Blythe Masters is the most recognizable woman on Wall Street—and arguably its most resilient. At 44, she heads the largest commodities trading operation at the largest bank in the U.S., JPMorgan Chase (JPM). In the mid-1990s she developed and marketed credit derivatives, which rapidly became a new wonder of high finance.
If you're going to have a raucous, costumed march in New York City, Midtown makes for a great setting. Nurses and HIV activists in Robin Hood hats took the streets yesterday, blocking traffic as they called for a financial transaction tax to fully fund healthcare and other public services. Chants of “People, not profits! Medicare for all!” filled rush-hour streets as business-suited professionals dodged through the crowds.
Three and a half years have passed since the afternoon when the stock markets went into a trillion-dollar free fall and just as suddenly reversed course, recovering 80 percent of that loss. It all happened in less than 45 minutes.
On September 15, the fifth anniversary of the collapse of Lehman Brothers, progressives toasted a victory.
True, thanks to Congressional timidity, the biggest banks have only gotten bigger since the financial crisis five years ago, and the men (yes, mostly men) in charge of them are mostly still in charge. But Larry Summers, the architect of a good chunk of the deregulation that set the stage for the crisis in the first place, had withdrawn his name from consideration to be chair of the Federal Reserve, thanks to a populist uprising within the Democratic Party.
Congress resolved the shutdown and debt ceiling crisis (for now) by agreeing to hash out a budget agreement by mid-December. Already, hopes are dim. Budget experts say that if any deal at all is worked out to replace the deep budget cuts that went into effect in March, the most likely outcome will be a short-term plan involving slightly less severe spending cuts—but with no new revenue, a big Democratic priority.
If asked, Americans of all political persuasions will say overwhelmingly that they prefer “tougher rules” for Wall Street. But what does that actually mean?
“We are on strike today to have respect and dignity at work,” says Walter Melendez, one of approximately 40 Los Angeles port truck drivers who walked off the job at 5a.m. morning in protest of alleged unfair labor practices. The strikes featured the rolling “ambulatory pickets” that the truckers have excelled at—chasing down trucks as they leave the port and setting up picket lines in front of them.
Former Goldman Sachs employee Greg Smith wrote an op-ed in yesterday’s New York Times that simmers with pathos. Smith describes the devolution of the culture at Goldman: Whereas in the past, the company worked in the interests of its clients, they are now seen merely as the source of transactional profit, to be manipulated for the benefit of the firm.
Warren Buffett once referred to derivatives as "financial weapons of mass destruction" created by "madmen." Real WMD have rarely been used. However, derivatives are used quite a lot, a $600 trillion per year market dominated by a narrow oligopoly of mega-banks. It appears that Italy got hit by the derivatives WMD in January.
A lesson in how not to reduce gas prices: the White House is backing TransCanada’s bid to build the southern portion of the controversial pipeline Keystone XL pipeline. The section to be built will run from Cushing, Oklahoma to Texas and carry crude oil pumped in the Midwest to refineries in Texas and be completed by late 2013—so it will have virtually no impact on the current high gas prices.
Here we go again. Another round of the game we call Congressional Creep. After months of haggling and debate, Congress finally passes reform legislation to fix a serious rupture in the body politic, and the president signs it into law. But the fight’s just begun, because the special interests immediately set out to win back what they lost when the reform became law.
The derivatives industry is squeezing Washington like a python. Desperate to control the tone and thrust of derivatives regulation, industry lobbyists have been swarming over the Commodity Futures Trading Commission and the Securities and Exchange Commission, each of which is writing derivatives rules as mandated by the Dodd-Frank reform law.
Last summer, a Western Beef store in the East Tremont section of the South Bronx became the first supermarket in the city to receive funding through the city’s Food Retail Expansion to Support Health (FRESH) program. The FRESH initiative provides financial and zoning incentives to entice supermarket chains to build new stores in neighborhoods that lack access to fresh, wholesome foods.
The J.P. Morgan Chase JPM -0.68% & Co. unit whose wrong-way bets on corporate credit cost the bank more than $2 billion includes a group that has invested in financially challenged companies, including LightSquared Inc., the wireless broadband provider that this month filed for Chapter 11 bankruptcy protection.
The full details of JP Morgan’s trading strategy aren’t known, but Wallace Turbeville, a former Goldman Sachs investment banker and currently a fellow with public policy think-tank Demos, doesn’t buy the bank’s explanation that it was simply hedging. “How can you possibly lose that kind of money on a hedge?” he asks. “The answer is, they weren’t off setting risk.
Ahead of Rio+20, advocates are coalescing around the idea that we need to change the way we measure what is important to achieve true sustainable development. Currently countries measure economic growth, which is often equated with progress, through GDP. However, growth in GDP is increasingly not resulting in progress.
The movement has drawn some support from financial circles. Wallace C. Turbeville, a former Goldman Sachs banker who now is a senior fellow at Demos, a public policy research organization in New York,submitted testimony last month for the Senate Banking Committee in favor of more banking regulation.
Every day brings more reminders of the terrible unfairness that besets our country, the tragic reversal of fortune experienced by millions who once had good lives and steady jobs, now gone.
An article in the current issue of Rolling Stone chronicles “The Fallen: The Sharp, Sudden Decline of America’s Middle Class” and describes a handful of middle-class men and women made homeless, forced to live out of their cars in church parking lots in Southern California.
The days between the Fourth of July and Bastille Day on the 14th are known for fireworks on both sides of the Atlantic. This year, more rockets and firecrackers than usual were going off, but they were inside hearing rooms in the British Parliament and the U.S. Congress. Barclays bank announced that it had been fined more than $450 million by regulators from both countries, and its CEO, Robert E. Diamond Jr., and COO, Jerry del Missier, both resigned. The fines were part of a settlement that granted Barclays immunity from potentially worse punishment for its manipulation of interest rates.
