When Jon Stewart Took on Wall Street

Joe Nocera in the NY Times has a nice memory of how Stewart took apart the Wall Street media.

“Stewart had no special Wall Street knowledge, as he was the first to admit. What he had was a nose for a scam, and an uncanny ability to articulate what the rest of us were feeling.

“He mocked the way Wall Street firms paid ungodly sums to settle government charges without ever admitting guilt (a subject later championed, less humorously, by Federal Judge Jed Rakoff). He lampooned the way dubious deals — particularly the notorious Goldman Sachs Abacus deal — were legal, even as they oozed with sleaze. After J.P. Morgan’s big London Whale losses, he showed a Senate hearing where senators cravenly solicited regulatory advicefrom the company’s chief executive, Jamie Dimon — and then noted that J.P. Morgan was often their biggest campaign contributor. And so on.

SIGTARP proves that some bankers aren’t too big to jail

We’re heard a lot about the lack of prosecutions on Wall Street for the players that brought the world economy to its knees, and almost lower still.  There is one outfit, however, that takes its defend and protect mandate seriously — and of all places, from the heart of the hated bailout: the Inspector General’s Office of TARP

 

Since 2008, the Office of the Special Inspector General for the Troubled Asset Relief Program has pursued criminal charges against 107 senior bank officers, most of whom have been sentenced to prison. Created to supervise the government bailout of the auto and financial industries, the agency has found dozens of cases of bank executives who misused bailout funds.

SIGTARP has a staff of 170, a budget of $41 million and an enforcement track record that rivals agencies twice its size. The agency’s work has resulted in $4.7 billion in restitution paid to the government and victims. Lawmakers are holding SIGTARP up as a model and questioning why other agencies are not producing similar results.

Sure, these aren’t the biggest fish in the predator pool, but at least an example is being set and other regulators are being goaded. Go Christy Romero!

The New Center: Two Feet From the Edge of the Cliff

What on earth could the headline writers, and indeed Jonathan Martin, mean by characterizing the present position of the Democratic Party as ‘the center!’

Some Democrats Look to Push Party Away From Center 

Pointing out that the income and wealth curves are so far out of balance that the great economic machine of the United States is likely to grind to a halt is NOT progressive populism.  Argh!

Showing the history of the Glass-Steagall act in reining in financial risk-taking, with other people’s money, and pushing for a return to similar rules after the ruinous 2008 melt down is NOT moving away from the center.  It is trying to return to the center — of common sense and learning from experience.

It is one thing for the crows of Wall Street to caw about left-wingers going after their carrion.  It is another when observers caw the same notes.

Goodness, the money-power axis is so far to the right we will all be run off the cliff unless the center is regained soon.

Read the copy….

Elizabeth Warren Has Wall Street Worried

When “Business Insider” headlines Elizabeth Warren Wants To Take This Goldman Sachs Aluminum Story And Run Right Over Wall Street With It, you know the new Senator from Massachusetts has got the attention of the watch dogs of the Street.

“Today the Senate Banking Committee met to discuss Wall Street’s role in the global commodities business, and as you can imagine Senator Elizabeth Warren (D-MA) was quite outspoken about the fact that she wants it majorly diminished….”

Read the story and be glad you donated to get the lady elected….

Fat Cats Whupped (for Now)

Eduardo Porter, on election day, wrote an interesting column in the NY Times, gathering recent data suggesting that Fat Cat donors, and the corporations, don’t get very much for their dollars:

 Corporate watchdogs suggest another cause for concern: campaign contributions driven by corporate executives might harm the long-term interests of their shareholders.

A study published last summer by scholars at Rice University and Long Island University looked at nearly 1,000 firms in the Standard & Poor’s 1,500-stock composite index between 1998 and 2008 and found that most companies that spent on politics — including lobbying and campaign donations — had lower stock market returns.

Another study published this year by economists at the University of Minnesota and the University of Kansas found that companies that contributed to political action committees and other outside political groups between 1991 and 2004 grew more slowly than other firms. These companies invested less and spent less on research and development.

Notably, the study determined that corporate donations to the winners in presidential or Congressional races did not lead to better stock performance over the long term. Indeed, the shares of companies that engaged in political spending underperformed those of companies that did not contribute.

And the relationship between politics and poor performance seems to go both ways: underperforming companies spend more on politics, but spending on politics may also lead companies to underperform.

Which reminds me of the Big Business mantra, conducted by the conservative media, that union members should not have their dues used for political purposes without their express consent.  And shareholders!? I immediately think. The money corporations spend on political causes, not to mention corporate jets, lavish lifestyles and shady business might otherwise go into shareholder returns.

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Today’s Times takes a look at the bad bet made by Wall Street:

Few industries have made such a one-sided bet as Wall Street did in opposing President Obama and supporting his Republican rival. The top five sources of contributions to Mr. Romney, a former top private equity executive, were big banks like Goldman Sachs and JPMorgan Chase, according to the Center for Responsive Politics. Wealthy financiers — led by hedge fund investors — were the biggest group of givers to the main “super PAC” backing Mr. Romney, providing almost $33 million, and gave generously to outside groups in races around the country.

…Wall Street, however, now has to come to terms with an administration it has vilified. What Washington does next will be critically important for the industry, as regulatory agencies work to put their final stamp on financial regulations and as tax increases and spending cuts are set to take effect in the new year unless a deal to avert them is reached. To not have a friend in the White House at this time is one thing, but to have an enemy is quite another.

“Wall Street is now going to have to figure out how to make this relationship work,” said Glenn Schorr, an analyst who follows the big banks for the investment bank Nomura. “It’s not impossible, but it’s not the starting point they had hoped for.”
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And of course, they have to start scrambling to implement plan B:

Wall Street is now pivoting from a broad attack on Dodd-Frank to a more targeted approach to its most contentious rules. A central goal, lobbyists say, is to tame unfinished rules that rein in derivatives trading.

“We urge the president to carefully consider the closeness of the election results as he evaluates his regulatory policy priorities for a second term,” Dale Brown, chief executive of the Financial Services Institute, said in a statement on Tuesday night as election returns piled in.

Lobbyists are appealing to more sympathetic members of Congress, urging them to apply pressure on the Commodity Futures Trading Commission, which has proved to be an aggressive foe of the banks. Financial trade groups are also expected to line up behind a new bill in Congress that would undercut the authority of agencies like the trading commission and the Federal Deposit Insurance Corporation. The bill, which a Senate committee is expected to vote on this month, would subject independent regulators to heightened rule-writing standards.

27 Myths in 38 Minutes

From Think Progress:

Romney spoke for 38 minutes of the 90 minute debate and told at least 27 myths:

How Romney got it all wrong on Wall Street.

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