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Book Bits | 29 April 2017
● Adaptive Markets: Financial Evolution at the Speed of Thought By Andrew W. Lo Summary via publisher (Princeton University Press) Half of all Americans have money in the stock market, yet economists can't agree on whether investors and markets are rational and efficient, as modern financial theory assumes, or irrational and inefficient, as behavioral economists […]
In 100 Days, Trump Has Found 29 Ways To Screw Regular Americans
function onPlayerReadyVidible(e){'undefined'!=typeof HPTrack&&HPTrack.Vid.Vidible_track(e)}!function(e,i){if(e.vdb_Player){if('object'==typeof commercial_video){var a='',o='m.fwsitesection='+commercial_video.site_and_category;if(a+=o,commercial_video['package']){var c='&m.fwkeyvalues=sponsorship%3D'+commercial_video['package'];a+=c}e.setAttribute('vdb_params',a)}i(e.vdb_Player)}else{var t=arguments.callee;setTimeout(function(){t(e,i)},0)}}(document.getElementById('vidible_1'),onPlayerReadyVidible); President Donald Trump campaigned as a champion of forgotten and downtrodden Americans ― a risible but tried-and-true platform ― but the first 100 days of his presidency have been decidedly un-populist. Amid Trump's deluge of unsubstantiated claims and the chaos of his administration, it can be challenging to keep track of what campaign promises he has or hasn't fulfilled. So here's a list of 29 things Trump has done so far that cater to big business at the expense of ordinary Americans: 1. Trump reversed a planned decrease in the cost of mortgage insurance for working- and middle-class homebuyers. Within hours of being sworn in, Trump put a hold on a reduction in the cost of Federal Housing Authority mortgage insurance. The move means 750,000 to 850,000 Americans will face higher costs in the next year alone, according to the National Association of Realtors. 2. He nominated to run the Treasury Department a second-generation Goldman Sachs partner and hedge fund manager who activists say ran a "foreclosure machine." Steven Mnuchin misled senators by saying the bank he invested in and ran didn't use illegal robo-signings (documents showed they did) and omitted $100 million in assets from his personal financial disclosure forms. Oh, and the Department of Housing and Urban Development is investigating claims his bank engaged in the racist practice of redlining. 3. Mnuchin is painfully under-informed about automation's potential to decimate labor. In an interview with Axios' Mike Allen, Mnuchin said he was "not at all" concerned about the potential shocks to the labor market that advances in automation might have, insisting that the timeline for such concerns was "50 or 100 years." As The Verge's Adi Robinson noted, "[a] December report from the White House cited studies that estimate automation will affect between 9 percent and 47 percent of jobs over the next 10 to 20 years." 4. Trump tried to put a fast-food executive in charge of the Labor Department. After running a campaign focused on the economy's forgotten workers, Trump plucked the chief executive of the Hardee's and Carl's Jr. burger chains to lead the nation's top workplace watchdog. While Andrew Puzder ran parent company CKE Restaurants, Hardee's and Carl's Jr. franchises around the country violated the very labor laws that Puzder would have been expected to enforce. Puzder's nomination eventually went down in flames ― not due to his company's labor record, but because of old domestic abuse allegations and because he'd personally employed an undocumented immigrant. 5. Goldman Sachs' influence in the Trump White House doesn't end with Mnuchin. Former Goldman Sachs president Gary Cohn's influence in the West Wing has grown considerably in Trump's first 100 days. Cohn's developed such a strong hand internally that he is currently thought to be a leading contender for Reince Priebus' job, should any staff shakeup create the need for a new White House chief of staff. As HuffPost has noted, "Cohn's appointment as White House chief of staff wouldn't just be a boon for bank lobbyists seeking lucrative new loopholes. It would be a restoration of finance to the center of American politics." 6. Goldman Sachs' influence in the Trump White House doesn't end with Gary Cohn, either. Trump nominated former Sullivan & Cromwell partner Jay Clayton to chair the Securities and Exchange Commission, which is tasked with making sure the financial sector behaves itself. In the wake of Clayton's nomination, his old firm carefully trimmed his 800-word biography ― which detailed his adventures helping Wall Street firms navigate the legal terrain in pursuit of mergers, acquisitions and capital market offerings ― down to a more concise 30. Here's an even more concise biography: Clayton is probably best known as Goldman Sachs' bailout lawyer. 7. Trump named a billionaire investor as an anti-regulation czar. Trump named Carl Icahn as a special adviser on regulation, which is awkward, given the dozens and dozens of regulations that materially affect Ichan's investments. He is particularly incensed by an EPA renewable fuel rule that applies to an oil refinery in which he owns a stake. Only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits. Peter Thiel, "Zero To One" 8. Trump named a huge fan of monopolies to lead the search for anti-trust regulators. Shortly after his inauguration, Trump gave billionaire Silicon Valley venture capitalist Peter Thiel the go-ahead to lead the search for his administration's "top antitrust enforcement jobs." Thiel, who sits on the board of world-devouring platform Facebook, came out as a committed monopolist in his book Zero To One: "Only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits." 9. Overall, Trump's advisers live in an elitist bubble. As the Washington Post's Philip Bump reported in April, Trump has staffed his White House with a collection of plutocrats who possess a staggering collective wealth: "Financial reports released by the Trump administration indicate that 27 staffers who work for him are worth a combined $2.3 billion thanks to real estate, investments and hefty salaries." That's more money than 86 counties' worth of Trump voters make in a year. 10. Trump moved to kill a rule that forces Wall Street to act in the best interest of Americans saving for retirement. Trump signed a memo that put the fiduciary rule — which requires brokers act in the best interests of folks saving for retirement — on the path to the glue factory. His adviser Cohn likened the move to "freedom," saying, "This is like putting only healthy food on the menu, because unhealthy food tastes good but you still shouldn't eat it because you might die younger." Not exactly: The rule literally forbade brokers from guiding retirees "into expensive or poor-performing products that carry economic benefits and perks for the advisers and their firms, without disclosing such conflicts of interest." It's estimated that consumers lose $17 billion annually to such scams. 11. Trump took aim at post-crisis bank regulation. Trump signed an executive order in February that by itself doesn't undo Dodd-Frank, but starts a process that could defang Wall Street oversight. Technically, the administration is still in the "just asking questions" phase of financial de-regulation, but Trump has been clear about his intentions, saying that "we expect to be cutting a lot out of Dodd-Frank." Trump signed the order after a meeting earlier that day with big-time Wall Street executives, at one point telling JPMorgan Chase CEO Jamie Dimon, "There's nobody better to tell me about Dodd-Frank than Jamie, so you're going to tell me about it." Trump signed two more executive orders in April asking the Treasury Department to review governmental authority to take over failing financial companies, and to review rules that allow for the regulation of financial companies other than banks as systemically important. 12. Trump outlined a budget that's broadly punitive to Trump's own voters. The Washington Post's Jenna Johnson reports Trump's proposed budget includes cuts that "would disproportionately harm the rural areas and small towns that were key to his unexpected win." 13. Trump has instigated a trade war that will hit Americans first. The Dallas Morning News reported that Texas cattle ranchers have emerged as the "first casualty" of Trump's "blundering, blustering trade policy." Per contributor Richard Parker: "By threatening a trade war with Mexico within days of inauguration, the president helped trigger a slide in cattle futures. Mexico is a major export market. By sinking the Trans-Pacific Partnership, the new administration cut off long-sought access to the Japanese market. Now banks have raised the conditions for collateral for loans for ranchers." 14. Trump has backed health care proposals with a common theme: subsidize the wealthy while jacking up prices on the poor with shock cost increases. Both Trump-backed Obamacare replacements are broadly redistributive, but not in any discernibly populist direction. Rather, they shift wealth from poorer Americans to wealthier ones and corporations. People earning over a $1 million, in fact, would have "saved an estimated $165 billion in taxes over 10 years." The tax benefits would be financed through draconian cuts to Medicaid and other health programs for the poor. 15. The plan also features substantial cuts in drug treatment protocols to address the nation's opioid crisis. As CNN's Dan Merica reported: "The current version of the Trump-backed Republican health care plan would end the Obamacare requirement that addiction services and mental health treatment be covered under Medicaid in the 31 states that expanded the health care program. The GOP plan would instead leave up to states ― and their budgets ― to decide whether to cover drug treatment and mental health services under Medicaid. That's a decision advocates say could put the most vulnerable opiate abusers in greater risk, thanks to near-constant pressure on state budgets." 16. Good news for employers who like stealing from their workers! Trump signed a bill, sent to him by Congress, that repeals the sensible-sounding Fair Pay and Safe Workplaces rule, put in place by Obama. The rule would have required companies to disclose labor law violations when they bid on federal contracts, so that the government doesn't steer taxpayer dollars toward companies that cheat or endanger workers. By repealing the rule, Trump did a favor for companies that have a history of wage theft and workplace hazards. 17. Trump delayed a life-saving protection for construction workers. Earlier this month, Trump put a halt to the most consequential workplace safety reform of the last decade. The so-called silica rule would reduce the amount of cancer-causing dust that companies can legally expose construction workers to. The tighter regulations rolled out last year were 45 years in the making and are projected to save 600 lives per year. But the Trump administration announced a three-month delay to enforcing the rule, drawing applause from the construction industry. Workplace watchdogs now worry the regulations will be watered down or scrapped altogether. 18. Trump made it harder for low-wage workers to save for retirement. The Obama administration took steps to popularize what are known as automatic IRA accounts. These are government-sponsored retirement plans set up for people who don't have IRA's through their jobs, i.e., much of the working class and working poor. Even though these plans once enjoyed conservative support, Trump repealed Obama's executive order that would have made it easier for cities and counties to set up these auto-IRA's. That surely pleased Wall Street, which doesn't like how these IRA's compete with its own offerings. 19. Trump made it easier for employers to hide worker injuries. Earlier this month, Trump loosened the record-keeping requirements for employers in dangerous industries. Instead of having to keep accurate injury records for six years, employers can only be held accountable for the last six months. Occupational health experts say the change will make it easier for companies to sweep injuries under the rug. "This will give license to employers to keep fraudulent records and to willfully violate the law with impunity," a former OSHA policy adviser told HuffPost. 20. Trump weakened rules on lobbyists working in his administration. Trump signed an executive order that allows lobbyists to join his administration, provided they don't work for two years on any issue on which they lobbied. (The Obama administration barred anyone who had been registered as a lobbyist in the prior year from joining.) As a result, someone like Geoffrey Burr, who lobbied the Labor Department in opposition to wages rules and worker safety measures, can work in the Trump administration's Labor Department. 21. Trump allowed coal companies to dump waste in streams. Trump signed a bill killing the Obama administration's Stream Protection Rule, which aimed to keep toxic metals out of water supplies in coal country. 22. Trump froze Environmental Protection Agency contracts grants. The Trump team put a temporary halt to funding for routinely contracted work like drinking water testing, ProPublica reported. 23. Trump's FCC kept the prices sky-high for families who call loved ones in prison. Prison phone calls are absurdly expensive, averaging around $3 for a 15-minute in-state call. Activists have been trying to bring the cost down for years. In 2015, federal regulators approved a rule that capped charges at 11 cents per minute. The industry sued, and Trump's new head of the FCC, Ajit Pai, recently announced the agency would not defend the rule in court. 24. The FCC also blocked nine internet service providers from a federal subsidy program for low-income Americans. Pai undid a move that allowed internet service providers to participate in the Lifeline program, which gives a $9.25-per-month credit to households to buy internet service. 25. Trump's EPA killed a rule to protect people from mercury exposure. The EPA withdrew a rule requiring dentists' offices to install equipment to dispose of fillings that contain mercury as an alternative to washing them down the drain. Mercury can hurt pregnant women and kids even at low levels. 26. Troubling signs for civil asset forfeiture reform. During a White House meeting with county sheriffs from across the country, Trump offered to help "destroy the career" of Texas state Sen. Juan Hinojosa after one of the sheriffs in attendance complained about Hinojosa's efforts to curtail the oft-abused practice of civil asset forfeiture. 27. Big military budget build-up has little for the soldiers on the front lines. Trump has planned to funnel taxpayer dollars into the military in a bid to beef up its budget. But as of now, the principal beneficiary of this largesse will continue to be wealthy military contractors and Pentagon elites. As HuffPost's David Wood reported, very little will trickle down to working-class service members, who typically deploy with "budget leftovers" such as "antiquated rifles, helicopters built for their grandfathers during the Vietnam War and communications gear that is overweight and unreliable." The men and women who are training to fight in the next war have "weapons that don't work, trucks that are broken down, [and] combat exercises canceled for lack of money." 28. Plans are afoot to make it easier for corporations to get out of paying their taxes. Trump signed an executive order this month asking the Treasury Department to look at all Obama-era tax rules. Anything that's too much of a burden or too complex in the eyes of Secretary Mnuchin could get axed. The main target appears to be rules put in place to cut down on tax inversions, in which an American company acquires a foreign company and relocates abroad to cut down on its U.S. taxes. 29. And now, Trump has proposed a massive tax cut for America's elites: Just ahead of the (largely arbitrary) "100 Days" deadline, the White House issued a single-page statement of principles that outlines a massive tax cut for America's richest citizens. In HuffPost's analysis, the wealthy would benefit from "reducing the tax rate on stocks, bonds and real estate investments; eliminating inheritance taxes for millionaire heirs and heiresses; and bringing down the tax rate on the largest corporations to less than half of what it is now." According to the Center for Economic Policy and Research, Trump would himself receive a tax break windfall under this plan, to the tune of $65 million. Appropriately, the punchline of Trump's faux-populist joke is, "The Aristocrats!" -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.
The Real Barack Obama Is Finally Exposed To Everyone
Authored by Mike Krieger via Liberty Blitzkrieg blog, There is no reason for the Democratic Party to exist.– Jimmy Dore I've been surprised by the number of people who lived in total denial about who Barack Obama actually was throughout his entire administration, suddenly pointing out the ethical and demoralizing implications of his recent decision to accept $400,000 for a speech to Wall Street firm Cantor Fitzgerald. For myself and countless others, the writing was on the wall from virtually day one when he appointed Wall Street sycophants Timothy Geithner and Larry Summers to senior positions within his administration. Then came the policies, which were even more generous to Wall Street than any cynic could imagine. I posted countless pieces on Obama's cronyism throughout his Presidency, constantly referring to him as an oligarch-coddling fraud, which his record unquestionably confirms. It wasn't just Wall Street either. Although his protection and empowerment of that industry was particularly shameless, he coddled and elevated corporatism and cronyism generally throughout his eight years. As I observed in the 2015 post, Cronyism Pays – Eric "Too Big to Jail" Holder Triumphantly Returns to His Prior Corporate Law Firm Job: Trying to determine Barack Obama's most corrupt, crony appointee presents a virtually impossible task. Every single person he's appointed to a position of power over the course of his unfathomably shady, violent and unconstitutional presidency, has been little more than a gatekeeper for powerful vested interests. Obama's job was to talk like a marxist, but act like a robber baron. In this regard, his reign has been an unprecedented success. So why am I writing about Barack Obama? He's no longer President, and we once again face many of the exact same issues under President Trump. I'm addressing it because I think the fact so many people are finally having this conversation is a very good thing. We can't have an honest dialogue about such an existential issue without admitting to ourselves the sad truth about who Barack Obama is. While I certainly understand it would've been far more beneficial had many of these people faced reality years ago, we don't get to decide when people come around to admitting to themselves the truth about a person they worshipped (as my screaming into the wilderness for eight years can attest). Denial is an extremely powerful thing, and tens of millions of Democrats were completely bamboozled by Obama due to their personal obsession with the man. This is precisely why cult of personality worship is so dangerous and counterproductive when it comes to politics. We need to grow up as a culture and start supporting policies over people, logic over emotion. If you become attached to a politician or a political party like a sports team, that individual or institution can very easily manipulate and betray you. We see this over and over again, and until we move to a higher level of understanding about the world around us, we will continue to be victimized by disingenuous, opportunistic shysters. Today's post will highlight two excellent exposes of the real Barack Obama by two individuals who were not fooled by Obama's soaring rhetoric and false promises, Matt Stoller and Jimmy Dore. Let's start with excerpts from Matt's recent Medium piece, Obama the Hamiltonian: Obama, like Bush, is a Hamiltonian. He believed that those at the top of large concentrated financial institutions are experts, with top-tier credentials, and, therefore, rightful rulers. As Mr. Obama put it, Jamie Dimon, the chief executive of JP Morgan Chase, and Lloyd Blankfein, the chief executive of Goldman Sachs, were just "smart businessmen." Behind this is a deep moral debate that goes back hundreds of years, to the days of Hamilton and Nicholas Biddle. Since the Boston Tea Party revolt against the British East Indies Company's attempted monopolization of the tea trade in 1773, Americans understood local commercial institutions as enabling key decisions to be made closer to the people who bore the costs of those decisions. Advocates of centralization, like Hamilton, believed that this was an unstable and weak model for how to craft a nation-state, and that a quasi-aristocratic class should rule. The policy path of the Obama administration, like the Bush and Clinton administrations before it, and in some ways like Hamilton's Treasury Department, was largely construed around aiding the big, and hurting the small. Local banks lost out during the crisis, as did community-oriented banks. Black-owned banks, for example, were ten times less likely to receive bailout money than non-black-owned banks. This hit at the individual level as well. People in foreclosure were treated with one set of rules, while large Wall Street firms with significant debt were treated with another. As all of you must know by now, my personal convictions and philosophical leanings call for the exact opposite approach. This Hamiltonian process of concentrating power was most obvious in the banking sector, but it is also part of an overall trend towards the monopolization of our commercial society and increasing control over our lives, our liberties, and our democracy by private financiers. Some within the Obama administration noticed problems towards the end of the administration. His administration challenged the Comcast-Time Warner merger and issued an executive order on monopoly. Antitrust chief Renata Hesse made a speech explicitly rejecting the modern pro-concentration treatment of antitrust. But this was far too little, loo late. The open markets in which entrepreneurs thrive, in which workers have bargaining power, in which business is conducted honestly and effectively for the benefit of society, was fundamentally weakened during the eight years of the Obama administration, just as they had been during the Bush administration before it. The result is a bipartisan corrosive cynicism towards democracy, Americans have been saying no to this for ten years. In 2006 and 2008, Americans threw the governing Republican Party out of power. In 2010 and 2014, they did the same to the Democrats, installing Obama in power. Then, in 2016, Donald J. Trump beat both 16 Republican candidates, and then Hillary Clinton. It's hard to see these electoral tremors as anything other than a rejection of the moral framework of both party establishments. For virtually his whole Presidency, President Obama operated according to a Hamiltonian worldview in which social justice and concentrated capital went hand-in-hand, where technocracy was seen as superior to democracy. It is that same moral vision that animated Obama in accepting nearly half a million dollars in speaking fee money. Obama was the damn President?—?he's a smart guy, and yeah, this is who he should be spending time with and naturally this transfer of wealth is a just reward for him to live the lifestyle to which the virtuous class is entitled. Obama's good society was one in which a few actors in this class organize our culture using their power over our lives and liberties, because their virtue has enabled them to have the capital or credentials to do so. It's why his policy agenda on the challenges of today's political economy was education, early childhood education, and a higher minimum wage, rather than any means to liberate us from the concentrated financiers that organize our markets and our communities. They are doing this for our own good, for one day, maybe not you or me, but perhaps our children might be able to scratch and claw into this rarefied class. If, of course, they have the virtue and intelligence to do so. Many people believe in this system. Many don't. But now we can actually have the argument in an honest way. The entire post is excellent and you should read it in full and share. He makes the very critical point that we as a people cannot move forward until we admit to ourselves what this country has actually become. Perhaps a shattering of the Obama illusion for the millions of those who were until recently somehow still clinging on to the dishonest "hope and change" rhetoric can serve as a starting point for some real change. Finally, I want to share Jimmy Dore's latest rant on the topic. Readers know how much I love his show based me consistently highlighting it on these pages, but this might be his best one yet. Before you take a watch, I want to note that this week has been a little slow on the Liberty Blitzkrieg donation front, so if you enjoy my work and have the means to contribute, please consider doing so. Ad revenue from the likes of Google has completely plummeted this year, and no longer represents a remotely reasonable source of revenue. I will have to depend on readers much more going forward. Here's how to: Support Liberty Blitzkrieg
How Banks Can Compete Against an Army of Fintech Startups
It's been more than 25 years since Bill Gates dismissed retail banks as "dinosaurs," but the statement may be as true today as it was then. Banking for small and medium-sized enterprises (SMEs) has been astonishingly unaffected by the rise of the Internet. To the extent that banks have digitized, they have focused on the most routine customer transactions, like online access to bank accounts and remote deposits. The marketing, underwriting, and servicing of SME loans have largely taken a backseat. Other sectors of retail lending have not fared much better. Recent analysis by Bain and SAP found that only 7% of bank credit products could be handled digitally from end to end. The glacial pace at which banks have moved SME lending online has left them vulnerable. Gates' original quote contended that the dinosaurs can be "bypassed." That hasn't happened yet, but our research suggests the threat to retail banks from online lending is very real. If U.S. banks are going to survive the coming wave in financial technology (fintech), they'll need to finally take digital transformation seriously. And our analysis suggests there are strategies that they can use to compete successfully online. Lending to small and medium-sized businesses is ready to move online Small businesses are starting to demand banking services that have engaging web and mobile user experiences, on par with the technologies they use in their personal lives. In a recent survey from Javelin Research, 56% of SMEs indicated a desire for better digital banking tools. In a separate, forthcoming survey conducted by Oliver Wyman and Fundera (where one of us works), over 60% of small business owners indicated that they would prefer to apply for loans entirely online. In addition to improving the experience for business owners, digitization has the potential to substantially reduce the cost of lending at every stage of the process, making SME customers more profitable for lenders, and creating opportunities to serve a broader swath of SMEs. This is important because transaction costs in SME lending can be formidable and, as our research in a recent HBS Working Paper indicates, some small businesses are not being served. Transaction costs associated with making a $100,000 loan are roughly the same as making a $1,000,000 loan, but with less profit to the bank, which has led to banks prioritizing SMEs seeking higher loan amounts. The problem is that about 60% of small businesses want loans below $100,000. If digitization can decrease costs, it could help more of these small businesses get funded. New digital entrants have spotted the market opportunity created by these dynamics, and the result is an explosion in online lending to SMEs from fintech startups. Last year, less than $10 billion in small-business loans was funded by online lenders, a fraction compared to the $300 billion in SME loans outstanding at U.S. banks. However, the current meager market share held by online lenders masks immense potential: Morgan Stanley estimates the total addressable market for online SME lenders is $280 billion and predicts the industry will grow at a 47% annualized rate through 2020. They estimate that online lenders will constitute nearly a fifth of the total SME lending market by then. This finding confirms what bankers fear: digitization upends business models, enabling greater competition that puts pressure on incumbents. Sometimes David can triumph over Goliath. As JPMorgan Chase's CEO, Jamie Dimon, warned in a June 2015 letter to the bank's shareholders, "Silicon Valley is coming." Can banks out-compete the disruptors? Established banks have real advantages in serving the SME lending market, which should not be underestimated. Banks' cost of capital is typically 50 basis points or less. These low-cost and reliable sources of funds are from taxpayer-insured deposits and the Federal Reserve's discount window. By comparison, online lenders face capital costs that can be higher than 10%, sourced from potentially fickle institutional investors like hedge funds. Banks also have a built-in customer base, and access to proprietary data on depositors that can be used to find eligible borrowers who already have a relationship with the bank. Comparatively, online lenders have limited brand recognition, and acquiring small business customers online is expensive and competitive. But banks' ability to use these strengths to build real competitive advantage is not a forgone conclusion. The new online lenders have made the loan application process much more customer-friendly. Instead of walking into a branch on Main Street and spending hours filling out paperwork, borrowers can complete online applications with lenders like Lending Club and Kabbage in minutes and from their laptop or phone at any hour of the day. Approval times are cut to days or, in some cases, a few minutes, fueled by data-driven algorithms that quickly pre-qualify borrowers based on a handful of data points such as personal credit scores, Demand Deposit Account (DDA) data, tax returns, and three months of bank statements. Moreover, in instances where borrowers want to shop and compare myriad options in one place, they turn to online credit brokers like Fundera or Intuit's QuickBooks Financing for a one-stop shopping experience. By contrast, banks — particularly regional and smaller banks — have traditionally relied on manual, paper-intensive underwriting processes, which draw out approval times to as much as 20 days. The questions banks should ask themselves We see four broad strategies that traditional banks could pursue to compete or collaborate with emerging online players—and in some cases do both simultaneously. The choice of strategy depends on how much investment of time and money the bank is willing to make to enter the new marketplace, and the level of integration the bank wants between the new digital activities and their traditional operations. Two of the four options are low-integration strategies in which banks contract for new digital activities in arms-length agreements, or pursue long-term corporate investments in separate emerging companies. This amounts to putting a toe in the water, while keeping current operations relatively separate and pristine. On the other end of the spectrum, banks choose higher-integration strategies, like investing in partnership arrangements, where the new technologies are integrated into the bank's loan application and decision making apparatus, sometimes in the form of a "white label" arrangement. The recent partnership between OnDeck and JPMorgan Chase is such an example. Some large and even regional banks have made even more significant investment to build their own digital front ends (e.g. Eastern Bank). And as more of the new fintech companies become possible acquisition targets, banks may look to a "build or buy" strategy to gain these new digital capabilities. For banks that choose to develop their own systems to compete head-on with new players, significant investment is required to automate routine aspects of underwriting, to better integrate their own proprietary account data, and to create a better customer experience through truly customer-friendly design. The design and user experience aspect is especially out of sync with bank culture, and many banks struggle with internal resistance. Alternatively, banks can partner with online lenders in a range ways – from having an online lender power the bank's online loan application, to using an online lender's credit model to better underwrite and service bank loan applications. In these options, the critical question is whether the bank wants to keep its own underwriting criteria or use new algorithms developed by its digital partner. Though the new underwriting is fast and uses intriguing new data, such as current bank transaction and cash flows, it's still early days for these new credit scoring methods, and they have largely not been tested through an economic downturn. Another large downside of partnering with online lenders is the significant level of resources required for compliance with federal "third party" oversight, which makes banks responsible for the activities of their vendors and partners. In the U.S., at least three federal regulators have overlapping requirements in this area, creating a dampening effect that regulatory reform in Washington could serve to mitigate. Banks that prefer a more "arm's-length" arrangement have the option to buy loans originated on an alternative lender's platform. This allows a bank to increase their exposure to SME loans and pick the credits they wish to hold, while freeing up capital for online lenders. This type of partnership is among the most prolific in the online small business lending world, with banks such as JPMorgan Chase, Bank of America, and SunTrust buying assets from leading online lenders. The familiar David vs. Goliath script of the scrappy, internet-fueled startup vanquishing the clunky, brick-and-mortar-laden incumbent is repeated so often in startup circles that it is sometimes treated as inevitable. But in the real world, sometimes David wins, other times Goliath wins, and sometimes the right solution involves a combination of both. SME lending can remain a big business for banks, but only with deliberate choices about where to play and how to win. Banks must focus on areas where they can build a distinct competitive advantage, and find ways to partner with or learn from the new innovators.
100 Days Of President Trump's Corporate Government
We're 100 days into Corporate Government. While giant corporations have for decades and on a bipartisan basis exerted far too much influence over government decision-making, we've never seen anything like the Trump administration. The key officials in the federal government, starting with the president himself, come from Big Business; the administration openly seeks guidance and direction from giant corporations and corporate CEOs on policymaking; and the Trump administration is rushing to deliver subsidies, tax breaks and deregulatory gifts to the giant corporations to which the administration apparently owes its primary allegiance. A day-by-day review of the administration's first 100 days in office shows that virtually every day there has been a new, extraordinary grant of power to corporate interests and/or another development in Donald Trump's get-rich-quick-scheme known as the American presidency. America has never seen anything like this. The corporate capture began at the same moment as the Trump presidency. Corporations that have pending business before the president ― AT&T, Bank of America, Boeing, Chevron, Deloitte, JPMorgan Chase and United Parcel Service – were among the top funders of the inauguration and surrounding festivities. Giant companies and billionaires heaped more than $100 million on the festivities. New President Trump immediately signaled his intent to deliver on the corporate wish list by signing two executive orders, one designed to start the process of destroying the Affordable Care Act and another freezing all regulatory activity for 90 days. It's been downhill since then. President Trump has assembled what is probably the least qualified and certainly most corporate cabinet of all time. By way of reminder, this list includes: the former CEO of Exxon Mobil (Rex Tillerson, Secretary of State); a slew of former Goldman Sachs executives, so much so that the factions fighting for control of the administration each hail from Goldman Sachs (chief strategist Steve Bannon and top economic advisor Gary Cohn); a banker known as the Foreclosure King to run the Department of Treasury (Steven Mnuchin), an Amway heiress and Republican megadonor (Betsy DeVos); and a former state attorney general who allowed the fossil fuel industry to draft letters on attorney general letterhead on multiple occasions (Scott Pruitt, Environmental Protection Agency). Having a corporate cabinet has apparently not satisfied Trump's yen to hang out with the corporate elite. Trump started his first full weekday in office with a breakfast meeting with CEOs of a dozen corporations, and the meetings continue at a staggering pace. Trump is meeting with more than two CEOS every day, on average. These extraordinary gatherings, which have the explicit purpose of providing a way for Big Business to shape the administration's policies, are supplemented by the president's more casual interactions with corporate leaders at his Mar-a-Lago resort in Palm Beach, Fla., where the membership fee is now $200,000. Many of the gatherings reflect the administration's interest in giving special consideration to the views of specific corporate sectors, such as airlines, health insurance corporations, pharmaceutical corporations, and the automotive industry. One of every five of the corporate executives who met with the Trump administration within the first 100 days represented the banking or financial sector. It's not just meetings and personnel. The Trump administration is off to a roaring start on delivering the goodies to Big Business. One of every five of the corporate executives who met with the Trump administration within the first 100 days represented the banking or financial sector. It has taken care of its Dirty Energy friends. By executive order, Trump overturned Obama measures to block the Keystone and Dakota Access Pipelines. A few days later, the Army Corps of Engineers granted Energy Transfer Partners the final permit it needs to complete the Dakota Access Pipeline. It has also put in place measures to speed approval of other pipelines and fossil fuel projects, and is expected in the coming days to announce measures to upend the Environmental Protection Agency. In March, Trump announced a review – plainly aimed to be a roll back – of auto fuel efficiency standards. Just a few years ago, a U.S. government bailout saved the Big Three automakers from utter collapse. The modest reciprocity the government demanded was industry agreement to higher fuel efficiency standards – its most important move to reduce the emission of greenhouse gasses. Now the auto industry and the Trump administration are colluding to abrogate the deal. Consumers will be swindled in the process; the fuel economy rules that Trump is reversing were projected to save Americans up to $5,700 for every car they purchase, and $8,200 for every truck. Trump has issued an executive order aimed at undoing President Obama's Clean Power Plan – his signature effort to reduce climate pollution from coal powered plants; the administration is debating pulling the United States out of the Paris climate agreement; and administration officials have banned the use of the term "climate change." EPA Chief Scott Pruitt and his minions are delivering a host of other gifts to polluters, such as inaugural $1 million donor Dow, notably including a refusal to ban a brain-damaging pesticide. The administration is taking care of its Wall Street friends (meaning those who remain outside the administration). Trump has signed executive orders aimed at unraveling the Dodd-Frank Wall Street reform law ("We expect to be cutting a lot out of Dodd-Frank," the president told JPMorgan Chase's CEO Jamie Dimon and other CEOs in January) and repealing an Obama administration Labor Department rule requiring financial advisors to give advice based on their customers' best interests. The Labor Department rule, if adopted, will save consumers $17 billion a year in rip-off fees and bad advice. Contemplated changes in Dodd-Frank rules, the Wall Street Journal reports, will enable the six biggest banks to return $100 billion of reserves to shareholders. A staggering gift to the shareholders – at the cost of making the financial system far, far more unstable, insecure and prone to another 2008-style meltdown. Although its prospects are dim, Trump proposed a cruel, sadistic and military-industrial-complex-fawning budget, featuring $54 billion in increased spending on weapons and war, with gouging cuts to spending on everything from environmental protection to Meals on Wheels. Trump strongly backed the American Health Care Act (Obamacare repeal), and is now angling for it to be revived with slight modifications – which would make it still worse. To pay for a $350 billion tax cut for the super rich and large corporations, the bill would deny health care coverage to 24 million people by 2026. In addition to mass financial hardship, that denial of coverage would have meant that every year millions would suffer needlessly from treatable ailments and tens of thousands would die from preventable illness. Cutting off Medicaid payments to Planned Parenthood would have denied provision of care to millions of low-income women. And the bill's financing structure would have weakened Medicare's finances, imperiling still more Americans. Happily, bombast aside, odds appear slim of successfully bringing this proposal back from the dead. Perhaps most consequentially, the administration has commenced its full-fledged assault on health, safety, environmental, worker, consumer, financial security, civil rights and other regulatory protections. Deregulatory measures may well be Trump's signature achievement – both of the first 100 days and the entire presidency. What does it mean to deregulate? It means lifting restraints on corporate misconduct, and signaling to big companies that in pursuit of profit they are free to rip off, price gouge, poison and endanger Americans and our planet. In February, Trump signed a deregulatory executive order that directs federal agencies to repeal two federal regulations for every new rule they issue, and requires that any cost to industry of new rules be offset by savings from repealed rules. In this crazy scheme, regulators are not permitted to consider the benefits of rules. No one thinking sensibly about how to set rules for health, safety, the environment and the economy would ever adopt this approach – unless their only goal was to confer enormous benefits on Big Business. That is indeed the goal here. (With the Natural Resources Defense Council and Communication Workers of America, Public Citizen has sued President Trump and the administration to have this executive order overturned.) What are the chances that policy making will be advanced in the interest of Americans rather than giant corporations? Trump has eagerly signed into law a series of deregulatory measures to undo Obama administration achievements, using an obscure legislative vehicle known as the Congressional Review Act. Industries that have collectively spent more than $1 billion on lobbying and campaign contributions have seen their investments pay off many times over. Trump has gleefully signed measures making it easier for coal companies to pollute streams and rivers; authorizing Big Oil to hide payments to developing country governments; erasing obligations for government contractors to ensure the safety and health of their employees; and making it possible for cable and Internet providers to collect and sell our most personal information. It's hard to imagine there's anyone in the United States, not connected to Comcast, Verizon or another telecom company, who favors giving the telecoms the right to traffic in our personal data. Leaving aside confirmations, these Congressional Review Act regulatory repeals are, by far, the most significant legislative action during Trump's term. The corporate cronies heading or nominated to lead key regulatory agencies guarantee that deregulation will be a consistent and overriding theme of the administration. Trump's pick for Securities and Exchange Commission, Jay Clayton, if confirmed will assume office with unprecedented conflicts and zero demonstrated commitment to protecting investors. Scott Gottlieb, the nominee for Food and Drug Administration commissioner, has deep ties to the pharmaceutical industry and aims to roll back drug and device safety standards. President Trump and his new Federal Communication Commission Chair Ajit Pai are intent on repealing the agency's Net Neutrality rule, which is designed to protect a free and open Internet by preventing broadband providers from favoring their own or discriminating against others' content. The rule protects consumers from excessive tolls that could significantly impact their pocketbook, a diminished Internet that would degrade their user experience and, most importantly, from broadband provider censorship or undue influence over what they can see and access. Meanwhile, Trump's top regulatory advisor, the financial mogul Carl Icahn, is leveraging his role to push for very specific regulatory changes that would advantage his companies. The value of his oil refining companies has jumped by more than half a billion dollars in anticipation that Trump will deliver a revision to ethanol rules that Icahn is seeking. Icahn's conflicts are jaw-dropping, but it all comes from the top. President Trump has resisted calls to divest himself of his business empire, giving him unprecedented conflicts of interest and ensuring that this administration will go down as the most corrupt in history. Foreign policy conflicts are already manifest: Does Trump congratulate Turkish President Erdogan on his consolidation of authoritarian power because of Trump's business interests in Turkey? Does Rex Tillerson's refusal to condemn human rights violations in the Philippines follow from Trump's real estate ventures in that country? What's the correlation between warming relations with China and China's approval of trademark requests from Trump and Ivanka Trump? So too are domestic priorities distorted: Trump has ordered a repeal of an important Clean Water Rule opposed by golf courses. Policies at the Labor Department and National Labor Relations Board will directly impact his companies. The Chamber of Commerce is clamoring for legislation to destroy class actions – the kind of lawsuits filed by the ripped off students at "Trump University." And, as we look forward past the first hundred days, the dominant legislative debate will focus on tax policy. Donald Trump is an admitted exploiter of tax loopholes; and although he refused to make his tax returns public, he has bragged that he pays the lowest rate possible. What are the chances that he is going to support tax reform measures that would hurt his personal business empire? What are the chances this administration's conflicts will be resolved? What are the chances that policy making will be advanced in the interest of Americans rather than giant corporations? None, none and none – unless We the People mobilize in sufficient numbers to force a change. type=type=RelatedArticlesblockTitle=Related... + articlesList=584f3777e4b0e05aded57793,5849a199e4b04002fa804550,58404827e4b0c68e047f323c -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.
Neel down
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John Bean Tech, Texas Roadhouse, Wells Fargo, Citigroup and J.P. Morgan highlighted as Zacks Bull and Bear of the Day
John Bean Tech, Texas Roadhouse, Wells Fargo, Citigroup and J.P. Morgan highlighted as Zacks Bull and Bear of the Day
Maxine Waters' Political Career Makes Her Uniquely Suited To Take On Donald Trump
function onPlayerReadyVidible(e){'undefined'!=typeof HPTrack&&HPTrack.Vid.Vidible_track(e)}!function(e,i){if(e.vdb_Player){if('object'==typeof commercial_video){var a='',o='m.fwsitesection='+commercial_video.site_and_category;if(a+=o,commercial_video['package']){var c='&m.fwkeyvalues=sponsorship%3D'+commercial_video['package'];a+=c}e.setAttribute('vdb_params',a)}i(e.vdb_Player)}else{var t=arguments.callee;setTimeout(function(){t(e,i)},0)}}(document.getElementById('vidible_1'),onPlayerReadyVidible); Maxine Waters spends her weekends at home. For most people, this is not an unusual habit. But for Waters, it requires extra effort: Each Monday Congress has been in session over the past 26 years, she has embarked on a 2,300-mile commute from her home in Los Angeles to Washington, D.C., where she currently serves as one of the most powerful Democrats in the House of Representatives. A pre-dawn, cross-country flight to head to work in D.C. is irritating business. Former staffers say the six-hour journey suits the 78-year-old congresswoman just about as well as you'd expect. Her 5 p.m. Monday meetings are notoriously abusive. Aides who have spent the weekend gathering Capitol Hill intelligence, studying the intricacies of securities law and trying to win new political allies report to the full staff in front of a one-woman firing squad. "It's definitely a situation that can be slightly intimidating," said one former staffer, comparing the grillings to the Trump administration's televised press conferences. "She interrupts, doesn't let them finish, scolds them. These are people who are just trying to get her up to speed on what's happening." Waters yells at staffers for things like making eye contact with other aides. She unceremoniously fires people who give presentations that don't live up to her standards. The scene, at first, might clash with the image of Waters that has taken off on the internet since the election of Donald Trump. The meme-ified image of "Auntie Maxine" ― a fearless, quirky black woman who may not be related to you, but whom you love and respect for her straight talk just the same ― has become a favorite of millennials and brought Waters' Twitter account up to hundreds of thousands of followers. But, at a closer look, her staff meetings actually fit with her internet persona: Auntie Maxine, like many black women when it's time to buckle down at work, isn't about to play with you. "There's a genuineness," said R. Eric Thomas, a columnist for Elle.com who has written several viral articles with headlines like "You Will Never, In Your Entire Life, Get The Best Of Maxine Waters." "With Maxine, she's talking like everyone you respect in your life talks, but whom you wouldn't expect to be in Washington," he said. "If my mom and my aunt were running Washington, everyone would straighten up and fly right. I think a lot of people feel that way." And Waters' comments about Trump have fit that bill. "I think that he is disrespectful of most people," Waters told The Huffington Post. "He has no respect for other human beings. He lies, he cannot be trusted, I don't know what it means to sit down with someone like that who you cannot believe one word that they say once you get up by talking to them. I have no trust and no faith in him whatsoever." Rep. Hank Johnson (D-Ga.) said he helped coax Waters to come to Georgia for an upcoming event, given her overwhelming popularity in the black community. "She's hard-edged, hard-nosed, hard-driving, firm in her beliefs, and she is an institution unto herself. African Americans adore her," Johnson said. Waters' experience as a black woman in America gives the rage in her voice an added dose of authenticity. Waters has come about that anger honestly: Black people, particularly women, have generally been treated horribly throughout American history. Black men began serving as sheriffs, congressmen and senators as early as 1870, and black women often did a bulk of the work necessary to advance men into those positions and support them while in office. But it wasn't until 1968 ― when Maxine Waters was 30 ― that Shirley Chisholm became the first black woman elected to Congress. When Trump or his surrogates take on Waters, as they have since she began speaking out against his policies, the attacks come with a barely sheathed racist edge. Fox News host Bill O'Reilly recently mocked her "James Brown wig," saying he wouldn't listen to her concerns about Trump's politics because of it. In a viral response, Waters made clear who she is. "I'm a strong black woman, and I cannot be intimidated," she said. "I cannot be thought to be afraid of Bill O'Reilly or anybody. And I'd like to say to women out there everywhere: Don't allow these right-wing talking heads, these dishonorable people, to intimidate you or scare you. Be who you are. Do what you do. And let us get on with discussing the real issues of this country." The O'Reillys of the world see Waters as nothing but an angry black woman. And she is, indeed, an angry black woman ― rightfully and unapologetically so. "It's not good advice to get in a fight with Maxine Waters," said Zev Yaroslavsky, a former LA county supervisor who has known Waters for decades and who noted that O'Reilly apologized with uncharacteristic speed. "What's the 'Man of La Mancha' quote? 'Whether the stone hits the pitcher or the pitcher hits the stone, it's going to be bad for the pitcher.'" Waters' anger wards off rivals. It enhances her moral authority. And it comforts and amplifies her often equally angry constituents. "She can sometimes be animated, and I think people might think that that is evidence of lack of control," said Rep. Stephen Lynch (D-Mass.), who has long served with Waters on the Financial Services Committee. "But it is not. It is quite calculated, and most of the time, it is very effective." * * * Maxine Waters, one of 13 children, was born in 1938 in St. Louis, a city that was a capital of black culture and politics at the time. Waters' high school yearbook predicted she'd become speaker of the House ― an impressively optimistic prediction, given that she graduated a decade before the Voting Rights Act mandated African Americans' right to vote. Waters started her family at a young age and had two children before moving west to LA and finding a gig as a service representative for Pacific Telephone, while working her way slowly toward a sociology degree. She later became a supervisor for a head start program in Watts, a black working-class neighborhood in South Los Angeles ― her first foray into professional public service. One night in August 1965, cops pulled over an African-American motorist in Watts and beat him badly. Then, as now, police violence was a not-unheard-of occurrence. But there's no telling when a single moment becomes a spark that lights a fire, and this one lit up Watts. The neighborhood erupted in protest, leading to what became known as the Watts Rebellion — or, to white America, the Watts Riots. Following the rebellion, a small group of black politicians and organizers came together at a crucial meeting in Bakersfield in 1966. Waters, whose activism in the community was becoming increasingly high profile, was among them. From that meeting came a long-term, statewide wave of black politicians from California, focused on improving conditions for communities of color. "Anybody who became 'somebody' was there," James Richardson, a Sacramento Bee reporter who covered much of Waters' early career, said of the Bakersfield summit. "They plotted over how to gain electoral power and it was a watershed moment that wasn't really seen." Waters' work in the community eventually led to a gig that would define her approach to politics the rest of her life: serving as a top aide to LA Councilman David Cunningham Jr. When she's been asked since why she continues flying cross-country every single week, despite facing no political threat to her seat, she recalls what she learned as a chief deputy to Cunningham: the importance of constituent service. In 1976, Waters ran for and won a seat in the California State Assembly. She has been in elected office ever since. "It's as if she never left the public housing projects in Watts in all of her life," said her longtime ally Willie Brown, a speaker of the Assembly who went on to become mayor of San Francisco. * * * Waters has been in political life long enough to see the Democratic Party transform several times over. She is, in many ways, a holdover from another time. But the world seems to be coming full circle. Today, nearly every Democrat identifies as "progressive," but decades ago the word had a specific meaning and referred to a movement launched in opposition to urban machine politicians who relied on transactional politics and constituent service to consolidate power. Progressives prioritized anti-corruption and the integrity of the political process. The penny-ante palm greasing of the city machine gave way to the sanitized, large-scale corruption of national politics by corporate money. With government watchdogs on the prowl, politicians lost the ability to bestow jobs and other benefits on supporters in the community. It was all well-intentioned, but as the power to better the community moved to the private sector and out of politicians' hands, quality of life in the community steadily declined. Waters is not a good-government progressive. She is an old-school liberal, one who believes that outcomes matter more than process. She prides herself on constituent service. And she often wins. "It is hard to think of any single member of Congress who has done more than Maxine to protect the financial reforms and prevent another financial crisis," said Sen. Elizabeth Warren (D-Mass.). "Her work touches every family in America. She's really been good." * * * Waters' keen sense of public opinion is as strong as that of any member of Congress. She has leaned right into the Auntie Maxine persona as yet another method of relating to constituents. At a private meeting of her House colleagues earlier this year, Democrats were debating the stunning level of grassroots energy around the country — and how it could be harnessed to regain power. Waters rose to address her colleagues, stressing the importance of learning the language the kids use today — and explained the meaning of the phrase "stay woke." (The phrase originated as a way for black activists to remind each other of systemic inequality; it has since evolved to describe anybody who professes concern for social justice ― up to and including ride-share companies.) Waters' grassroots touch — combined with her grueling work ethic and endless frequent flyer miles — is what allowed Waters to know long before national groups, and before federal regulators, that big banks were engaging in rampant mortgage servicing fraud and foreclosure scams. It has helped her stay far ahead of the national curve on issues such as mass incarceration, the drug war and police brutality. And by sensing — and leaping to satiate — a tremendous hunger among the Democratic base to not only delegitimize and de-normalize Trump, but to actually impeach him, she's fueled her latest star turn. "Maxine is a grassroots person," said Yaroslavsky, the former LA county supervisor. "She's as comfortable in the district as she is in the committee. ... You learn to take care of the people who pay your salary. And sometimes she steps on toes doing that, but usually she takes the populist position because that's what she thinks is her role." "Maxine was a tough person. You didn't cross her. She could give a fiery speech on the floor and send your bill to the dumper. Some nicknamed her 'Mad Max' behind her back," Richardson said of her state Assembly years. "She would represent [Assembly Speaker Willie Brown] in budget meetings, so everyone knew that Maxine was to be taken seriously because she was speaking for him. And for herself." Waters' crowning achievement in the Assembly was a bill she co-authored with Brown, who'd also been at the Bakersfield meeting, and convinced Republican Gov. George Deukmejian to sign. It divested California's mammoth pension system from South African interests in protest of apartheid. Convincing the governor was difficult, Brown reported, but Waters got to work, demonstrating an interest in issues that Deukmejian cared about, such as farming regulations in California's Central Valley, coastline and water resources in Los Angeles. She was able to demonstrate her commitment to his issues enough to engender the goodwill necessary to receive his support, Brown said. It was in stark contrast to the image of the blustering demagogue, and it's one colleagues said they've seen over and over in the years since. The coastal and farming policy insights she picked up in pursuit of Nelson Mandela's freedom, indeed, would become handy as she helped shape a flood insurance bill 30 years later. (Brown is selling himself a bit short, as he always played a major role. Richardson notes that the speaker effectively appealed to Deukmejian's family history. The governor, who was of Armenian descent, lost family in the Armenian genocide.) California blocked its huge pension fund from investing in South African interests in 1986. It was a watershed moment in the anti-apartheid movement, and Mandela was released in 1990. Brown said Mandela traveled to California during his first United States tour following his release to thank Waters for her part in freeing him. "Maxine's history is replete with successes, but none greater than freeing Nelson Mandela," Brown said. That may sound like too much credit for a collective action, but Brown says Waters' move set off a chain reaction ― as she hoped it would ― that led to his release. "Nelson Mandela was freed because Maxine Waters orchestrated a process in the legislature to divest our pension fund on the basis of apartheid," Brown said. "This was quickly followed by Congress and other municipalities and it led clearly to the ultimate freedom of Nelson Mandela." Indeed, Waters' dominance of the Assembly in the 1980s is hard to overstate. Nobody who saw the authority the diminutive young woman wielded in the chamber is surprised at what she has become today. "The things going on in California in the '80s make DC look like nothing," Richardson said. "We'd go months without a government, everything shut down, over pensions and benefits for teachers and the poor." Waters withstood all of that. Persisted, even, you could say. "That's her style. She will not be intimidated," Richardson said, echoing language Waters used in response to O'Reilly's recent racist attack on her. Although Waters worked the inside game in the Assembly, she held on to her outsider status throughout the 1980s, twice going against the party establishment in backing Jesse Jackson's bid for the Democratic presidential nomination. When he fell short, she floated the possibility that black voters should support a third party if Democrats remained unresponsive to their concerns. And so when she ran for Congress in 1990, the party endorsed her primary opponent ― but Waters won anyway. She has been fighting established power ever since, and her natural impulse with Trump taking the White House this year was to charge right at him. Immediately after the election, the Democratic Party was caught in a debate over how to approach a Trump presidency. Would they try to work with him where possible, or resist his agenda across the board? Waters, who boycotted his inauguration, seems to see the answer as simple and has promised a full-blown rejection of Trump. "As I said earlier to someone I was talking to," Waters told HuffPost, "I became very offended by him during his campaign the way he mocked disabled journalists, the way he talked about grabbing women by their private parts ... the way he stalked Hillary Clinton at the debate that I attended in Missouri where he circled her as she was standing trying to give her petition on the issues. The way he has praised [Russian President Vladimir] Putin and talked about the great leader he was. And the way that he pushed back even on Bill O'Reilly on the Fox show when Bill O'Reilly said in so many words, 'Why are you so supportive of Putin? He's a killer.' And he said, 'so what,' in so many words, '[it's] the United States, people get killed here all the time' or something like that." "I think that for the future, we have to deal with this administration and organizing to try and take back the House and the White House," she continued. Mikael Moore, Waters' grandson who served as a longtime aide to her in Congress, put it succinctly: "She runs toward the fight." I never ever contemplated attending the inauguration or any activities associated w/ @realDonaldTrump. I wouldn't waste my time.— Maxine Waters (@MaxineWaters) January 15, 2017 "She is operating no differently than she did prior to Trump's arrival," Brown said. "She generated just as much attention during the Bush years. [During Obama's and Clinton's terms] she had the great joy of not having to do that." During the 2016 election, Waters clashed with Democratic presidential candidate Bernie Sanders when she backed Hillary Clinton in the primary instead. Some of her staffers were frustrated by Waters' early enthusiasm for Clinton, whom they saw as much weaker on Waters' signature issue of bank reform. When Sanders was invited to address the Democratic caucus in July 2016 — after the primary was effectively over, but while Sanders was continuing to campaign — some members of the Congressional Black Caucus, of which Waters is a member, heckled him. The CBC has a long, fraught relationship with Wall Street, often allying with big banks for fundraising purposes (much like the rest of the party). And since 2013, Waters had been the banks' chief adversary in leadership, warning members of the caucus that helping Wall Street could result in a lot of pain for their black constituents a few years down the line. But at the Sanders address, Waters gave her colleagues cover by taking on Sanders. "Basically her question was, 'Why do you keep talking about breaking up the banks when we already fixed this with Dodd-Frank?'" recalls one Democratic staffer who witnessed the confrontation. This fed a narrative the Clinton campaign was trying to foster — Bernie was a dreamer who didn't understand policy. Most members of Congress, of course, do not understand financial policy ― they defer to leaders on the Financial Services Committee. Here was the top Democrat on that committee saying Sanders didn't get it. It was powerful. But Waters' own staffers knew their boss was twisting the policy. "Too big to fail" is alive and well in American banking. Dodd-Frank gave regulators the tools to fix the problem, but they haven't used them, and Sanders wanted to force their hands. "It was pretty deflating," one former Waters staffer says. * * * Waters combined her fierce nature with her constituent savvy after the 1992 LA riots, with a response that would come to define her career: She took a hard line with colleagues, but used a soft touch with her those who would vote for her. In April 1992, communities across South Los Angeles, enraged by the acquittals of four white police officers in the beating of Rodney King, launched what locals still refer to as an uprising — known nationally as the LA riots. In the wake of the chaos, Waters, who was then in her first term in Congress, showed up uninvited to a meeting President George H.W. Bush had called to discuss "urban problems," according to a New York Times report. "I've been out here trying to define these issues," she told Speaker Thomas S. Foley. "I don't intend to be excluded or dismissed. We have an awful lot to say." Back home, she struck a more poetic note, addressing constituents in a letter reprinted by the Los Angeles Times. In it, she employed a canny understanding of the zeitgeist and the language of the moment: My dear children, my friends, my brothers, life is sometimes cold-blooded and rotten. And it seems nobody, nobody cares. But there are the good times, the happy moments. I'm talking about the special times when a baby is born and when gospel music sounds good on Sunday morning. When Cube is kickin' and Public Enemy is runnin' it. When peach cobbler and ice cream tastes too good, the down-home blues makes you sing and shout, and someone simply saying, 'I love you' makes you want to cry. Her letter went on to condemn police brutality, predatory lending in communities of color, for-profit schools and a racist justice system. Save a few names, it could have been written today. In 1994, Republicans won control of Congress and Waters immediately joined the resistance. When activists from the affordable housing group ACORN were arrested early the next year for protesting newly minted Speaker Newt Gingrich (R-Ga.), Sen. Ted Kennedy (D-Mass.) demanded that the Capitol Police release them, but he had no luck. Waters did more than demand. She marched down to the station herself and refused to leave until the protesters were let go. The police relented. Those are exactly the sort of moments that have made Waters' resistance to Trump so resonant: She stands up to power on behalf of causes and people who are not broadly popular across the political spectrum. Yet she goes there. In one of Waters' first votes in Congress, on the 1994 crime bill that has since become infamous as an avatar of mass incarceration, she and other Democrats were under tremendous pressure to do something about rising crime rates. Hillary Clinton, who was then first lady, warned of "super predators," language she apologized for 22 years later. Sanders, an independent representing Vermont in the House, voted for it — a capitulation he would regret during his 2016 presidential campaign. Two-thirds of the Congressional Black Caucus ended up voting for the bill, including a former Black Panther. Waters voted no. But Waters hasn't just stuck to issues considered traditionally liberal, or to issues that affect a disproportionate number of black Americans, such as criminal justice or housing policy. When Rep. Paul Kanjorski (D-Pa.) was defeated in 2010, "everybody assumed" Waters would stay on the housing subcommittee, former Rep. Barney Frank (D-Mass.) recalled. 2017 mood: Maxine Waters pic.twitter.com/qR7HnL0nH6— Rachel Fisher (@TheRachelFisher) January 17, 2017 She chose securities, not housing. "That surprised people," he said, "but it was very sensible" — savvy, even, given the rising importance of Wall Street issues to the liberal base — and defied "the notion that she was just some bleeding-heart who could be for poor people but couldn't handle the hard stuff." Two years later, when Frank retired, the top position became available. Despite a widespread presumption on K Street that she would be passed over for Rep. Carolyn Maloney, a white New York lawmaker much friendlier to Wall Street, Waters took the ranking member position. "She has made a career out of people underestimating her," said Lynch, who serves with her on the committee. "She really has." Bank lobbyists quickly found that Waters didn't need to be a policy wonk on Day One to handle the job. "When Mr. Frank had the committee, he was so well-versed in many of the subjects that the debate tended to center around him, but when Ms. Waters became ranking member, she really sought out members who had expertise in certain areas and it really became more of a team," Lynch said. "Barney was a wonk, financial policy wonk, a very, very bright guy and has a whole different style than Maxine. She comes to that job with a whole different set of tools and she uses them quite effectively." She's been forced into wonk mode since taking the job. "Yeah, she's not happy about it, but she's become much more embroiled in the nuances of finance and economic policy," he said. In 2013, during the fall of her first year as ranking member, Wall Street pushed a bill that would offer taxpayer backing for derivatives trades. It was pitched as a modest technical change and had coasted through the House the session before. Some of Waters' CBC colleagues were working hard for the bill and trying to get the entire caucus to back it as a bloc. Waters saw it as undermining the safeguards Dodd-Frank had put in place, but it flew through committee on a 53-6 vote, over Waters' opposition. Then Waters went to war behind the scenes, forcing the caucus to take no position on the bill. On the House floor, it passed, but a majority of Democrats voted against it, rendering it dead in the Senate and meaning it would have less sway with regulators who look to vote totals for guidance. Waters' bomb-throwing reputation belies an ability to work with Republicans when she needs to. The GOP chairman of the Financial Services Committee, Rep. Jeb Hensarling of West Texas, for instance, had no plans to take up a major priority of Waters', a reform of flood insurance that was critical to a coastal state like California. "West Texas hasn't had a flood since Noah and he was not open to the idea at all," Lynch said of the 2013 fight. So Waters went to work. "She actually formed a coalition with coastal Republicans and coastal Democrats and got that bill taken away from Mr. Hensarling. The speaker took control of it and we eventually got it passed, and I thought that was masterful to be in the minority and be able to do that," Lynch said. "She built those coalitions with Republicans from Mississippi and Florida and California, Louisiana. I thought that was probably the toughest fight but she was very successful." Wall Street fought Waters again during the lame-duck session of 2014. The period after an election and before a new Congress is sworn in is supposed to be a bit of a time-limited, all-you-can-eat buffet for K Street. A year earlier, Republicans had forced a government shutdown by demanding that Congress repeal the Affordable Care Act as part of any deal to maintain federal operations. Democrats had gone to the mat to stand up for their most high-profile achievement. This time around, Wall Street reform was on the menu. Senate leaders in both parties had agreed to include a new slate of federal subsidies for credit default swaps — the risky trades that demolished AIG in 2008. Senate Majority Leader Harry Reid (D-Nev.) and President Barack Obama seemed poised to give the GOP the win. Nancy Pelosi, the Democrats' leader in the House, did not like confronting Obama in public, and she certainly didn't want to risk a public relations debacle that could result from a government shutdown — not for an obscure Dodd-Frank provision. Waters didn't give her a choice. She decried the bill in press conferences and TV appearances. More importantly, she started whipping members against the bill. If funding the government required subsidizing risky Wall Street speculation, Democrats should force the shutdown and let Republicans explain why they wanted to help big banks so much, Waters argued. She set up a makeshift war room in her Capitol Hill office, and even recruited Rep. Gwen Moore (D-Wis.) — a frequent friend of banks on the House Financial Services Committee — to call members and urge them to shoot down the spending bill. She brought another recruit to the fight, too, reaching out to Rep. Frank, who just a few weeks before had voiced support for the provision Republicans were trying to push through. Frank joined Waters for a phone call with reporters and advocated for killing the bill. "I didn't change my substantive position," Frank insists today, putting his advocacy effort in the broader context of a fight to defend the integrity of Dodd-Frank. "I didn't think [the measure in question] was very important. But I thought it set a very bad precedent to open up Dodd-Frank to amendment without debate." Frank had become convinced by the argument Waters was making, that the politics were just as important as the policy ― and caving on the politics could lead to much worse policy. She sometimes seems like a bomb thrower, but the people at whom she threw the bombs often turn out to have deserved it. Former Rep. Brad Miller, a colleague on the Financial Services Committee The bill, which had been expected to pass with little fanfare, faltered. House Speaker John Boehner (R-Ohio) didn't have the votes. He knew he couldn't bring around the hard-liners in his own caucus, who were building their own careers by opposing Boehner as a big-spending liberal sellout. He needed Democrats, and the Waters war room was working. Even Pelosi came out against the bill, granting angry Democrats all the cover they needed to vote no. The bill looked dead. Then Obama and JPMorgan Chase CEO Jamie Dimon began making personal phone calls to individual House members imploring them to support the package. They eventually got the votes. Waters dinged the president as a Wall Street collaborator. "I know that the president was whipping and he was supporting this bill and I know that Jamie Dimon was whipping," she told reporters after the vote. "That's an odd combination." The December 2014 fight was painful. Waters lost. But the fight galvanized the party against Wall Street and embarrassed the president. Waters and her allies made their point. Obama and Reid never agreed to slip pro-bank measures into spending bills again. "Maxine led the charge to defeat that bill in the House," Sen. Warren recalled. That success all goes back to Waters' connection to her constituents. Former Reps. Brad Miller (D-N.C.) and Mary Jo Kilroy (D-Ohio) both served on the Financial Services Committee with Waters, and both recall that she was the first person they heard identify mortgage servicing fraud as an issue that needed attention. Going around her district, it was something she kept hearing about. "I recall Maxine as being relentless in calling out Wells Fargo and other loan servicers on their policies and practices with respect to the slow place and many obstacles they put on loan modifications," Kilroy said. "She was really one of the first, maybe the very first, to raise the issue of mortgage servicer conduct, which she heard about from her constituents in California. That was before the national advocacy groups were really on it," Miller said. "She kept asking witnesses at hearings about servicing problems," Miller said. "I thought it was a distraction at the time. But it gradually became more and more evident what a problem servicer conduct was." By 2011, Waters wanted to force the issue. That January, she joined with Miller, Lynch and Rep. Keith Ellison (D-Minn.) to write a letter to the inspector general of the Federal Housing Finance Agency challenging a recent settlement with Bank of America, suggesting it had failed to address the problem. Miller thought Waters' draft was too strongly worded. "I insisted she dial it back," he recalled, an insistence Lynch recalls as well. She did. Months later, when Miller read the inspector general's report that had been sparked by the letter, he concluded that her initial scathing letter had been entirely appropriate. "When we got the IG's report, I wished that we'd sent a letter harsher than her draft," Miller said. "She sometimes seems like a bomb thrower, but the people at whom she threw the bombs often turn out to have deserved it." Taryn Finley contributed reporting. Sign up here to get Ryan Grim's newsletter, Bad News, in your inbox. -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.
Jamie Dimon is Wrong. Taxpayers Still On Hook for Wall St.
Neel Kashkari, MediumOn April 4, JPMorgan Chase Chairman and CEO Jamie Dimon published his annual shareholder letter, much of which focused on public policy and…
Banks Are Spending Billions To Make Rich People Richer
The CEO of America's largest bank made a startling announcement last week: His company has too much money, and he plans to throw away its profits on rich people. He didn't quite put it that way, of course. In his annual letter to shareholders, JPMorgan Chase CEO Jamie Dimon boasted about his company buying $25.7 billion of its own stock over the past five years, and hinted it could buy back another "big block of stock this year" to further boost share prices. At their best, stock buybacks (also known as "share repurchases") are essentially pointless. At their worst, buybacks drain resources from productive economic activity to provide a cheap high for Wall Street. Companies buy their own stock to raise the stock price: Removing shares from the market elevates the value of those that remain. Money is funneled from corporate coffers to shareholders. Companies could, of course, do other things with their profits. They could raise pay for their employees or provide better benefits. They could develop new product ideas or upgrade old equipment to improve future production. The point of a company, after all, is not simply to generate and distribute cash, but to solve problems for society, or at least invent cool stuff that makes life more interesting and fun. This doesn't have to be altruistic ― inventing awesome stuff raises stock prices when the awesome stuff sells. Buybacks overwhelmingly benefit rich people. Less than 22 percent of Americans own $25,000 or more in stock, even through retirement accounts, according to research from New York University economist Edward N. Wolff. Those who own lots of stock are heavily concentrated at the top. More than 92.8 percent of households making at least $250,000 a year own at least $10,000 in stock, compared with just 19.1 percent of households earning between $25,000 and $49,999. Households in the top 1 percent receive an average of 36 percent of their income from capital gains (stocks, bonds and other financial investments), according to the Congressional Budget Office, while those in the lowest 20 percent receive an average of about 5 percent of their income this way. Some of the wealthy people who benefit most from buybacks are corporate CEOs, who generally receive most of their compensation in stock. To fuel the economy, banks don't have to make or invent anything that people use. They just have to extend financing to people who want to make stuff, or to people who want to buy it. This isn't charity ― banks earn big profits by lending. But sometimes they'd rather just buy their own stock. Since the financial crisis, the nation's six largest banks have spent a combined $157.4 billion buying up their own stock, according to data from S&P Global Market Intelligence. JPMorgan, Goldman Sachs and Wells Fargo have spent over $36 billion each. All six of those banks declined to comment for this article. Defenders of stock buybacks argue they can be a useful corporate strategy in a weak economy. If companies can't find a market for their products, then placating investors through buybacks isn't a terrible use of funds until the economy turns up. Big Bank buybacks don't fit that pattern ― they've expanded tremendously during the last five years of economic recovery, nearly quadrupling from $10.6 billion in 2012 to $41.9 billion in 2016. Dimon's annual missives aren't really for his shareholders ― they're public political statements from America's most prominent banker. In the latest edition, he noted that trillions of dollars in war spending, mass incarceration and the student debt explosion have damaged the economy. But while he didn't offer specific policy remedies for those political problems, he did make recommendations on economic policy, arguing that excessive capital and liquidity regulations are tying up money his bank could deploy to put people to work. Dimon called for weakening these rules, which require banks to rely on less debt and hold more cash in case of trouble. Maybe it's true that not one dollar of the more than $9 billion JPMorgan spent on buybacks in 2016 could have gone toward making a good loan to a creditworthy business. But if so, weakening capital and liquidity rules won't help banks get more money out the door ― the economy is just out of good lending opportunities. In that scenario, JPMorgan would have nothing productive to do with the money freed up by weakening capital and liquidity rules. The broader economy would be shouldering more risk in order to further enrich wealthy bank shareholders without seeing any increase in lending. Big banks have a history of being reckless with buybacks. Citibank swallowed up over $7.5 billion of its own stock in 2006 and 2007, before it needed a government bailout, as University of Massachusetts Lowell economics professor William Lazonick noted in 2008. Morgan Stanley spent over $7 billion on buybacks over the same period before it too needed to be bailed out. Bear Stearns spent $6 billion before needing a government-backed rescue from JPMorgan. Lehman Brothers spent over $5 billion before missing the bailout train and going bankrupt. It's one more way Wall Street fuels economic inequality. Zach Carter is a co-host of the HuffPost Politics podcast "So That Happened." Listen to the latest episode, embedded below: To listen to this podcast later, download the show on iTunes. You can also find it on Google Play Music, RadioPublic, or Acast. -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.
Banks Are Spending Billions To Make Rich People Richer
The CEO of America's largest bank made a startling announcement last week: His company has too much money, and he plans to throw away its profits on rich people. He didn't quite put it that way, of course. In his annual letter to shareholders, JPMorgan Chase CEO Jamie Dimon boasted about his company buying $25.7 billion of its own stock over the past five years, and hinted it could buy back another "big block of stock this year" to further boost share prices. At their best, stock buybacks (also known as "share repurchases") are essentially pointless. At their worst, buybacks drain resources from productive economic activity to provide a cheap high for Wall Street. Companies buy their own stock to raise the stock price: Removing shares from the market elevates the value of those that remain. Money is funneled from corporate coffers to shareholders. Companies could, of course, do other things with their profits. They could raise pay for their employees or provide better benefits. They could develop new product ideas or upgrade old equipment to improve future production. The point of a company, after all, is not simply to generate and distribute cash, but to solve problems for society, or at least invent cool stuff that makes life more interesting and fun. This doesn't have to be altruistic ― inventing awesome stuff raises stock prices when the awesome stuff sells. Buybacks overwhelmingly benefit rich people. Less than 22 percent of Americans own $25,000 or more in stock, even through retirement accounts, according to research from New York University economist Edward N. Wolff. Those who own lots of stock are heavily concentrated at the top. More than 92.8 percent of households making at least $250,000 a year own at least $10,000 in stock, compared with just 19.1 percent of households earning between $25,000 and $49,999. Households in the top 1 percent receive an average of 36 percent of their income from capital gains (stocks, bonds and other financial investments), according to the Congressional Budget Office, while those in the lowest 20 percent receive an average of about 5 percent of their income this way. Some of the wealthy people who benefit most from buybacks are corporate CEOs, who generally receive most of their compensation in stock. To fuel the economy, banks don't have to make or invent anything that people use. They just have to extend financing to people who want to make stuff, or to people who want to buy it. This isn't charity ― banks earn big profits by lending. But sometimes they'd rather just buy their own stock. Since the financial crisis, the nation's six largest banks have spent a combined $157.4 billion buying up their own stock, according to data from S&P Global Market Intelligence. JPMorgan, Goldman Sachs and Wells Fargo have spent over $36 billion each. All six of those banks declined to comment for this article. Defenders of stock buybacks argue they can be a useful corporate strategy in a weak economy. If companies can't find a market for their products, then placating investors through buybacks isn't a terrible use of funds until the economy turns up. Big Bank buybacks don't fit that pattern ― they've expanded tremendously during the last five years of economic recovery, nearly quadrupling from $10.6 billion in 2012 to $41.9 billion in 2016. Dimon's annual missives aren't really for his shareholders ― they're public political statements from America's most prominent banker. In the latest edition, he noted that trillions of dollars in war spending, mass incarceration and the student debt explosion have damaged the economy. But while he didn't offer specific policy remedies for those political problems, he did make recommendations on economic policy, arguing that excessive capital and liquidity regulations are tying up money his bank could deploy to put people to work. Dimon called for weakening these rules, which require banks to rely on less debt and hold more cash in case of trouble. Maybe it's true that not one dollar of the more than $9 billion JPMorgan spent on buybacks in 2016 could have gone toward making a good loan to a creditworthy business. But if so, weakening capital and liquidity rules won't help banks get more money out the door ― the economy is just out of good lending opportunities. In that scenario, JPMorgan would have nothing productive to do with the money freed up by weakening capital and liquidity rules. The broader economy would be shouldering more risk in order to further enrich wealthy bank shareholders without seeing any increase in lending. Big banks have a history of being reckless with buybacks. Citibank swallowed up over $7.5 billion of its own stock in 2006 and 2007, before it needed a government bailout, as University of Massachusetts Lowell economics professor William Lazonick noted in 2008. Morgan Stanley spent over $7 billion on buybacks over the same period before it too needed to be bailed out. Bear Stearns spent $6 billion before needing a government-backed rescue from JPMorgan. Lehman Brothers spent over $5 billion before missing the bailout train and going bankrupt. It's one more way Wall Street fuels economic inequality. Zach Carter is a co-host of the HuffPost Politics podcast "So That Happened." Listen to the latest episode, embedded below: To listen to this podcast later, download the show on iTunes. You can also find it on Google Play Music, RadioPublic, or Acast. -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.
3 Key Takeaways From JPM's Q1 Earnings
Thursday marked the first wave of the big banks' quarterly earnings. Wells Fargo (WFC), Citigroup (C) and J.P. Morgan (JPM) all reported their earnings today. Among them, JPM is clearly leading the pack with its solid first quarter earnings.
Прибыль банков Jpmorgan и Citigroup выросла на 17%
Американские банки JPMorgan Chase и Citigroup представили финансовую отчетность за первый квартал. Их результаты оказались лучше ожиданий аналитиков. Чистая прибыль JPMorgan выросла на 17% в сравнении с тем же периодом 2016 года и составила $6,4 млрд. Выручка увеличилась на 6%, до $24,7 млрд. Также на 17% выросла и чистая прибыль Citigroup — до $4,1 млрд, выручка повысилась на 3%, до $18,1 млрд. «Американские потребители и бизнес здоровы в целом, и с инициативами, способствующими росту, а также с улучшением сотрудничества между правительством и бизнесом американская экономика продолжит улучшаться»,— прокомментировал отчетность генеральный директор JPMorgan Джейми Даймон. По мнению экспертов, хорошая отчетность банков в числе прочего связана с повышением…
Tough ROE to hoe
U.S. mega-banks are all dressed up with few places to grow. Citigroup, JPMorgan and Wells Fargo kicked off the year with results that exceeded expectations. Some of the investor exuberance over possible
Чистая прибыль JPMorgan выросла на 17% в I квартале
Чистая прибыль крупнейшего по величине активов банка США JPMorgan в I квартале 2017 г. составила $6,4 млрд или $1,65 за акцию, увеличившись на 17% по сравнению с аналогичным периодом прошлого года.
Чистая прибыль JPMorgan выросла на 17% в I квартале
Чистая прибыль крупнейшего по величине активов банка США JPMorgan в первом квартале 2017 года составила $6,4 млрд или $1,65 за акцию, увеличившись на 17% по сравнению с аналогичным периодом прошлого года.
JPM Beats As FICC Revenues Jump, Offset By Troubling Spike In Credit Card Charge Offs
On several occasions in the past month Jamie Dimon took the opportunity to preview what would be a strong quarter for JPMorgan, and sure enough, he was on the money when moments ago JPM reported Q1 profit of $6.45 billion, or EPS of $1.65, up from an adjusted $1.35 reported a year ago and beating estimates of $1.52; JPM also reported Q1 adjusted revenue of $25.6 billion, also beating the $25.1 billion expected, and rising $1.5 billion higher Y/Y. It also appears that JPM's cost-cutting push is over, with Q1 compensation expenses $8.20b, above the expected $7.98Bn. The main driver behind the beat was the bank's market trading and investment banking group, where overall Investment Banking revenue in Q1 rose $1.65 billion, above the $1.61 billion expected. More importantly, however, the most lucrative group, FICC, reported sales and trading revenue of $4.22 billion, up 17% Y/Y, driven by securitized products, rates and credit, and beating estimates of $4.02 billion. Equity sales and trading also beat in the quarter, with revenue of $1.61Bn, higher than the $1.45BN expected. Of note: JPM's disclosed VaR has tumbled from 55 in Q1 2016 to only 25 in the current quarter, arguably the lowest in the bank's recent history, ever since it was caught fabricating its VaR several years ago. * * * While the bank's S&T and I-banking group did better than expected, some concerns emerged in the bank's consumer and community banking group, where credit costs surged $1.4 billion, up nearly $400 million driven by a write-down in the bank's student loan portfolio and higher card net chargeoffs. How much higher? As the chart below shows, total net charge-ooffs in Q1 rose to just shy of $1 billion, the highest in four years. Overall, JPM's Q1 allowance for loan losses was $1.32b, above the est. $1.30b, and in line with the previous quarter. Also of note for those looking for clues on JPM's NIM: the bank reported that the 1Q net yield on interest-earning assets rose to 2.33%, above the 2.29% estimate. Now that the E&P credit storm is over, JPM once again reduced its loan loss reserve, which declined $0.6 billion to $13.4 billion from $14.0 billion a year ago, with JPM saying that "both wholesale and consumer credit quality are relatively stable" Finally, the bank also previewed 2Q 17 net interest income to be up ~$400mm QoQ and 2017 net interest income to be up ~$4.5B YoY based upon the implied curve, although that implied curve is fast changing now that Trump is no longer a strong dollar advocate. JPM also said to expect 2017 adjusted expense to be ~$58B and 2017 net charge-offs to be $5B. Full presentation below
Keiser Report: What is Wrong with America? (E 1056)
In this episode of the Keiser Report Max and Stacy ask, "what is wrong with America?" The answer is "Jamie Dimon". In the second half Max interviews Lee Camp, comedian and host of Redacted Tonight, about the coming financial crash and the ongoing cultural breakdown happening as xenophobia and Trump-induced hysteria take hold .RT LIVE http://rt.com/on-air Subscribe to RT! http://www.youtube.com/subscription_center?add_user=RussiaToday Like us on Facebook http://www.facebook.com/RTnews Follow us on Twitter http://twitter.com/RT_com Follow us on Instagram http://instagram.com/rt Follow us on Google+ http://plus.google.com/+RT Listen to us on Soundcloud: https://soundcloud.com/rttv RT (Russia Today) is a global news network broadcasting from Moscow and Washington studios. RT is the first news channel to break the 1 billion YouTube views benchmark.
Команда Трампа. Голдман Сакс снова на коне
Дональд Трамп объявил имя будущего министра финансов США: им станет Стивен Тёрнер Мнучин (Steven Terner Mnuchin). Для кого-то это явилось неожиданностью. Ведь среди претендентов на высокий пост называли исполнительного директора банка JPMorgan Джейми Даймона, члена палаты представителей Джеба Хенсарлинга... У Стивена Мнучина, однако, было важное преимущество: в предвыборной кампании Трампа он работал финансовым менеджером. Кроме того, что...
Во время 9/11 Дик Чейни был не там, как это он утверждал официально.
Напомню, что я - аналитик и подборка информации идет соответственно- аналитическая, предполагающее самостоятельное изучение материалов.сначала с вами вспомним как звучит официально:Википедия:9:32: Диспетчеры аэропорта Даллеса в Виргинии наблюдают «цель на первичном обзорном радаре, двигающуюся с высокой скоростью в восточном направлении», относя это к рейсу 77.9:33 до 9:34: Руководитель башни аэропорта Рейган сообщает центру Секретной Службы Белого дома, что «в вашу сторону летит самолёт, который не выходит с нами на связь.» имея в виду рейс 77. Белый дом готовится к эвакуации, когда башня сообщает, что рейс 77 повернул, и заходит на посадку в аэропорт Рейган.9:34: Командный центр ФАА передает штаб-квартире ФАА имеющуюся информацию о рейсе 93.9:37: Вице-президент Чейни направляется в подземный бункер по туннелю.9:37:46: Рейс 77 врезается в западное крыло здания Пентагона, отчего начинается сильный пожар. Это крыло Пентагона находится на ремонте, и большинство офисов в нём не заняты. Погибают все 64 человека на борту и 125 человек в здании.1 канал, Россия:В 8:46 первый самолет врезался в северную башню Всемирного торгового центра в Нью-Йорке. Мэр города и руководитель службы спасения немедленно выехали к башням-близнецам. "Подъехав к торговому центру, мы убедились, что все намного хуже, чем мы думали, - рассказывает мэр Нью-Йорка в 2001 году Рудольф Джулиани. - Мы пытались дозвониться до начальника полиции, начальника пожарного департамента, даже до Белого дома. Но сотовая связь почти не работала".В 9:03 в южную башню Всемирного торгового центра врезался второй самолет. После этого первым лицам США стало понятно, что это нападение на страну. Президенту Бушу доложили о втором самолете.В этот момент новость о втором самолете получили журналисты президентского пула. Встреча со школьниками подошла к концуПервый звонок Буша – вице-президенту Дику Чейни. Они обсудили, с какими словами президент должен обратиться к нации. Оба понимали, что это террористический акт и они обязаны об этом сказать.В то время как президент завершал свое обращение к нации, в Центре управления ПВО возникла новая кризисная ситуация. Был замечен самолет в 10 километрах к востоку от Белого дома. При угрозе нападения на Вашингтон Белый дом должен быть немедленно эвакуирован. "Я работал за своим столом, когда в кабинет ворвался один из руководителей охраны. Он приказал следовать за ним без каких-либо объяснений. Потом одной рукой схватил меня за ремень, а другой за плечо и буквально вынес меня из кабинета сначала в коридор, а потом в туннель, ведущий в подземный оперативный центр", - вспоминает Дик Чейни.Оперативный центр находится в бункере. Он предназначен для управления страной в случае начала ядерной войны. Отсюда Чейни мог руководить организацией обороны страны и подготовкой ответного удара. Задача №1 – нейтрализация рейса 77 American Airlines, взявшего курс на Вашингтон.В 9:37 третий угнанный самолет врезался в здание Пентагона. В это время министр обороны Дональд Рамсфелд находился в своем рабочем кабинете. Выйдя на улицу, чтобы оценить ситуацию, он увидел пламя, дым и раненых и бросился помогать пострадавшим. Почти полчаса его не могли найти. Но затем он вернулся в свой кабинет, чтобы связаться с президентом и вице-президентомА теперь обращаемся к всежим американским источникам, коим является ранее мною упоминаемая согласительная комиссия по альтернативному (официальной точке зрения) расследованию этой трагедии. Ранее она находила свидетелей, которые утверждали,что черные ящики от врезавшихся самолетов в ВТЦ, были найдены: Новые доказательства отрицают,что не были найдены черные ящики самолетов.Пожарные, работающие в Граунд Зеро, утверждают,что были найдены три из четырех черных ящиков, так как они находятся в коробках, которые практически не поддаются разрушению. Эта информация была предоставлена согласительной комиссии из 24 членов по 9/11.Сейчас эта же комиссия утверждает,что слова Дика Чейни расходятся с показаниями свидетелей:Point MC-3: The Claim about the Time of Dick Cheney's Entry into the White House Bunker Поставим точку в MC-3: заявление относительно того времени, когда Дик Чейни находился в подземном бункере.The Official Account Официально:Vice President Dick Cheney took charge of the government's response to the 9/11 attacks after he entered the PEOC (the Presidential Emergency Operations Center), a.k.a. "the bunker". 9/11 Commission Report said1that Cheney did not enter the PEOC until almost 10:00 AM, which was at least 20 minutes after the violent event at the Pentagon that killed more than 100 people.Вице-президент США Дик Чейни взял на себя управление государством после того,как вошел в правительственный бункер и это произошло по его словам около 10:00 утра, через 20 минут после того, как в Пентагоне погибло более 100 человек.(1)The Best Evidence Лучшее доказательство:Secretary of Transportation Norman Mineta told the 9/11 Commission that, after he joined Cheney and others in the bunker at approximately 9:20 AM, he listened to an ongoing conversation between Cheney and a young man, which took place when "the airplane was coming into the Pentagon."2After the young man, having reported for the third time that the plane was coming closer, asked whether "the orders still stand," Cheney emphatically said they did.However, testimony that Cheney was in the PEOC by 9:20 was reported not only by Mineta but also by Richard Clarke3 and White House photographer David Bohrer.4 Cheney himself, speaking on "Meet the Press" five days after 9/11, reported that he had entered the PEOC before the Pentagon was damaged.5The 9/11 Commission's attempt to bury the exchange between Cheney and the young man confirms the importance of Mineta's report of this conversation.Министр транспорта Норман Минета сообщил комиссии 9/11,что он присоединился к Чейни и к остальным в бункере уже в 9:20 и услышал разговор между ним и молодым человеком, когда "самолет направлялся в сторону Пентагона".(2)Когда молодой человек в третий раз запросил Чейни, так как самолет приближается и "все ждут приказа", Чейни решительно ответил, что "он обдумывает".Норман Минета не единственный свидетель, кто подтверждает нахождение Чейни в бункере уже в 9:20. Помимо него об этом говорят Ричард Кларк (3) и фотограф Белого дома Дэвид Борер (4)Сам же Чейни утверждает,что он вошел в бункер после того,как был атакован Пентагон.(5)References for Point MC-31. 9/11 Commission Report (2004), note 213, p. 464.2. "911 Commission: Trans. Sec. Norman Mineta Testimony."3. Richard Clarke, Against all Enemies (New York: Free Press, 2004), pp. 2-5.4. See "9/11: Interviews by Peter Jennings," ABC News, September 11, 2002.5. "The Vice President Appears on Meet the Press with Tim Russert," MSNBC, September 16, 2001.Казалось бы- ну и что? Какое это имеет отношение к экономике? А самое прямое. Напомню,что во время 9/11 были объявлены банковские каникулы, после которых в течении недели рынок потерял более 1 триллиона капитализации:Эти атаки оказали значительное экономическое воздействие на американский и мировой рынки. ФРС временно сократил контакты с банками из-за нарушений коммуникационного оборудования в финансовом районе Нижнего Манхэттена. Обратная связь и контроль над денежной массой, включая мгновенную ликвидность банков, была восстановлена в течение нескольких часов. Нью-Йоркская фондовая биржа (NYSE), Американская фондовая биржа и NASDAQ не открылись 11 сентября и оставались закрытыми до 17 сентября. Объекты NYSE и её центры обработки данных не пострадали, но члены биржи, клиенты и другие биржи потеряли с ней связь из-за разрушений телефонного узла около ВТЦ. Когда 17 сентября биржи открылись, после самого долгого периода бездействия со времён Великой депрессии в 1929 году, Индекс Доу-Джонса («DJIA») потерял 684 пункта, или 7,1 %, до 8920, это было самым большим его падением в течение одного дня. К концу недели DJIA упал на 1369,7 пунктов (14,3 %), это было самым большим недельным падением в истории. Американские акции потеряли 1,2 триллиона долл. в течение недели.Стоит обратить внимание на слова Билла Гросса "The Good Times Are Over, The Time For Risk Taking Has Passed" о том, что :"институциональные инвесторы финансовой экономики такие как, фонды денежного рынка, страховые, пенсионные, банковские и даже потребительские балансы больше не могут обеспечить уровень доходности, необходимых для оправдания своих будущих обязательств и их стало невозможно достичь. Доход по депозитам слишкам мал,чтобы покрыть обязательства. В связи с чем доход по многим классам активов станет отрицательным. По мере снижения ливидности можно будет наблюдать, как ряды рискованных активов будут пополняться , напоминая всем известную игру с музыкальными стульями. И то, что 2015 год или ближайшие 12 месяцев- это время принятия рисков, можно судить по тому,что активов с положительным денежным потоком становится все меньше".Далее мы с вами наблюдаем любопытные вещи, происходящие в крупнейших финансовых учреждениях США.Зерохедж. Is Citi The Next AIG? Citi - это новый AIG? Напомню, что в Сити работает Саммерс. Тот самый, который организовал в свое время провалившийся фонд Гарварда в России, планировавшийся для того,чтобы организовать то,что сейчас происходит на Украине. Стоит вспомнить о том,что война довольно затратное, а зачастую убыточное мероприятие. И не исключено,что пополнение баланса деривативами как-то связано с тем,что происходит на Украине- Украина банкрот, но , например, Обама подписал закон о поддержке Укрианы на 400 миллионов, к тому же он(Обама) довольно плотно работал с Саммерсом и только общественность заставила отклонить его кандидатуру на пост председателя ФРС, удовольствовашись кандидатурой Фишера на "вторых ролях", хотя Фишер от этого не испытывает никаких страданий.Мы обнаружили,что Citigroup, ранее пролоббировавшая деривативы за счет FDIC, увеличили деривативы на своем балансе в третьем квартале до $70.2 трлн, опередив в этом даже JPM!Ну раз завели дело о JPM, то давайте поговорим о нем. Этот мегабанк уже довольно давно испытывает давление от регуляторов в том плане, что у них Джейми Даймон одновременно является и генеральным директором и председателем совета директоров. Но, как нам сообщает Зерохедж, основная опасность исходит от конкурента гиганта- Голдман Сакс, чьи люди как раз и работают в регуляторе. Кого заинтересовало, могут подробнее прочитать в оригинале:Зерохедж Goldman's Modest Proposal: It May Be Time To Break Up JPMorgan Скромное предложение от Голдмана: может, пришло время разбить JPMorganЕще в 2008 году, после падения фондовых рынков, Голдман избавился от двух своих конкурентов: от Bear и Lehman, когда ФРС отказалась спасать эти банки. Теперь, волне возможно, пришла очередь и для JPM.Голдман: недавно было озвучено ФРС,что капитал JPM необходимо поднять до 11,5%,что на 100%-200% выше, чем у всех остальных, то, может быть имеет смысл говорить о целесообразности разделения акционерного капитала, учитывая,что он сейчас является отрицательным. Распад может создать стоимость ниже на 20% и его можно разделить на: (1) трастовый банк, инвестиционный банк и бизнес по управлению активами и (2) все остальное (то есть более традиционный банковский бизнес). Разделение банка будет способствовать росту акционерного капитала.Вы мне скажете: а при чем тут Дик Чейни? Прямое отношение, конечно, он уже не имеет, просто надо иметь в виду,что США действуют всегда шаблонно, поэтому, например, не исключен вот какой вариант:прогнозирует Байрон Уин из Blackstone Group LP:По словам Уина, в этом году по настоящему проявят себя киберпреступники, которые становятся более ловкими, чем полиция.«Хакеры захватят частные и корпоративные счета одного крупнейшего банка, а Федеральная резервная система закроет это учреждение на пять дней для проверки его счетов»А хакеры- ,понятно, кто- Федеральное бюро расследований США расследует кражу данных из американского банка JP Morgan Chase. Она произошла в середине августа, сообщило агентство Bloomberg со ссылкой на двух сотрудников, имеющих отношение к следствию. По данным агентства, под подозрение попали российские хакеры. Они украли петабайты закрытой информации настолько умело, что эксперты подозревают — хакеры действуют при поддержке российских властей. ФБР расследует, является ли взлом JP Morgan местью российских властей за санкции США из-за конфликта вокруг Украины.или :Блумберг:"элитные российские хакеры взломали биржу Nasdaq и заложили туда цифровую бомбу".Я , надеюсь, что понятно. В условиях, когда ставки находятся на нуле и практически все активы показывают отрицательное значение, то есть идут убытки по причине невозможности капитал воспроизводить, происходит органический рост - за счет поглощения конкурентов. В США давно поглощены мелкие банки, настала очередь крупного финансового капитала выяснять, кто будет сидеть на стуле. В свою очередь, Россия только вступила в данный этап , когда крупные банки выживают за счет разорения мелких, в чем немало способствует ЦБ РФ. Во всяком случае, мы наблюдаем назревание явно революционной ситуации:"верхи не могут, низы не хотят". Вернее: верхи разбираются, для кого стул лишний, а когда разберутся, то назначат мальчика для битья, коим,скорее всего, будет российская элита,этакий хакерский Бен Ладен. Хотя проблемы финансового капитала США должны решаться несколько иными решениями, но американская элита иначе не может- виноват в их проблемах всегда кто-то другой, вот они и решают их, как могут- за чужой счет. И если это кто-то другой согласен его оплачивать- то тем более.
Джейми Даймон благодарит Конгресс
Глава банка JP Morgan Джейми Даймон благодарит конгресс за принятие бюджета. "Этим утром я собираюсь отправить Полу Райану и Патти Мюррей сообщение по электронной почте со словами "Спасибо вам, спасибо вам, спасибо вам, и пусть Господь благословит вас", – заявил Даймон в среду, обращаясь к республиканским конгрессменам и сенаторам из Демократической партии, которым удалось прийти к бюджетному соглашению. По его мнению, бюджетное соглашение - это "большой прорыв", так как повторной временной приостановки работы правительства не произойдет. Напомним, что Конгресс США, не дожидаясь крайнего срока, принял бюджет и предотвратил еще одну временную приостановку работы американского правительства. После продолжительных дебатов демократы и республиканцы все же достигли договоренности и приняли бюджет на 2014 финансовый год. Соглашение предусматривает сокращение госрасходов в течение двух лет на $63 млрд. Причем большая часть секвестра придется на текущий 2014 финансовый год, который в Америке начинается 1 октября.