One obvious question when Connecticut Senator Chris Dodd announced his retirement last week was what impact it would have on the effort to reform Wall Street. Dodd is chairman of the Senate Banking Committee, and the bill he wrote last year is the most ambitious regulatory initiative pending in Congress.
On the first day of the Financial Crisis Inquiry Commission, Phil Angelides demonstrated a gift for powerful and memorable metaphor: accusing Goldman Sachs of essentially selling defective cars and then taking out insurance on the buyers. Lloyd Blankfein and the other CEOs looked mildly uncomfortable, and this image reinforces the case for a tax on big banks--details to be provided by the president later today. But the question is: How to keep up the pressure and move the debate forward? If we stop with a few verbal slaps on the wrist and a relatively minor new levy, then we have achieved basi
The Obama administration tipped its hand today--they are planning a new tax of some form on the banking sector. But the details are deliberately left vague--perhaps “not completely decided” would be a better description. The NYT’s Room for Debate is running some reactions and suggestions. The administration is finally getting a small part of its act together--unfortunately too late to make a difference for the current round of bonuses. We know there is a G20 process underway looking at ways to measure “excess bank profits” and, with American leadership, this could lead towards a more reasonab
The big banks are pre-testing their main messages for bonus season, which starts in earnest next week. Their payouts relative to profits will be “record lows,” their people won’t make as much as in 2007 (except for Goldman), and they will pay a higher proportion of the bonus in stock than usual. Behind the scenes, leading executives are still arguing out the details of the optics. As they justify their pay packages, the bankers open up a broader relevant question: How much bonus do they deserve in this situation? After all, bonus time is when you decide who made what kind of relative contrib
Sources say that Goldman Sachs’s bonuses will be announced on Monday, January 18, and actually paid sometime between February 4 and February 7. In previous years, the bonuses were paid in early January--but the financial year shifted when Goldman became a bank holding company. For critics of the company and its fellow travelers, the timing could not be better. Anxiety levels about the financial sector are on the increase, even on Capitol Hill. The tension between high profits in banking and stress in the rest of the economy becomes increasingly a topic of discussion across the nation. And you
My friend and former colleague Reihan Salam has a mostly thoughtful post about my recent piece on conservative crticism of Obama and the economy. He makes several good points, which speak for themselves, but I thought this one merited a response: Noam Scheiber of The New Republic writes: Becker, Davis, and Murphy are political conservatives, and they badly want you to believe government intervention is counterproductive. My understanding is that while Becker, Davis, and Murphy have a libertarian bent, they are not partisan Republicans.
My favorite moment from last month’s White House jobs summit came when the president asked if Washington had been doing something to discourage hiring. At this point, a man named Fred Lampropoulos, the CEO of a Utah-based medical device manufacturer, chimed in that yes, in fact, it had. “[T]here’s such an aggressive legislative agenda that businesspeople don’t really know what they ought to do,” Mr. Lampropoulos told the president, according to The New York Times. Political uncertainty, he said, “is really what’s holding back the jobs.” Well, okay.
Investors are looking for vehicles to put their money. OK, I've got at least one. Yes, invest in tuna. Are there tuna futures like there are pork belly futures? I don't know. Here's the New York Times headline over an Associated Press story: "Giant Tuna Fetches $177,000 at Japanese Auction." This means that the price of sushi is going up, up, up. The fish weighed 513 pounds (233 kilograms).
Granted, too-big-to-fail is an issue that has populist resonance on both right and left. Still, given McCain's trajectory over the last few years, this isn't necessarily a fight I'd have expected him to pick. Good to see him involved. Politico's Victoria McGrane has the story: The anger at the nation’s financial behemoths is taking shape in a variety of ways, most notably in a bill from Sens.
Key business sector gauge at highest level since 2006. Brad DeLong: Obama economic team has exceeded expectations. Lending in Europe contracts again. Leonhardt is optimistic on the effects of healthcare rationing. Dissecting the Fed's plan to offer CDs to banks.