#bethany mclean

Haiku Duology, The Smartest Gal In The Room Talks Money

http://time.com/money/4104789/bethany-mclean-shaky-ground-fannie-freddie-talking-money/

“Resist evil; don’t – borrow against your own home – for extra money”

“How many of us – really know what we own in – our portfolios?”

http://billgatesfeed.nonissue.com/2014/10/09/bill-gates-is-way-more-involved-with-microsoft-than-anyone-realizes/ - #BillGates #Microsoft

Bill Gates Is Way More Involved With Microsoft Than Anyone Realizes

Yesterday I went to the Apple store to buy a new computer and the staff member helping me mentioned that he worked in The City until 2008. We agreed that his current job was more socially useful and when I tweeted the story I was asked to explain myself.

My explanation was that Apple is a company that makes things while banking is only socially useful when it acts as a utility supporting the real economy, but not when dominated by too-big-to-fail firms who have taken advantage of cheap government funding to compete against their clients.

In a really good piece Bethany McLean highlighted the resultant increase in fines paid by banks for mis-selling products and manipulating markets:

We seem to be living in an era where bankers can do no right. I can’t put it any better than a smart hedge fund friend of mine, who upon reading the news about the $410 million that JPMorgan paid to make allegations that it manipulated energy markets go away, sent me an email. “I am a bank friendly type,” he said. But, he added, in typically terse trader talk, “Something structurally amiss when so much financial activity is borderline.”

By one measurement, the problem has gotten worse by an order of magnitude in recent years. In the annual letter he writes to shareholders, Robert Wilmers, the chairman and CEO of M&T Bank, has started keeping track of the fines, sanctions and legal awards levied against the “Big Six” bank holding companies. In 2011, those penalties were $13.9 billion. In 2012, they more than doubled to $29.3 billion. Wilmers writes that the past two years represent the majority of the cumulative $52 billion in charges, from 236 separate actions in eight countries, over the past 11 years. 

So I was glad to hear the interview with Mark Carney, the new Governor of the Bank of England, on BBC Radio 4 this morning as he stressed that banks need to repair their culture, as well as their balance sheets:

"The focus [of a bank] has to be on the real economy - what it does for businesses making investments, what ultimately it means for jobs in the economy, and it's the loss of that focus… that becomes socially useless."