Is the "vampire squid" (or octopus) analogy that far off? Throughout the financial reform debate, the finance industry has waged an unprecedented assault on the democratic process, spending an estimated $1.4 million per day to influence Congress and hiring 70 members of Congress and 940 former federal employees to lobby on their behalf. The six biggest banks—Goldman Sachs, Bank of America, JPMorgan Chase, Citigroup, Morgan Stanley, and Wells Fargo—account for a disproportionate share of this activity. In the two years since the first federal bailout of a big bank (Bear Stearns), these banks and their principal trade associations have hired over 240 former government insiders as lobbyists and spent hundreds of millions of dollars on an influence game designed to thwart reform, shape bailout programs and maintain their status as “too-big-to-fail” institutions.... The lobbying spree is taxpayer-funded—it follows $160 billion in bailouts from Congress and trillions in cheap loans from the Federal Reserve. And as their influence has come to be viewed as increasingly toxic in Washington, the banks have shifted segments of their political activity to a “shadow lobby” that includes such front groups as the U.S. Chamber of Commerce. http://www.ourfuture.org/bigbanktakeover
This is true, but it looks like the Street's massive lobbying campaign is going to get them jack shit.
Really? The tungsten story has definitely made the rounds. I'm not a gold bug, but I was definitely aware of it.
Arrrgh, its not taxpayer funded! Every industry lobbies - what do people expect? I'm completely in favor of passing laws/amendments to limit lobbying and campaign donations. 100%. But what did anyone expect the banks to do, say "you know better", especially after the Levin circus show?
No doubt Congress showed how stupid they were with some of their clueless questions. But I disagree that GS is being blamed now for past wrongs. The pity party for GS can only go so far. As I mentioned a few pages back, Blankfein himself said GS was partly responsible for this backlash not just for their practices during the bubble but also for sitting idly by and not explaining what they did as a firm and how they're not the same as your corner brokerage firm. They thought their sh*t doesn't stink ("we're doing God's work" even if it was a joke was still inappropriate). Whose fault is that?
This is the reason why I think tomwilhem is a rube - he conflated "appearance" with "reality". If Goldman didn't really do anything wrong but has failed to do sufficient PR to convince people of that, it doesn't mean they did anything substantitvely wrong. GS' public relations have been bad, yes. But that's not what this is about. There's a criminal investigation now of GS for the Abacus deal (which, imo, is absolutely nonsense) - that's not a proper response to bad PR!
The only thing I can say is that Congress loves its dog & pony shows and GS is in their cross-hairs at the moment. I'm pretty sure most of this will blow over assuming the economy heads north and GS shows the proper amount of deference to the govt. BTW - the BP oil spill was probably the best news GS got in months.
We'll see, but the new bill isn't looking like its any sort of boon to the industry. Which is good in some ways and bad in others.
I thought it was pretty good. His overall conclusion mostly remains the same from Liar's Poker, but it did teach me a few things about the industry.
Interesting NY Magazine article on how love affair between Obama & Wall St. is apparently over. What really got these babies mad was Obama's criticism of Wall Street's comp. & bonus structure, even after the govt. lifeline. You'd think they'd be more grateful for the bailout, but no: Another, not inconsistent, theory is that the money changers aren’t merely forgetful but mildly deluded. “They’ve created a narrative where irrational actions by a few people plus the nature of government intervention forced them to do things inconsistent with their free-market philosophy and regular way of handling their business,” offers a Democratic financier. “So, yes, they took the TARP money, but only because they had to. None of them are sitting there saying to themselves, ‘You know, I was responsible for this crisis. Therefore, I’m really grateful to the government that it stepped in.’ This is not the narrative they have in their heads.” But one of the city’s most successful hedge-fund hotshots offers a different surmise: “The majority of Wall Street thinks, ‘Hey, you lent us money. We did a trade. We paid you back. When you had me down, you could have crushed me, you could have done whatever you wanted. You didn’t do it! So stop your bitching and stop telling me I owe you, because I already paid you everything! The fact that I’m making money now is because I’m smarter than you!’ I think that’s where you’ve got this massive disconnect. In simple human terms, the government is saying, ‘I saved your life, and all you did was thank me once. You should be calling me every day: Thank you. Thank you.’ The guy who saved the life expects more. And the guy whose life is saved says, ‘I already thanked you!’ ” http://nymag.com/news/politics/66188/
"You and Durocher are on a raft. A wave comes and knocks him into the ocean. You dive in and save him. A shark comes and takes your leg. In Leo's world, next day you and Leo start out even." - Dick Young (may not be precise quote)
The sense of entitlement is amazing. Like they had nothing to do with the crash and it's now BAU. I mean, many ppl think Obama & Geithner went easy on Wall Street. Next time the economy crashes see what kind of lifeline they're thrown.
Frankly, the fact that Wall Street is pissed at Obama shows that he's doing a decent job with the reforms. I support most of them and don't like some others, but this is a pretty good go at it. I'm also not sure this arrogance is unique to the financial sector. I think any industry that has been bailed out will go right back to lobbying against reforms that might hinder it. Its not a pathological blindness, its just common sense. Once the world got back to normal, so did the banks. Did people really expect Goldman's managers, who had a fiduciary duty to their shareholders, to say "take all our profits"? Really?
By "fiduciary duty" you mean not awarding themselves excessive bonuses each year? I'm sure some shareholders have a problem with that, even in a "normal" economy.
Times are changing, but we're still not quite in a world where stockholders regularly get to vote on, let alone vote against executive pay...
Goldman has always functioned by brazenly stating that they work the hardest, hire the smartest and pay the most. If you, as a Goldman shareholder, are unhappy that they've awarded higher bonuses than the rest of the industry, you're making an odd argument.