News Jul 2014

From the Week of July 27th – August 2nd
1. One extremely rich American trumps 41 million Argentines.
This is a great example of what is wrong with the world today. That, and the fact that so few people seem outraged.
– Argentina Finds Relentless Foe in Paul Singer’s Hedge Fund
– The Justice of Argentina’s Default
Argentina Default Is Ruled a Credit Event for Swaps

2. Corporate Artful Dodgers
A loophole so big whole companies can slip through.

3. Drug Maker Hospira and France’s Danone in Talks on $5 Billion Inversion Deal
If completed, the deal could be considered a “spinversion,” in which a foreign company spins off a unit to an American buyer that then reincorporates overseas.

4. Whether ‘Sophisticated’ Clients of Wall Street Can Also Get Duped
Wall Street firms accused of fraud often use the “sophisticated client” defense, arguing that their customers would not have been misled by slick marketing, Peter J. Henning writes in the White Collar Watch column.

5. Banks Cash In on Inversion Deals Intended to Elude Taxes
Wall Street banks are estimated to have collected, or will soon collect, nearly $1 billion in fees over the last three years advising and persuading American companies to move the address of their headquarters abroad.

6. McDonald’s Ruling Could Open Door for Unions
If upheld, the decision by the National Labor Relations Board’s general counsel could upend employment practices in the fast-food industry and invite unionization.

7. Why Can’t the Banking Industry Solve Its Ethics Problems?
Scandals keep occurring, even after the financial crisis, raising the uncomfortable possibility that the industry is fundamentally flawed.

8. Fast-Food Workers Intensify Fight for $15 an Hour
About 1,200 workers from around the country gathered in Illinois at an event largely underwritten by the Service Employees International Union, but the U.S. Chamber of Commerce is dubious of the union’s intentions.

9. Bank of England Sets Tough Rules for Banker Bonuses
The new bonus rules will allow banks with headquarters or subsidiaries in England to claw back for up to seven years bonuses paid to bankers who engage in wrongdoing.

10. Union Limits and Voter ID Rule Upheld in Wisconsin
In two major rulings, the Wisconsin Supreme Court upheld a divisive state law that effectively ended collective bargaining for most public workers.

11. Big Banks and Treasury See Positive Signs in Report on Financial Industry
A new report issued by the Government Accountability Office sought to answer whether big banks still enjoy an effective subsidy because of implied government support.

From the Week of July 20 – July 26
1.Recommended reading in prep for Speaker on July 27th
An Open Letter to the Financial Services Industry From a Concerned Millennial
Impact investing on the cusp of mainstream wealth management

About Impact Banking (food for thought NOT endorsements)
Ethical Banking
Promoting and Directing Social, Political, Economic or Environmental Change through Banking
Global Alliance for Banking on Values
Mission Markets’s Research Platform (free to sign up)
Is Targeting the Unbanked Trendy Now Among Big Banks?
Chase Pledges $30 MM to Help the Unbanked Build Credit and Assets
The Overdraft Problem Is Really a Credit Problem
Consumers in need for credit are turning to overdraft because they lack better options.

2. In a Subprime Bubble for Used Cars, Borrowers Pay Sky-High Rates
Millions of Americans are receiving auto loans they cannot possibly afford, in a lending climate marked by some of the same lack of caution seen in the housing industry before its 2008 implosion.

3. Senate Inquiry Faults Hedge Funds’ Tax Strategy
Hedge funds have claimed billions of dollars in tax savings through complex financial structures created by Barclays and Deutsche Bank, according to the inquiry.

4. Dodd-Frank’s four years of doing nothing
Four years later, the too big to fail banks are still woefully undercapitalized. Says Bloomberg News.

5. Governor Andrew Cuomo kills corruption commission because it wanted to investigate corruption. Didn’t they realize they were just for show.

6. Private Equity’s Free Pass
On their way to big profits, private equity firms often act like investment banks, but aren’t subject to the same rules.

7. Private Equity’s Free Pass
On their way to big profits, private equity firms often act like investment banks, but aren’t subject to the same rules.


From the Week of July 13 – July 19
1. Chase Pledges $30 MM to Help the Unbanked Build Credit and Assets
The Overdraft Problem Is Really a Credit Problem

2. Reluctantly, Patriot Flees Homeland for Greener Tax Pastures
Another company is moving its headquarters to Europe, in part to pay lower taxes. This time, it’s led by the daughter of a United States senator.

3. Britain Plans to Cap Charges on Payday Loans
The financial regulator called for a limit on interest and fees, including that the cost of any loan would not exceed the amount borrowed.

4. A Push to Give Steadier Shifts to Part-Timers
Unpredictable hours and on-call shifts have kindled a nationwide movement to give part-time workers more rights.

5. At NewYork-Presbyterian Hospital, Its Ex-C.E.O. Finds Lucrative Work
Despite retiring as president and chief executive, Dr. Herbert Pardes continues to earn millions as executive vice chairman of the hospital’s board of trustees.

6. Motivating Corporations to Do Good
Businesses once addressed the needs of workers and society, partly out of self-interest. Now the shareholder is king.

7. Did the Other Shoe Just Drop?
Big Banks Hit with Monster $250 Billion Lawsuit in Housing Crisis

8. Treasury Urges End to Foreign Tax Flights, Though Congress Is Unlikely to Act Soon
Treasury Secretary Jacob J. Lew told Congress the Obama administration supports a quick fix to halt the trend of so-called inversions, in which American companies buy a smaller competitor and reincorporate overseas to save money on taxes.

9. Shunting the Homeless From Sight
A ruling sent an emphatic signal that the nation’s burgeoning homelessness problem cannot be dealt with by criminalizing behavior driven by the need to survive.

10. LeBron and Melo Have Nothing on Eric Cantor
Now the former House majority leader is looking for his own max deal.

11. A Push to Give Steadier Shifts to Part-Timers
“The actions reflect a growing national movement — fueled by women’s and labor groups —

12. Librarians lack Lebron’s pull as arena deal precedes cuts
Somehow, there is money for arenas and stadiums but not libraries, schools, hospitals. This is true in Brazil, Miami, Detroit …
From the Week of July 6 – July 12
1. Since we have a speaker during the regular meeting time we might only have time to talk afterwards about:
The Myth of America’s Golden Age.
What growing up in Gary, Indiana, taught me about inequality.

2. Exposing the False Economy of Offshoring (hat tip to Bruce)
Losing Sparta: The Bitter Truth Behind the Gospel of Productivity

3. We highly recommend the “ExtraEnvironmentalist” podcast. Notable recent on “Open Knowledge Society” Co-host Justin Richie will be a guest speaker at Alternative Banking in August (via Skype).

4. Hillary
Wall Street gives millions to Hillary (for speaking fees, of course). She says “it is unproductive to villify the industry.” and, at a personal level at least, she is surely correct.
Chelsea cashes in too.
– Planning ahead: Neo-cons toady to Hillary

5. Supermanagers and the social psychology of wealth
About the differences between the last, early-20th-century inequality peak and today. ie. the composition of wealth and income has changed: more of the income of the wealthy today comes from (ostensibly, at least) work.

6. A Senate committee just approved a constitutional amendment to reverse Citizens United
The proposal, sponsored by Senator Tom Udall (D-NM), is intended to reverse recent Supreme Court rulings that have deregulated the campaign finance system, such as Citizens United and McCutcheon v. FEC. It would allow limits on outside spending in support of candidates.


From the Week of June 29 – July 5
1. The C.E.O. Is My Friend. So Back Off.
A study’s surprising finding: If company directors have disclosed that they’re friends with the chief executive, they’re even more likely to try to give him a bonus.

2. In Home Loans, Subprime Fades as a Dirty Word
Facing a tight credit market, homebuyers are turning to a safer version of the subprime mortgage, a culprit of the 2008 housing crash.

3. Secrecy of Dark Pools Can Blur Both Ways
The reason for creating dark pools was to protect large investors from predatory trading, but what seems to have escaped notice is that a lack of transparency is almost sure to invite abuses, Peter J. Henning writes in the White Collar Watch column.

4. Financial Markets
Central Bankers, Worried About Bubbles, Rebuke Markets
In its annual report, the Bank for International Settlements expressed concern about investors driving up asset prices with little regard for the risks.
Beyond Stagnation
Larry Summers, former economic adviser to both Bill Clinton and Barack Obama, laid out a decidedly pessimistic view of the U.S. economy.

5. Yes, if You Cut Taxes, You Get Less Tax Revenue
In 2012, Kansas passed a big and unusual tax cut in the name of small business. But now the state is grappling with a shortage in tax revenue that is straining its budget.

6. A Grieving Father Pulls a Thread That Unravels BNP’s Illegal Deals
A bus bombing two decades ago — and a father’s quest for justice — led U.S. authorities to build a case against BNP Paribas for transferring money to blacklisted countries.

7. At Walgreen, Renouncing Corporate Citizenship
Walgreen’s chief, who said he was “proud of our Illinois heritage,” is considering a merger that would move its headquarters to Switzerland in a bid to decrease its tax bill.

8. In BNP Paribas Case, an Example of How Mighty the Dollar Is
Being the holder of the world’s reserve currency gives the United States surprising power over things that might seem unrelated to finance.

9. Mystery bidder wins auction of Silk Road’s nearly 30,000 bitcoin
US marshals do not release name of successful bidder as prominent contenders come forward and bitcoin prices rise

10. Conspiracy of the plutocrats: Secrets of the wealth-inequality explosion revealed
Piketty protégé Gabriel Zucman explains how the world’s wealthiest are scamming governments for trillions

11. Why We Might Be on the Verge of Another Financial Crash
As individual companies become more productive, the economy has remained stagnant because there is little demand for goods.

12. Worker-owner Cooperatives Taking Root in the US

13. The Myth of America’s Golden Age
What growing up in Gary, Indiana, taught me about inequality.

14. Moaning Moguls
Why are the super rich so angry?

15. Another Failure to Regulate Derivatives
The new S.E.C. rule does not protect Americans and the financial system from the ravages of unregulated derivatives trading.

16. China Takes Step Toward Freeing Currency from State Control
Beijing has let banks set their own exchange rates for the renminbi in over-the-counter transactions.


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