Why Democrats must embrace Occupy Wall Street

by: cliffweathers

Sat Oct 01, 2011 at 21:51:19 PM EDT

Occupy Wall Street recognizes the lack of legal repercussions over the global financial crisis and seeks to draw public attention to this. It was inspired by the Arab Spring movement, particularly the protests in Cairo's Tahrir Square which resulted in the 2011 Egyptian Revolution.

The aim of the demonstration is to begin a sustained occupation of Wall Street and to draw attention to the misdeeds of the banking industry and to call for structural economic reforms. Organizers intend for the occupation to last "as long as it takes to meet our demands."  

On Bilking The Sophisticated, Or, Check It Out: We're Suing Banks!

by: fake consultant

Tue Sep 06, 2011 at 17:59:45 PM EDT

You remember that little bit of a banking crisis we had a couple of years back, where banks around the world might have possibly, maybe, just a little, conspired in a giant scheme to package toxic mortgage loans into Grade A, investment-ready securities instruments, which then blew up in everyone's faces to the tune of a whole lot of taxpayer bailouts?

Well all of a sudden, it looks like an agency of the Federal Government is looking to do something about it, in a real big way.

Last Friday the Federal Housing Finance Agency (FHFA) announced they're suing 17 firms (I'll give you a list, bit it's pretty much all the usual suspects); depending on who you ask the Feds are seeking an amount as high as $200 billion.

As Joe Biden would say, it's a big...well, it's a big deal, anyway, and that's why we're starting the new week with this one.

NY-19: Hedge Fund Kings Love Nan Hayworth

by: Florida Greenwood

Sun Sep 19, 2010 at 09:30:38 AM EDT

Wall Streeters Shapiro and Parkhurst have worked for both large investment banks and for so-called salon firms, tiny entities which can hold billions in assets. Shapiro headed Intrepid Capital Investments, which managed to lose nearly 90 percent of investment capital between 2007 and 2009. Parkhurst, a former managing director at Smith Barney, moved on to Archeus Captial Management, which shut down when its hedge funds went from $3 billion to $700 million in assets in three years. After helping to form Centerlight Capital Management in the dust of Archeus, Parkhurst has gone on to be a trader at the British Investment Bank Barclays.

Despite investors losing their shirts on Archeus and Intrepid investments, times must not be too bad for Shapiro and Parkhust, neither of whom are residents of New York State or the 19th Congressional District. Prior to last night's high-price soiree at Shapiro's mansion (just check out this Google maps image), both have donated $2,400 to Hayworth's campaign.

Hayworth is a multi-millionaire herself. Her husband runs the mammoth Mount Kisco Medical Group, which is comprised of more than 200 physicians. In its early stages, the campaign has largely been self funded with Hayworth giving several six-figure checks to her own campaign.  

On FinReg: What Our NY Reps Were Up To Behind The Scenes

by: phillip anderson

Wed Jun 30, 2010 at 07:11:00 AM EDT

How N.Y. Dems united on Wall St. bill

The New York delegation's role in changing the Wall Street reform bill to alter the provision regulating derivatives was a rare political moment - much of the heavily Democratic group was actually on the same page.

And it came despite initial resistance from a liberal faction within the delegation that was caught between its desire to regulate an industry guilty of some poor practices that led to an economic downfall and its fear of sinking an important reform bill.

According to several people familiar with the negotiations, several members played key behind-the-scenes roles - such as Rep. Nita Lowey, one of the longest-serving members in the state and one with a strong relationship to House Speaker Nancy Pelosi.

And there was a small group that didn't support the push to get rid of Arkansas Democratic Sen. Blanche Lincoln's provision. Among the most vocal in the group was Manhattan Rep. Jerrold Nadler, according to several legislative sources and delegation members.

"We don't weigh in as New Yorkers very often," agreed Rep. Gary Ackerman, who, along with Reps. Mike McMahon and Scott Murphy, is getting praised for lobbying outside of the conference committee that worked on the bill.

Go read the whole thing.

On Slicing Pies, Or, Mystery Fees Cause Retirement "Money Spill"

by: fake consultant

Fri Jun 18, 2010 at 22:18:40 PM EDT

This time we won't be talking about energy security or "climate security"; instead, we'll discuss retirement security, keeping your money for yourself instead of paying it out in "mystery fees", and how one of the "usual suspects" is at it again.

And if all that wasn't enough...we also have pie.

Governor cheers on Wall Street

by: simonstl

Wed Dec 09, 2009 at 15:08:38 PM EST

The Governor's latest tweet reinforces a story Liz Benjamin had posted earlier today:

Iowa, corn. Michigan, autos. Texas, oil. NY, Wall Street...We must stand behind the engine of our state's economy & strengthen it.

In his speech, the Governor pointed to Wall Street's impact on state finances:

In 2007 Wall Street finances provided 22 percent of the revenues in New York, more than one out of every five dollars in wages comes from Wall Street

Before going on to make the more questionable claim that "Wall Street capital is what is able to allow for what is on Main Street - small businesses creating jobs." Don't get me wrong - there have been times in our history when Wall Street was front and center in making our railroads work and building our industry, in ways that benefited small business. It's just, well, kind of been a while since the benefits were clear to folks outside of Wall Street. (Though perhaps Paterson has a case for small businesses in New York that sell directly to these folks.)

It seems lost on the Governor that his predecessor, his sins aside, became Governor of New York precisely because he was willing to challenge Wall Street, not cheer them on. Spitzer argued that the "engine of our state's economy" should be well-tuned, operating within legal limits, and made his case despite that industry having a lot of friends inside and outside of the state.

I didn't have a lot of hope remaining for Paterson, but did he really need to sell out this severely? Is he that short of campaign donations?

New York after Wall Street

by: simonstl

Sat Mar 28, 2009 at 09:17:26 AM EDT

Whether or not the economy falls off another cliff, New York has a problem. The social contract for our country is tearing, in ways that seem likely to spell doom for the class of financial engineers who've raked in as much as they can while telling us all there was little risk involved.

The charts that worry me most isn't about the economy's present, but rather about the past of one sector. They come from a broader article on how all this money started gushing out of Wall Street:

Note in particular the key date where those lines turn upward: 1980.

Remember Times Square in the 1970s? Or at least Taxi Driver? Those were some bleak days for New York City, which had lost key pieces of its formerly diversified base as a port and manufacturing center. Manhattan used to have amazingly interlinked collection of small factories, which had disappeared during the postwar era. The Port of New York used to dominate the country from its key location, first on the Erie Canal and then on the railroads. As that went away (and wasn't replaced), the city had some large problems, including its own need for a bailout.

New York did still have a few big things, though: fashion, media, and finance. All of them added to the city's mystique and drew Richard Florida's beloved "creative class" in droves. I don't think, though, that the creative class was what revived New York. Fashion continues, but seems pretty stable. Media continues, though some of its most classically New York-oriented aspects, especially publishing, are in steady decline. Advertising may even be in danger.

What made New York's revival possible, I'd argue, is the gusher of cash that came in from Wall Street. True, not all of that money went to New York - a lot went to Charlotte, San Francisco, and banking capitals all over the county. Even locally, a lot of it went to Connecticut and New Jersey. Even after that, though, finance was pumping money into New York - real estate, charitable donations, conspicuous consumption of every variety. Some of that even still flows in ways that startle those of us who aren't used to it, but the echoes of the past seem even crazier. ("$10,000 to $15,000 to spend on a Saturday afternoon"? Really?)

Most of us weren't out there spending thousands of dollars before nightfall, but that kind of absurdity brought a lot of life back to New York, making Manhattan buzz in ways in hadn't since about, oh, the 1920s...

And even if we weren't in New York City, we all benefited from the taxes - low though they were - on this nonsense. These Masters of the Universe never really were, but for a while they let us pretend that maybe we were more in control of our own universe.

The culture of Wall Street hubris has to crash, for the good of the country. I don't think the people on the inside of it have begun to realize the damage they've done, both to the national and international economies and to their fellow citizens' tolerance of their high-roller ways.

But as that comes down, what are we in New York, both City and State, going to do to fill those economic gaps? What can we do that's more sustainable, less parasitic, and able to survive in this newly challenging environment?

I don't imagine that we'll find a new sector that can skyrocket the way that finance did over the past twenty years. The accumulated wealth from that crazy period will buffer things for a while. Somehow, as we (and Wall Street) come to adjust to that brave new world, though, we're going to have to figure how to keep ourselves going on a whole lot less.

Who can you trust with your money?

by: simonstl

Mon Feb 09, 2009 at 22:29:22 PM EST

Watching this bizarre bit on CNBC where the hosts are seeking investment advice from folks telling them that the finance markets are just plain broken, reminded me of a bit of conversation from dinner tonight:

Remember how they told us that poor people couldn't be trusted with money?

- They said that a lot.

Somehow it turns out that rich people can't be trusted with money.

- Hard to imagine.

Somehow they thought that if you made a big enough initial investment, the money would just keep pouring in.

There's a joke about trickle down somewhere in there, but we didn't manage to make it. I'm not sure this is the "contradictions of capitalism" that Marx thought would take down the system - it turns out that enthusiastic capitalists can create enough of a problem for all of us.

America, It's Time To Say Goodbye To Wall Street: An Interview With Author David Korten

by: Intrepid Liberal Journal

Mon Feb 02, 2009 at 21:07:45 PM EST

The topic below was originally posted on my blog, the Intrepid Liberal Journal..

"We face a monumental economic challenge that goes far beyond anything being discussed in the U.S. Congress or the corporate press. The hardships imposed by temporarily frozen credit markets pale in comparison to what lies ahead.

Even the significant funds that the Obama administration is committed to spending on economic stimulus will do nothing to address the deeper structural causes of our threefold financial, social, and environmental crisis. On the positive side, the financial crisis has put to rest the myths that our economic institutions are sound and that markets work best when deregulated. This creates an opportune moment to open a national conversation about what we can and must do to create an economic system that can for work for all people for all time."

When Al D'Amato defends you

by: simonstl

Sun Dec 14, 2008 at 21:11:27 PM EST

Representing New York State means representing Wall Street, to some extent. Okay, some days it seems like Senators from Connecticut have as many Wall Street folks voting in their district, but New York City has spent most of the nation's history as the dominant financial center.

An article on page A1 of today's New York Times asks some hard questions about what representing Wall Street means, and specifically what it's meant for Chuck Schumer. The entire article is worth reading, but if you want to cut to the chase, the table lists Schumer's stands on prominent Wall Street-related legislation.

I'm not surprised to see that I oppose pretty much everything Schumer's done in this field, but given that I have little trust for Wall Street's sense of a fair playing field, that's not too surprising. (Except maybe surprising that I oppose the ban on short-selling, which is a complicated story.)

I should also point out that Schumer isn't completely aligned with banks. He does, for instance, support fixing the 2005 bankruptcy bill with something less disastrous for consumers.

The question for me, though, isn't whether Schumer should represent Wall Street. He should, actually - it's a critical component of this state's economy. The question is whether Schumer trapped himself in the same kind of "it can only go up, so long as we deregulate it" mentality that his donors shared - and whether, in fact, he helped his donors march straight off a cliff.

It's fun to berate Chris Cox, the hapless Republican running the SEC these days, for his stances against regulation. At the same time, though, it turns out that Schumer's berated Cox and battled with him repeatedly - because Schumer wanted less regulation than even Cox thought was wise:

"They've implemented their codes of conduct," Mr. Schumer told Mr. Cox at a Senate hearing. "They're making good-faith efforts."

In some ways, Schumer's focus on keeping New York the #1 financial center reminds me of our Empire Zone program - both are laudable, but both lead to tangles that make everyone involved look bad, and the path forward even less clear.

I hope I'll feel a lot better when the Senate starts up again and we see some action on these matters, instead of quotes like:

He has not assigned responsibility to himself or fellow Democrats, saying he had no way of knowing of the misdeeds going on on Wall Street. "I wish I was omniscient," he said. "I'm not."

And (former) Senator Pothole?

"Don't take someone to task simply because a group has supported him politically and now he supports legislation that helps them," Mr. D'Amato said. "The question is, is the legislation good or bad? With Chuck, it is clear he tries to do what is best for the state and city as a whole."

I'm sure Al tried to do what is best too...

The Buffalo News On Schumer's Wall Street Ties

by: robert.harding

Mon Sep 22, 2008 at 11:11:45 AM EDT

Today, The Buffalo News discusses Schumer's Wall Street ties and supposed connections to deregulation attempts of the industry.

Schumer walks a political tightrope during Wall Street's meltdown

Sen. Charles E. Schumer prides himself on being the senator from Main Street, visiting every upstate county every year, trumpeting every federal grant and diving deep into local issues such as a proposed new Peace Bridge.

But all the while, he also has been the senator from Wall Street, supporting major efforts to deregulate the financial sector while raising millions from securities industry sources not only for his own campaign fund, but for Democratic Senate prospects nationwide.

It's a balancing act that saw Schumer adding community-building provisions to a massive deregulation bill and sounding an early warning about predatory mortgage lending while pushing more deregulation to preserve New York's status as the world's financial capital.

But now, as the American financial system last week faced its gravest crisis since the Great Depression, Schumer faced it, too - along with some criticism that he, along with his congressional colleagues, did not do enough to prevent it.

...

Schumer introduced the first bill to curb predatory mortgage practices a year and a half ago, but by then, home prices were grossly inflated and due for a crash, and another problem lurked behind the scenes.

Through unregulated derivatives called "credit default swaps," American International Group, the insurance giant, insured tens of billions of dollars in mortgage bonds against default. But when those loans went bad, so did AIG - and the government had to rush in with a bailout.

Roper blamed it on this law that Congress passed in 2000 for leaving those credit default swaps and other derivatives without strong regulatory oversight.

"We interconnected the financial services industry in such a way and to a degree that a single player [AIG] has the power the take out the global economy," she said. "How do you let that happen?"

Schumer, on the contrary, blames the Bush administration.

"The [Securities and Exchange Commission] should have done the job," he said. "They had the power to regulate. They didn't."

Obviously, Schumer being from New York is the reason why this article was written. I don't believe he is the sole reason for this. I'm with Schumer on this one. I believe that the Bush Administration and this Republican deregulation mentality is what helped Wall Street crumble.

By the way, there is a great about the subprime mortgage crisis and avoiding the "next financial crisis." The book is Financial Shock: A 360º Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis. It's worth a read. It doesn't cover everything here, but it explains an important part of this crisis.

How the Other Half (of 1%) Lives

by: phillip anderson

Tue Nov 20, 2007 at 09:30:46 AM EST

Wall St. handing out record bonuses despite layoffs, stock market woes

Wall Street firms plan to hand out a record $38 billion in bonuses to cap a year in which many firms wrote off billions in losses, laid off scores of workers and saw stock prices plummet.

The bonuses, split among about 186,000 workers at Goldman Sachs, Merrill Lynch, Morgan Stanley, Lehman Brothers and Bear Stearns, come to an average of $201,500, Bloomberg News reported.

The average is misleading because Wall Street's most prominent execs and biggest revenue-producing stars will pull in bonuses of $10 million or more apiece, while many will get less than six figures.

"It shows that it is possible for the firms to lose a lot of money and the stocks to be down - and people on Wall Street make a lot of money," said compensation consultant Alan Johnson. "It's counterintuitive."

...

Yet the bonanza can't please stockholders, who have suffered through the worst year in the securities industry since 2002 and have seen share prices lose $74billion.

Heads I win. Tails you lose.

Happy Thanksgiving, indeed.

Three dark clouds in today's Times

by: simonstl

Mon Oct 22, 2007 at 12:14:01 PM EDT

The New York Times metro section has three stories that (for once) promise to affect the entire state. They're not upbeat stories, though:

• The level of the Great Lakes is falling. I'd seen earlier reports of problems on Huron and Superior, but less water there means less water here eventually. They focus on the impact on cargo shipping, but those lakes have a dramatic effect on weather conditions and water levels across the state.

• It looks like Albany won't be seeing pleasant surprises in tax revenue, as Wall Street bonuses look like they're going away. That could have a direct effect on New York City, but the financial reverberations would affect the whole state.

• This one's a little older, but I just noticed it on the site: a map of subprime lending in New York (including upstate), New Jersey, and Connecticut. New Yorkers may be facing some problems, concentrated (in the zoomed-in version) in our cities.

These don't sound like pleasant changes to come. Hopefully some of them will just blow by, but we'll probably see some problems along the way.