Co $500 million after the Federal Reserve on Monday imposed capital-raising requirements on large lenders hoping to repay bank bailout funds.

But before you go cheering them on with the same enthusiasm with which you rooted for the salvation of Miracles, don’t forget why they are hustlin’ so hard at this juncture:

Compensation.

No, that’s not just one issue, that’s pretty much the only issue.  They can’t hire and recruit while being restricted on pay by DC and if their peers can, they are toast.  They also can’t reinstate perks or bonuses and the other swag that makes life bearable for them while under Uncle Sam’s thumb.

I personally don’t care what the motivation is, as I’ve said since the first bank stepped up to pay off the TARP, congratulations. 

The sooner the taxpayer is extricated from the banking sector, the better…just don’t forget about our warrants!

Sources:

Banks Flee the Fed (Reuters)

Full Disclosure: I currently manage accounts that are long JPM and MS.  My commentary here is not an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.