the finance industry / wall street

the guys I know would probably agree, but only in the context of "we make them shitloads of money and they fully agree to our terms"

or, as like to call that, blame it on the client for being stupid

thing is my cousin is genuinely a good man.
he has a big heart and is not the oliver stone cliche.
and given my insight, he clearly is at war with his inner world.
but he has a certain financial demand now (wife, staff, kids, private schools etc in that order), and so has to maintain a certain level of lifestyle.
so, while his world may look special from the outside, give me the stress free lifestyle that i have built up instead anyday.
despite the stupid bonus, poor f*cker has it tuff.
seriously.
i like being 'normal'

all the demands you speak of were choices. if he has it tough, it was not imposed on him and his staying with his previous choices is still largely elective. (not the kids, tho)

@aimless : totally ..

for all the blood connection i have to him, i have little sympathy for the path he has chosen ..

sometimes a person builds his own prison and then loses the key -- not the most sympathetic case when the prison has jacuzzi hot tubs and 5,000 square foot loft-style cells, but still, a person can get himself on a path and have trouble getting off

NY Dems and others tring to weaken the law again

Recently, Mr. Schumer, Ms. Gillibrand and four other Democratic senators wrote to the Treasury secretary, Jacob Lew, seeking his help in shelving crucial “cross-border” guidelines on derivatives from the Commodity Futures Trading Commission. The guidance makes it clear that numerous new derivatives rules under the Dodd-Frank law apply to foreign affiliates of American banks and to foreign banks operating in the United States.

Without strong cross-border rules, derivatives regulation will be meaningless because big American banks that dominate the global market in derivatives will simply engage in risky trades and rank speculation abroad. When those risks and wagers go wrong, American institutions and American taxpayers will be on the hook — again.
...
Mr. Schumer, Ms. Gillibrand and their four colleagues are not only going against lawmakers in their own party, most of whom have resisted attempts to delay the cross-border rules. They are also going against the cause of reform, lobbying for delays that would derail the law.

trying.

constituent service is not dead

Exactly; and some constituents get better service than others.

Oh, those quotes above are from a NY Times piece btw

http://www.washingtonpost.com/politics/dodd-frank-executive-pay-rule-still-in-limbo-amid-pushback-from-corporate-america/2013/07/06/94a8c9e0-d793-11e2-a9f2-42ee3912ae0e_singlePage.html

The provision required companies to disclose how much more their chief executives made than other employees. All the agency had to do was write a rule telling firms how to comply.

The provision required companies to disclose how much more their chief executives made than other employees. All the agency had to do was write a rule telling firms how to comply.

that would be a massively meaningless and ineffectual rule anyway

You buy the reasoning that the companies oppose it? Information to the public is good even if it alone won't change anything.

Advocates contest the notion that calculating the ratio is impractical. “That’s absurd. It’s not that complicated,’’ said Lisa Donner, executive director of Americans for Financial Reform, an umbrella group of organizations pushing for the pay ratio. She accused the SEC of “bowing” to industry lobbyists and ”slow-walking” the issue.

With conservative dominated courts blocking rules that could be effective (see below), at least providing further information on pay ratio seems to be all that's left

A federal appeals court in the District in July 2011 blocked the SEC’s “proxy access” rule, a requirement under the Dodd-Frank law that would have made it easier for shareholders to oust members of corporate boards and nominate new ones.

In a lawsuit brought by the U.S. Chamber of Commerce and the Business Roundtable, the court blasted the SEC for failing to fully consider the economic impact of the regulation. The decision cast a pall, forcing the agency to devote far more time to analyzing the costs of its proposals, including the pay ratio.

http://dealbook.nytimes.com/2013/07/09/regulators-seek-stiffer-bank-rules-on-capital/?ref=business

Wow, we will eventually see after the 60 day comment period and whatever else whether this will hold.

You buy the reasoning that the companies oppose it? Information to the public is good even if it alone won't change anything.

― curmudgeon, Monday, 8 July 2013 16:56 (2 days ago) Permalink

I don't see it as providing all that much "information." The CEO's total compensation is already publicly disclosed. The median employee's compensation --the bottom part of the ratio -- isn't, but it's not going to vary that widely from huge company to huge company.

So why do you think the big corporations so engaged in opposing this? They just don't want to do the math needed to calculate the ratio? Or do they just automatically oppose anything Congress wants them to do.

tbf probably because it has bad optics for them, which I guess is maybe part of the idea -- give people another stick to beat them with. There's already the say-on-pay provision in effect (non-binding shareholder vote approving/disapproving executive pay) which I think is more useful.

they oppose this for the same reason the gun lobby opposes sensible and harmless stuff

it's a game, oppose everything

That's probably also true. I don't think it would really be that hard to calculate, but they don't want more news stories that say "CEO of XYZ Corp. tops the CEO pay ratio list for 2013" or whatever, and this just gives one more tool to write stories like that.

CEO pay is great theater

I think it's more than that, but I don't think that this particular measure is all that consequential.

http://www.alternet.org/economy/geithner-speaking-fees

Simon Johnson has explained, “Geithner came to stand for providing large amounts of unconditional support for very big banks…” at the New York Federal Reserve and continued this pattern in Washington. He favored unqualified assistance to troubled banks

The banking world is very grateful for Geithner’s championing of their interests over the public’s. Just six months after he left the Treasury in January, it has showered Geithner with cash. Deutsche Bank lavished him with $200,000 to speak at a conference in June. Private equity groups are also shoveling over piles of dough: Blackstone and Warburg Pincus paid Geithner $100,000 each for recent speaking engagements.

hey, don't begrudge timmy. he earned it.

DIAF, GS:
http://www.nytimes.com/2013/07/21/business/a-shuffle-of-aluminum-but-to-banks-pure-gold.html?pagewanted=all

there goes that revolving door again
http://dealbook.nytimes.com/2013/07/22/a-legal-bane-of-wall-street-switches-sides/?ref=business
and go round and round and round in the circle game

A friend posted this and it's interesting but something seems incomplete about the explanation. What are banks' incentives to evict someone and then NOT foreclose?

http://www.nationalmemo.com/how-deadbeat-banks-pushed-detroit-to-the-brink/

becoming a public interest attorney for the gov't is a pretty good way to get a nice cash payout at the end of the road. i feel like it incentivizes playing it light on the industry you're regulating when you're looking at your long-term career prospects.

when my uncle was at the state AGs office he was offered a hefty salary to join the guys he litigated against. he refused, but it was a shit load of money and my family was pretty pissed he didn't take it. he didn't because he actually believed in the work he was doing... and there aren't enough people like that out there.

http://eksith.wordpress.com/2013/07/07/bank-of-america-bot/

http://gawker.com/bank-repossesses-wrong-house-sells-off-homeowners-stu-893629920

The amazing thing about the BoA twitter one is that it's NOT a bot. It's actual people, responding identically to every mention of BoA.

With all of her stuff either sold off by the bank or thrashed, the homeowner presented the bank's president with an $18,000 estimate for restitution.

He refused to pay up.

"He got very firm with me and said, ‘We’re not paying you retail here, that’s just the way it is,’" Barnett recalled. "I did not tell them to come in my house and make me an offer. They took my stuff and I want it back."

In litigation jargon, we call a guy like that a fucking moron who really wants to get sued.

http://www.washingtonpost.com/opinions/katrina-vanden-heuvel-fed-up-with-wall-streets-revolving-door/2013/07/30/7f171f02-f893-11e2-8e84-c56731a202fb_story.html?tid=pm_opinions_pop

Will Obama still pick Summers anyway for the Fed?

SEC sues Goldman Sachs for securities fraud (and other financial schadenfreude)

a token conviction

get the ant, ignore the colony

yup

it occurs to me that investment banking is kind of like organized crime, inasmuch as it's easiest to bring charges against the lowest level people because they do the actual dirty work. Unfortunately there's no SEC equivalent of RICO.

You can charge business folks with operating a criminal conspiracy, however. You can prosecute the case similar to RICO that way.

The prosecutors had a list of up to 200 unindicted co-conspirators in the Enron case that the defense wasn't really allowed to talk to and people who knew they were potential targets wanted nothing to do with running afoul of the DOJ and go from unindicted to indicted co-conspirator.

http://www.chron.com/business/enron/article/Names-of-some-Enron-co-conspirators-released-1984531.php

Yes you can, but it's a REALLY high bar. Enron was basically a company-wide sham.

I had dinner with him last year, without knowing who he was. Huge fan of Big Bang Theory

He came across as a really nice guy, tbh. There's no doubt he acted unethically and illegally but he did so in an environment that actively encouraged it. He was completely hung out to dry by people far more culpable than himself. It goes to show that you do literally need to have written e-mails bragging about all the shady stuff you're up to to get convicted.

if you ask me the differences between enron and the parties involved in the housing crisis are negligible. both were trading in derivatives that spiraled out of control, both played fast and loose with the rules but technically still followed them once they pushed them to their logical extremes.. enron just got caught all by themselves rather than in a whole crowd of people robbing the bank at the same time.

the differences are big when it comes to actually proving some kind of criminal conspiracy -- in one case you have an entire fraudulent enterprise, in another you have organizations that do a million different things, a small subset of which are arguably fraudulent. It's not so easy to argue that the entirety of Citigroup is a criminal conspiracy for putting together bad mortgage-backed securities when they're also running a commercial bank and putting out analyst reports on stocks and doing boring bond issues and all that other stuff. And it's not so easy to get Citigroup top executives for that reason, unless you can show direct knowing involvement by them in the fraud.

enron wasn't "technically still following" any rules by the end. it was straight out cooking the books.

how you estimate the future risk of collateralized debt is one thing. just not marking down losses or buying propping up your own assets with bogus loans from shell companies is something else entirely.

so longreads linked to this old wapo article on super-smart high school students and their quidags and whatever http://www.washingtonpost.com/wp-dyn/content/article/2006/11/27/AR2006112700960_pf.html

and i was curious what happened to the subject of the article, and sure enough i google around and she ended up working in risk at goldman. http://www.nytimes.com/2009/08/23/fashion/weddings/23MANN.html

http://www.nytimes.com/2013/08/16/opinion/no-banker-left-behind.html?nl=todaysheadlines&emc=edit_th_20130816&_r=0

Banks do much better than pensioners in Detroit bankruptcy action

This much is clear:

■ The banks’ 25 percent hit is nothing compared with the 90 percent cut to pensions suggested by the city — a cut that would be disastrous in both human and political terms and that the State of Michigan must prevent from happening.

■ Municipal officials are prey for Wall Street. The Dodd-Frank financial reform law called on regulators to establish “enhanced protection” for municipalities and other clients in their dealings with Wall Street, but the Securities and Exchange Commission has not yet completed rules, while the Commodity Futures Trading Commission’s rules are so weak as to virtually invite the banks to exploit municipalities.

■ The special treatment banks receive when debtors are in or near bankruptcy is unfair and economically destabilizing. Detroit’s agreement with the two banks requires court approval, but, in general, swap deals by banks are not subject to the constraints that normally apply in bankruptcy cases; in effect, the banks are paid first, even before other secured creditors and certainly before pensioners. That privilege, dating to the heyday of derivatives deregulation in the 1990s and 2000s, is destabilizing because the assurance of repayment fosters recklessness.

enron wasn't "technically still following" any rules by the end. it was straight out cooking the books.

― stefon taylor swiftboat (s.clover), Friday, 2 August 2013 22:43 (2 weeks ago) Permalink

how you estimate the future risk of collateralized debt is one thing. just not marking down losses or buying propping up your own assets with bogus loans from shell companies is something else entirely.

― stefon taylor swiftboat (s.clover), Friday, 2 August 2013 22:47 (2 weeks ago) Permalink

right this, exactly, thank you