[Opening drum roll]
The Chinese growth miracle could be spawning its own speed bumps, according to Lloyd Blankfein, Goldman Sachs’ chief executive since 2006.
In China, he said, “you don't have the mechanism of writing off mistakes,’’ he told this general membership meeting of the Investment Company Institute over lunch yesterday.
“So I think when they have mistakes and are finally forced to face them, they’ll be bigger than they otherwise would be, if you were facing them all along,’’ he said.
Case in point: As part of China’s own stimulus program since the credit crisis of 2008, the country recently built roughly 80 airports in one fell swoop, he said.
“Maybe 40 of those are going to be in the wrong place. Maybe 50,’’ he said.
If that were to happen in the United States, and nobody supports them, “they fall apart, you write them off, you fire a million people, you kill the people who made the decision and you move on. There you don’t really know.’’
Which he said, eerily reminded him of what he’s gone through, since 2008.
“Why do I have such a good view of how this process works?” he quipped. “I lived every part of that, except the moving on part.”
Blankfein reserved his best line of the day though for fellow big-bank-credit-crisis survivor Jamie Dimon, chief executive of J.P. Morgan Chase.
When ICI chief executive Paul Schott Stevens pointed out that the sponsor of the luncheon that put Blankfein on stage center was J.P. Morgan, he shot back:
“No one tell Jamie I am eating his lunch.”
[Rim shot, cymbal blast]