Metaphors flying at Wall Street bankers hearing

WASHINGTON (Reuters) - From earthquakes to hurricanes to cars with bad brakes, the metaphors were flying on Tuesday when four big Wall Street bankers were grilled on Capitol Hill.

The venue was a hearing by a blue-ribbon panel specially selected to look into the causes of the financial meltdown of 2008 and whether the bankers had learned their lesson after their companies' lax risk standards sent the U.S. economy to the brink of collapse.

Phil Angelides, chairman of the Financial Crisis Inquiry Commission, saw a used-car salesman at work after listening to the pugnacious, arm-waving Lloyd Blankfein of Goldman Sachs describe his firm's pre-meltdown practices.

"I'm just going to be blunt with you," he told Blankfein. "It sounds to me a little bit like selling a car with faulty brakes, then buying an insurance policy on the buyer of those cars. It doesn't seem to me that's a practice that inspires confidence in the market."

The bankers adopted a "mistakes-were-made" posture while defending their pre-crisis methods as a product of the times and promising to do better since, as they admitted, the Federal Reserve has been watching them far more closely than the Securities and Exchange Commission.

Blankfein, pressed on whether his company would own up to "excessive risk" practices, raised the notion of a rare season of dangerous hurricanes.

Angelides shot him down.

"Having sat on the board of the California Earthquake Authority, acts of God (are) exempt. These were acts of men and women. These were controllable," he said.

Also testifying were executives from Bank of America, JPMorgan Chase & Co and Morgan Stanley.

The commission vice chairman, Bill Thomas, said monitoring Wall Street was like trying to avoid an iceberg in the ocean.

"I said at the beginning that what we've been doing is a lot like an iceberg. You can only see one-eighth of it; seven-eighths of it is underwater as it comes toward you," he said.

Keeping an eye on the proceedings was the White House, where President Barack Obama has been so annoyed at multimillion-dollar bonuses for executives that he is trying to impose a fee on banks to try to recoup bailout funds.

Asked if the Wall Street executives owed the country an apology, White House spokesman Robert Gibbs said, "it would seem to me" that an apology is the least they should offer.

"I think that there are some on Wall Street that seem to believe that nothing has changed and that the American taxpayers provided financing in order to get them back to making risky decisions again," he told reporters.

(Additional reporting by Caren Bohan; Editing by Eric Walsh)