The Week: Most Recent U.S. Economy:Wall Street recent posts.en-usTue, 05 Feb 2013 07:00:00 -0500http://theweek.com Recent U.S. Economy:Wall Street from THE WEEKTue, 05 Feb 2013 07:00:00 -0500Why does Wall Street hate Obama?<img src="" /></P><p>Hey, Wall Street, where's the love for Barack Obama? His presidency has been good for you. Very good.&nbsp;Let me count the ways:</p><p>* Since bottoming out in March 2009, the stock market, as measured by the S&amp;P 500, has gained 125 percent. Investors have more than doubled their money in less than four years. It's the biggest gain under any president since World War II.</p><p>* Since 2009, corporate profits &mdash; even when taxes are factored in &mdash; have surged 171 percent, to their highest levels since World War II.</p><p>* Companies are now more profitable, relative to the size of the economy, than...</p> <a href="">More</a>By <a href="/author/paul-brandus" ><span class="byline">Paul Brandus</span></a>Tue, 05 Feb 2013 07:00:00 -0500Breaking up the big banks<img src="" /></P><p>Too-big-to-fail banks have failed us, said Gretchen Morgenson in <em>The New York Times</em>, and now a "long-standing truth-teller" on their excesses is suggesting they be "chopped into pieces." Richard Fisher, president of the Federal Reserve Bank of Dallas, argued last week that despite the Dodd-Frank Act, the nation's megabanks still have taxpayers on the hook for future bailouts, and are also gumming up the Fed's recovery efforts by sitting on funds instead of lending them out. The 12 largest of the nation's 5,600 commercial banks hold 69 percent of assets, Fisher points out, but they make little of...</p> <a href="">More</a>By The Week StaffFri, 25 Jan 2013 07:41:00 -0500Is the culture of Wall Street bonuses changing for good?<img src="" /></P><p><br /></p><p>Once upon a time, Wall Street investment bankers and traders spent all year looking forward to December and January; for most of them, these were the months when they learned the details of their bonus payments, which in some cases accounted for 90 percent of their total compensation for the year. The rest of the New York City economy also waited with bated breath, as Wall Streeters used their annual windfalls to put down payments on new homes, buy the latest cars and generally spend lavishly.</p><p>Even in the tough times that followed the financial crisis, a lot of those on Wall Street eyed the...</p> <a href="">More</a>By Suzanne McGeeTue, 22 Jan 2013 15:15:00 -0500Wall Street: The anatomy of the 'best cover letter ever'<img src="" /></P><p>It's every wannabe intern's dilemma: How to write a cover letter that impresses employers who need you a lot less than you need them. Here's a bit of a "shocker," says Maseena Ziegler at <em>Forbes</em>:&nbsp;On Wall Street, being absurdly, aggressively humble can be just the way to get the attention of hard-nosed financial executives. At least, it certainly appears to have done the trick for one "brutally honest and hilariously self-deprecating" college student who applied for a low-paying and, if necessary, demeaning job at a boutique investment bank. Here's the part that made the recipient promptly forward...</p> <a href="">More</a>By <a href="/author/harold-maass" ><span class="byline">Harold Maass</span></a>Wed, 16 Jan 2013 14:15:00 -0500AIG, greed, and legislative stupidity<img src="" /></P><p>On Tuesday, Washington was abuzz with murmurs that AIG &mdash; the catastrophically managed insurer of untold amounts of Wall Street mortgage debt that required a $182 billion bailout in 2008 &mdash; may join a $25 billion lawsuit against the United States government (i.e., the taxpayer) over the terms of that bailout. Outrage &mdash; manufactured and genuine &mdash; ensued.</p><p>The Tea Party crowd will undoubtedly go insane if the AIG board does in fact join Hank Greenberg and Co.'s lawsuit against the government. But a group of congressional Democrats &mdash; including Wall Street's least favorite...</p> <a href="">More</a>By <a href="/author/jeb-golinkin" ><span class="byline">Jeb Golinkin</span></a>Wed, 09 Jan 2013 10:20:00 -0500The sale of the NYSE and the death of stocks<img src="" /></P><p>To the general public, it's quite a "shocker," says David Weidner at <em>MarketWatch</em>. IntercontinentalExchange (ICE), an upstart derivatives exchange,&nbsp;<em>based in Atlanta</em>, is buying NYSE Euronext, the company that owns the iconic, 220-year-old New York Stock Exchange, in a deal worth more than $8 billion. To long-time market professionals, however, this merger merely confirms something they've known for quite some time. They've been witnessing the slow death of stocks &mdash; as the lord of the marketplace &mdash; for years, as new regulations and decimalization of trades once done using rounder...</p> <a href="">More</a>By <a href="/author/harold-maass" ><span class="byline">Harold Maass</span></a>Thu, 20 Dec 2012 13:45:00 -0500Was the AIG bailout a success?<img src="" /></P><p class="p1">The Treasury announced&nbsp;on Tuesday that it had <strong>sold its last remaining shares in insurance giant American International Group</strong>, restoring the company to full private ownership. Furthermore, the Treasury made a healthy $7.6 billion profit on the sale, bringing the total net gain from the government's "investment" in the troubled company to $22.7 billion. &nbsp;</p><p class="p1">Few saw this day coming. During the financial crisis of 2008, <strong>AIG was the poster-child for everything wrong with Wall Street</strong>. The company was saturated with derivatives tied to mortgages, the equivalent of gambling the entire house on...</p> <a href="">More</a>By <a href="/author/ryu-spaeth" ><span class="byline">Ryu Spaeth</span></a>Tue, 11 Dec 2012 10:10:00 -0500Citigroup sheds 11,000 jobs: What's next for the mega-bank?<img src="" /></P><p class="p1">Citigroup on Wednesday announced that it would cut 11,000 jobs, the first step taken by newly minted CEO Michael Corbatt to turn the struggling mega-bank around. As far as turnarounds go, <strong>it's a ruthless but fairly conventional move</strong>, chucking bodies overboard to reduce costs and streamline operations. But analysts say layoffs alone won't solve Citigroup's problems. The company remains hobbled by the financial crisis, and still presides over a "bad bank" chockfull of toxic assets. The bank's share price is down by about 25 percent since 2010, and its revenue growth is stagnant.&nbsp;</p><p class="p1">When Corbatt...</p> <a href="">More</a>By <a href="/author/ryu-spaeth" ><span class="byline">Ryu Spaeth</span></a>Wed, 05 Dec 2012 17:45:00 -0500Wall Street's bad election bet<img src="" /></P><p>Wall Street's heavy gamble on Mitt Romney turned out to be a disaster, said Steven Syre in <em>The Boston Globe</em>. Feeling personally stung by President Obama's "fat cat" attacks and aggrieved over what they consider burdensome reforms, bankers who supported Obama in 2008 turned their backs on him in droves this year, sending a torrent of cash Romney's way. <strong>The six largest groups of Romney donors were employees of big banks like Goldman Sachs and JPMorgan</strong>; wealthy hedge fund managers and private equity bosses gave millions more to GOP super PACs. But these Wall Streeters awoke on Nov. 7 to a sobering...</p> <a href="">More</a>By The Week StaffFri, 16 Nov 2012 06:11:00 -0500'The hustle': A guide to Bank of America's alleged mortgage fraud<img src="" /></P><p class="p1">The Justice Department sued Bank of America for a whopping $1 billion this week for allegedly selling toxic home loans to Fannie Mae and Freddie Mac, the government-controlled mortgage agencies. "The fraudulent conduct alleged in yesterday's complaint was spectacularly brazen," said U.S. Attorney Preet Bharara. Under a loan program known as "the hustle," from 2007 to 2009 Bank of America and its subsidiary Countrywide "made disastrously bad loans and stuck taxpayers with the bill," Bharara said. The case is one of the largest to be brought against a major bank for actions related to the financial...</p> <a href="">More</a>By The Week StaffThu, 25 Oct 2012 13:20:00 -0400Why I Left Goldman Sachs: Is the bank's most famous quitter a con man?<img src="" /></P><p class="p1">In March, Greg Smith lit up the financial world with an eye-catching&nbsp;op-ed in <em>The New York Times</em> titled "Why I am leaving Goldman Sachs." Smith, a former vice president at the company, decried the "toxic and destructive" environment at Goldman, which he said was so obsessed with profits that it no longer worked in the interest of its clients. Smith charged that inside Goldman, these less-savvy clients were derided as "muppets" who you could sell on financial products that were bad for investors but good for Goldman. (Goldman is currently battling a nearly identical charge in court.) Now, Smith...</p> <a href="">More</a>By The Week StaffFri, 19 Oct 2012 16:40:00 -0400Vikram Pandit's resignation: Time to break up Citigroup?<img src="" /></P><p class="p1">This week, Citigroup CEO Vikram Pandit abruptly stepped down from his post, sparking speculation that all is not well at the bank. Reports say Pandit clashed with the board, possibly over the future direction of the company, whose stock price has fallen 89 percent since Pandit took over. To be fair, Pandit got the job just before the financial crisis really began to spin out of control. But the fact remains that Citi is underperforming, and some say the bank has become too unwieldy to be properly managed. Is it time to break up Citi?</p><p class="p1"><strong>Yes. Investors are fed up:</strong> Compared to the money Citi brings...</p> <a href="">More</a>By The Week StaffThu, 18 Oct 2012 16:40:00 -0400Citigroup CEO Vikram Pandit's sudden resignation: 4 takeaways<img src="" /></P><p class="p1">Citigroup CEO Vikram Pandit abruptly resigned on Tuesday, taking Wall Street by surprise. "Given the progress we have made in the last few years, I have concluded that now is the right time for someone else to take the helm at Citigroup," said Pandit, who will be replaced by Michael Corbat, the head of Citigroup's European division. Citigroup President and Chief Operating Officer John Havens also stepped down, shaking up the leadership team that steered Citigroup through the financial crisis with the help of a $45 billion government bailout. Here, four takeaways from Pandit's sudden resignation...</p> <a href="">More</a>By The Week StaffTue, 16 Oct 2012 10:15:00 -0400The feds nail Capital One for preying on consumers: A guide<img src="" /></P><p class="p1">This week, the credit card company Capital One &mdash; famous for its viking-laden commercials and the slogan "What's in your wallet?" &mdash;&nbsp;agreed to pay $210 million to settle charges that it had overcharged its customers and misled them into buying unnecessary products. The settlement involved the first enforcement action taken by the Consumer Financial Protection Bureau (CFPB), an agency created in 2010 by the Dodd-Frank Act, a sweeping overhaul of the financial regulatory system. President Obama has championed the CFPB, saying it will protect consumers from the types of predatory lending...</p> <a href="">More</a>By The Week StaffThu, 19 Jul 2012 14:20:00 -0400Why JPMorgan Chase's stock is rising: 3 theories<img src="" /></P><p class="p1">JPMorgan Chase's earnings report for the second quarter showed that the bank had lost nearly $6 billion from a bad bet undertaken by a single trader who has come to be known as the "London Whale" for his outsized risk-taking. The admission appeared to leave JPMorgan open to claims that its much-vaunted "fortress balance sheet" model &mdash; in which risky investments are supposedly offset by protective measures &mdash; is flawed, and that the banking giant remains vulnerable to the types of losses that shook the industry during the financial crisis of 2008. However, investors are still pouring...</p> <a href="">More</a>By The Week StaffWed, 18 Jul 2012 18:05:00 -0400Wells Fargo's disgraceful discrimination scandal: A guide<img src="" /></P><p class="p1">This week, Wells Fargo agreed to pay $175 million to settle charges that it discriminated against thousands of blacks, Latinos, and other minority borrowers between 2004 and 2009. The Justice Department had accused Wells Fargo, the country's largest mortgage lender, of charging minority borrowers higher interest rates and fees on home loans than it charged white borrowers with similar credit ratings. Thomas Perez, an assistant attorney general at the department, slammed Wells Fargo for levying the equivalent of a "racial surtax." People&nbsp;"should be judged by the content of their creditworthiness...</p> <a href="">More</a>By The Week StaffFri, 13 Jul 2012 16:24:00 -0400