the finance industry / wall street

I would think that if you just allowed the value of the "scrips" to float, you would get people agreeing to babysit for less than the full hour value in times when scrips were scarce, and that would induce some scrips back into circulation. If I'm wrong can someone explain?

I don't think you're wrong. I think this is in fact what often happens in recessions driven by tight money, ie. deflation. It's just that it takes a long time and is usually accompanied by unemployment and economic stagnation, but eventually a kind of equilibrium would be regained.

The adjustment would be a bit quicker than irl in that large, long-term debts are not usually contracted in babysitting scrip.

senate confirms mary-jo white as sec-chair-

http://www.politico.com/story/2013/04/mary-jo-white-confirmed-sec-89753.html#ixzz2PyvYMxuh

The swift confirmation — which was done by unanimous consent on the first day of the Senate following a two-week recess — came as no surprise; White sailed through the Senate Banking Committee on a 21-1 vote last month.

Ohio Dem Sherrod Brown was the 1 vote against her in the committee vote.

I'm sure she will aggressively do the opposite of what her hubby has been lobbying for. Well, probably not.

On Thursday, several bills to pre-empt the regulation of derivatives will be the focus of a hearing in the House Financial Services Committee. The bills, which have already passed the Agriculture Committee, must be stopped if the world is to be made safe from reckless risk-taking by banks.

From a NY Times editorial today re Dodd/Frank.

And the NY Times is using "derivatives" in part as a shorthand here to stand for all that went wrong with them.

http://www.huffingtonpost.com/2013/04/11/foreclosure-review-program-warren-brown_n_3062126.html

E. Warren and S. Brown grilling regulators makes me happy, even if some folks might say they're just showboating and not really accomplishing anything.

http://www.vanityfair.com/society/2013/04/mysterious-residents-one-hyde-park-london

feel like this is the thread to ask - anybody know more deets about the city of london corporation?

Not me.

New SEC head appoints new Enforcement unit director (we'll have to wait and see re this guy who has a similar background to his boss):

http://dealbook.nytimes.com/2013/04/22/s-e-c-picks-ceresney-and-canellos-for-enforcement/?nl=todaysheadlines&emc=edit_th_20130423

Mr. Ceresney will inherit a unit that is on pace to file the lowest number of enforcement cases in a decade, according to S.E.C. figures provided to The New York Times.

Still, Mr. Ceresney faces his share of challenges. His appointment, which does not require Senate approval, could renew concerns about a revolving door that shuttles S.E.C. lawyers from the government to the private sector, and back again.

While at Debevoise, Mr. Ceresney represented a number of the nation’s largest banks, including JPMorgan Chase during an inquiry involving its foreclosure practices. Mr. Ceresney is expected to recuse himself from cases involving his former clients.

The S.E.C.’s caseload presents another test for Mr. Ceresney. In addition to the dwindling number of actions, the S.E.C. is unlikely to catch any breaks from the courts. The Supreme Court recently rejected the agency’s argument that it should have additional time before the statute of limitations in fraud cases expires.

The agency has run into resistance in the lower courts as well. Judge Jed S. Rakoff of the Federal District Court, for example, has said the agency’s settlement with Citigroup “is neither fair, nor reasonable, nor adequate” in part because it did not include any admission of wrongdoing.

There was more text after that first quoted sentence, and before the rest of the quote there.

When a million isn’t enough: why top bankers are struggling to get by

Life is tough when you have to keep up with your peers and maintain that pricey private school and Hamptons lifestyle

http://dealbreaker.com/2013/04/lloyd-blankfein-explains-how-in-their-own-little-way-commodities-are-the-gay-people-of-asset-classes/

Why can’t bankers simply ditch the house in the Hamptons and put their children into state run educational establishments? Unfortunately, this seems easier said than done.

Basically confusing motivation with cause -- yeah that's a perfectly good explanation of why the do it, but not why they particularly need to

it's a cliche, but that almost seems like an onion article

article does offer some reasonable, if not completely original, insights into the kinds of people who go into finance in the first place and why they wind up trapped in that mentality

The vast majority of people (including most rich people) essentially live check to check, trapped in some form of mentality where they don't adequately save in the event that financial disaster occurs. And fuckit, you only live once, amirite?

Hard to feel sorry for bankers because hey, aren't they supposed to know better than to leverage themselves silly?

yeah, i am one of these people. i could have moved out of my parents house by now if i wasn't eating lunch in cafes and buying records probably.

The vast majority of people (including most rich people) essentially live check to check -dandydon

While that may be true for the rich folks cited in that article, I'm not so sure about "most rich people." But if you have factual data to back that up, I'd accept it.

It's probably true of a lot of so-called "working rich" -- people who aren't independently wealthy but make large salaries, especially who start making large salaries at a young age

Well, context is everything right? I do not mean to discount the advantageous issue of net worth or liquidity issues; clearly the rich can likely make lifestyle downgrades and, you know, still survive. That's what we hate about them, right? That they have that "choice"?

But the rich (not sure of the definition or parameters as it relates here) are typically highly leveraged by their lifestyle in at least their mortgage but almost certainly with other household debt that would be very difficult to service if a bad financial event happened. Certain elements of the tax code favor this kind of behavior, obv.

here is a lot of information about annual income and debt

http://www.federalreserve.gov/pubs/bulletin/2012/pdf/scf12.pdf

especially pp56-73

Well, context is everything right?

No

There's also the fact that if you are rich, you were probably born rich, and have rich parents, rich friends, rich extended family, etc. While the safety net is being pulled out from under the poor, this particularly safety net is pretty much built into being rich and will never go away.

here is a lot of information about annual income and debt

http://www.federalreserve.gov/pubs/bulletin/2012/pdf/scf12.pdf

especially pp56-73

― I will forlornly return to my home planet soon (dandydonweiner), Wednesday, May 1, 2013 11:33 AM Bookmark Flag Post Permalink

This shows that people in the 90th percentile and up have BY FAR the lowest leverage ratios, so I'm really not sure what you're getting at

am I reading page 59 wrong?

size of debt in dollars is not really a useful measure without comparison to income and assets.

That aside, there's an awfully large amount of secured debt from "other" residential property (if I'm reading that right) which I guess means either second homes or rental property for income. Worst thing that happens if they can no longer service that debt is they lose a vacation home or a rental property.

xp and that info is conveniently provided on p. 72, where we get lots of great information about debt burden to income ratios. People in the 90th percentile and above have about half the ratio of every other decile group. In addition, the percentages of people in the top decile with debt payments making up more than 40 percent of their income, and people in that group who are past due on debt, are tiny compared to the other groups.

smarten up Don

right, as I noted above there is usually an advantage to net worth (and as Adam elaborated on) but that doesn't mean that rich people aren't leveraging themselves like crazy. It just means that for whatever percent of the top (3% ? I dunno, you name it) there is likely a significant safety net that they can likely mitigate most unplanned, negative financial situations.

But that leaves millions of others with a relatively high net worth who are certainly leveraged by their homes and other secured debts. You know that. Not sure why you're trying to fight me over how leveraged most rich people are.

well according to the doc you sent me rich people are like half as leveraged as everyone else!

Don suggested that most rich people live check to check and that does not seem right.

kind of depends what you think is rich--top 10% is $148k of annual income on up and it would seem reasonable that above 5% ($208k on up) probably has an effect on the leveraging. And the halving point starts at $107k hh per year. Maybe it would be better if I defined rich better.

Honestly, I found it odd that aggregate debt was within a few percentage points for all 70% of the country. And, that, it was only around 20%. So in that metric, I'm totally fucking wrong. Like, wayyyyyy wrong. Like always, right?

why would people in the top 5% be more leveraged than people in the top 10-5%?

didn't type that well; what I meant was that the amount of leverage between the top 10% and 5% is probably significant. I am curious to where it really starts dropping because that to me would be an indication of where the truly "financially independent" households like. Sorry I have been terribly sloppy today and wasting so much bandwidth.

I really thought that aggregate debt for most households would be in the 30%+ range. Can't get my head wrapped around that.

I think what's really striking is that there's a huge dropoff in leverage from the 80-90 group to the 90-100 group, whereas 70-80 is pretty similar to 80-90. But I guess that makes sense if the 70-80 is x income to y income, the 80-90 is y income to z income, but the 90-100 is z income to infinity.

Does it say whether those ratios are median ratios, within the decile? Is the ratio listed exactly the 95th percentile mark?

anyway, even if you broke down that top decile further I don't think you'd find a significant percentage of those people were MORE leveraged than most Americans.

well, the point was more if we pull the super rich out of the equation (as affable outliers!) then are the rich still leveraged like the rest of us (by percentage of aggregate debt!)? Honestly, with debt levels around 20% for even 70% of households, my argument about people being leveraged seems HORRIBLE. I need to find a new metric. Or invent one.

I didn't read the details of the breakdown that well. I think it's possible to download the whole table of data and then maybe we could (likely?) slice and dice by whatever we wanted and create our own income stratas.

I thought I'd read before that typical HH debt target (for mortgage purposes and including mortgage) was somewhere around 36%. Was very surprised to see aggregate debt levels below that.

Keep in mind that those debt levels are heavily skewed by renters. Mortgages are going to be by far the biggest ticket debt item for a family, and a family that doesn't have a mortgage is going to have a much tinier debt burden than an equal income family with none. That's why you see relatively even debt-service-to-income ratios, yet the percentages of lower income families with greater than 40% of their income going to service debt are MUCH higher.

yes, I was thinking I could go get a table of home ownership and then manually factor that in but it became too much of a hassle. And really this discussion point was supposed to be essentially about cash flow...so rents are related if I'd not have strayed over into debt.

But still, I would probably assume that at least the middle income strata had a high degree of home ownership, and that those home owners likely were near the limits of their loaning ability, and that therefore the 20% was low.

it's a cliche, but that almost seems like an onion article

not to derail or be too lol obvious, but the kickoff to this conversation seems rather liberally sourced from this chestnut

the orig. article seems a bit dry f/ satire, though even the lonely-at-the-top sentimental horseshit w/ Oliver James waxing on the simple (and apparently inexpensive) joys of one's student years is ripped straight from the novel. (OTOH "Sarah Butcher" seemed f/ at least a few minutes to have effectively pitched the noxious notion of the upper strata as just another besieged bourgeois outpost affected terribly by the financial shenanigans of ~mysterious others~).

/parenthetical bs

http://www.huffingtonpost.com/2013/05/01/alexis-goldstein-jim-himes_n_3196206.html#slide=more34585

http://blogs.wsj.com/moneybeat/2013/05/02/crude-broker-talk-surfaces-in-london-trading-probe/

http://news.efinancialcareers.com/us-en/134725/how-to-tell-your-wife-or-husband-you-got-a-bad-bonus/

"bad bonus"

https://www.youtube.com/watch?v=TQXuazYI_YU

Was that "bad bonus" piece for real?

this is amazing:

3. Don’t accuse your wife or girlfriend of being a hypocrite
One equity researcher who said he hasn’t had a bonus for five years, advised bankers to resist the temptation to criticize wives’ reactions to the size of their bonus

“My own experience is that a lot of wives and girlfriends of investment bankers don’t necessarily like the fact that their partner is in banking – they’d rather be with someone who’s doing something much more worthy. Spouses pretend that they don’t like the money and the long hours, but the fact is that they also love the expensive holidays and meals out.

“Banking partners are therefore a bit hypocritical. It’s tempting to point this out when a bonus doesn’t come through. I’ve never actually said that to my girlfriend though as it would just cause an argument,” he added.

http://www.nytimes.com/2013/05/06/opinion/a-disappointing-debut-at-the-sec.html?nl=todaysheadlines&emc=edit_th_20130506&_r=0

Mary Jo White's initial review for early actions taken

http://www.forbes.com/sites/davidmarotta/2013/04/21/is-a-3-million-ira-sufficient-for-retirement/

Forbes defending the rich folks rights to enormous IRAs, and neo-con Hyatt at the Post even thinks Forbes is wrong. This will never pass anyway

http://www.washingtonpost.com/opinions/fred-hiatt-obamas-modest-proposal-to-cap-retirement-entitlements/2013/05/05/de9eea7a-b402-11e2-bbf2-a6f9e9d79e19_story.html?tid=pm_pop