Since I’ve gotten exposure to the financial world in news, one thing that has always stuck with me is how firms and officials dance around accountability; for example, no one has gone to jail due to the 2008 financial crisis.
That’s why today’s announcement that JP Morgan has to pay almost a billion dollars AND admitted wrongdoing comes as a surprise for me. This comes as a shift in behavior from the SEC, the financial regulating body of the government and its new, aggressive leadership in the form of Mary Jo White. Banks and other large institutions do not normally admit any wrong doing despite settling with regulatory agencies because admitting wrongdoing can make itself vulnerable if future inconsistencies happen.
Here are some of my favourite the more recent scandals post-financial crisis.
JP Morgan’s oversight led to $6 billion in trading losses in early 2012.
Barclay’s has been implicated to manipulating the LIBOR rate – the London Inter-bank Offered Rate which is an important benchmark rates that influence things like mortgages or car payments.
HSBC has been money laundering for Mexican drug cartels. I wonder if Walter White has his money there.
The SOMC is a gathering of economists, pundits and central bankers who respond to the Federal Open Market Comittee or FOMC for short which is where the Federal Reserve comes together to announce big decisions regarding policy actions.
This SOMC gathering is especially notable because it comes right after the FOMC meeting earlier this week that decided to not taper, or in layman’s terms, scale back its large asset purchase program of $85 billion dollars a month. Esther George, the sole dissenter of the tapering decision and Governor of the Kansas Fed, was the guest of honor and it was nice to hear an alternate perspective of the FOMC.
I recognize parts of New York because of ‘Grand Theft Auto IV’. The open-world video game where you take on various citizens of a fictionalized New York is so painstakingly recreated that I can see my college dorm. It’s also, really fun and a story-telling masterpiece but more importantly its sequel, ‘Grand Theft Auto V’ comes out TODAY.
‘Grand Theft Auto V’ is poised to reap about a $1-1.6 billion dollars in sales after being released today. That’s about 20-25 million units at $50 bucks a pop. The game cost about $250 million dollars to make and, if it were a movie, would be more than twice as successful as this year’s most successful domestic movie, Iron Man 3.
GTA V comes at a time when the video industry, like the movie industry, is shifting from expensive blockbuster games to cheaper mobile games like Angry Birds which are much more easier to produce but have massive commercial success. After all, retail sales of more expensive video games have declined whereas digital downloads of cheaper games have increased in the last year.
Game console companies have taken note and the next iteration of Xboxes and Playstations, launching later this year, feature are media machines able to digital connect movies, music, digital context like Netflix and maybe TV down the line. Nintendo, has traditionally taken a more gaming-centric approach, eschewing these media features, to their platform has seen disappointing sales month after month and a sinking stock.
Takeaway: ‘Grand Theft Auto V’ is one of the most important games not just because it’s (critically) awesome but is a remnant of old-fashioned analog game making in an increasing mobile and digital industry space.
I think part of the obtuseness of working in “Finance” can be summed up by the Bloomberg Terminal. The terminal, the leading physical extension of financial data vending, surely pops into people’s minds when they think of “Finance”. 2-6 screens, a black background to display charts and tickers and acronyms and numbers whizzing in and out it is a the personification of a ‘black box’. It’s definitely not intuitive; there’s a test you can take to show that you are ‘qualified’ to maneuver its various functions. And yet, it’s one of the most useful things I have access to in my job.
People agree with me; there are over 300,000 terminals world wide and is a money making machine. You see, unlike traditional computers, you don’t buy the terminal; you rent it. With subscriptions fees around $1,500-2,000 a month per terminal it is a billion dollar revenue generator ($8 billion to be exact).
Part of the reason it’s been successful is because it’s really, really good. It provides real-time and historical information for anything I can think of, has a 24-7 live customer service that can entertain requests from “How do I make this kind of chart?” to more technical things and always has a sales representative check in with you and your subscription and it makes it easy for me to manipulate data however I want to. Also, it’s fast. No matter what the graph, function or feature, nothing every takes more than a few seconds if that so providing a sense of reassurance. As if to hammer that point home, the service has greatly expanded from just a data vendor to a media conglomerate having a real-time news ticker, Bloomberg live TV, website, radio, conferences, a standardized test like the SATs for Finance. They understand what users want and it gives it to them in the most painless way possible.
The other reason is because of its success is that it rode the wave of analog to digital conversion and in the 1980s and bankers have not Wall Street-ers have not converted to any competitor. It’s been compared to challenging Facebook. Case in point; Thompson Reuters tried to launch their similar service in 2010 but only estimated to have less than one terminal every hundred Bloomberg terminals despite a billion dollars in research and marketing, a cleaner user interface and cheaper fees. But the problem with Reuters is that despite aesthetically looking better, it does the basic things wrong like long loading times and limited amounts of data.
Takeaway: Like the man himself, the Bloomberg terminal is an extension of the efficiency and ambition of the ’80s. And it spies on you.
New York Fashion week is abound and the most amazing thing I dissevered besides Kanye West being at a college campus is that some fashion bloggers earn seven figures (which is about at least a dollar per unique visitor on a good month). But that’s not just a sole outlier, around 2% of the top bloggers make it big and blogs are valued and bought just as any other media property would be.
As a New Yorker, I paid attention to the results of the mayoral primaries showing public advocate Bill DeBlasio representing Democrats and MTA-head Joe Lhota representing the Republicans in the Nov. 5 election. I, like a lot of residents of New York, cannot vote but I strongly believe in the process. That’s why I was a little annoyed at piece written by a current student of my alma mater (well, kind of) who wrote that she would “turn [her] attention away ” from the election because “modern American politics has become an absolute bore”.
I wrote a slightly overkill response:
Dear Ms. Lerner,
I appreciate you writing an article about your thoughts on New York and American politics but I have to heartily disagree with your thesis that “modern American politics has become an absolute bore” even at the mayoral level.
Never mind the fact that the president has asked Congress, something that hasn’t been done since WWII, to vote on entering another conflict in the Middle East. Syria was also a sticking point for the past presidential election which, as you suggested, was overshadowed my Donald Trump by some voters. But, let’s focus this on NYC.
You wrote about how there should be more efficient subways and a MetroCard discount, great ideas. The Republican primary winner, Joe Lhota, used to be the head of the MTA and has given controversial pay raises to MTA employees resulting in 8,000 employees of the MTA earning more than 6 figures. Mr. Lhota’s past experience certainly be a factor for his candidacy. But you declared yourself a Democrat so let’s talk about the Democrats especially since New York’s Democrats outnumber Republicans 6:1.
The major sticking point of the Democratic primary debates was the policy of stop-and-frisk which, according to Mayor Bloomberg, has made the city safer but may not be unconstitutional. Mr. DeBlasio, seemingly the Democratic candidate, calls to stop the policy but that’s very different than what Mr. Weiner or Ms. Quinn, who were both front runners of the Race before Mr. DeBlasio rose to the lead one month ago, believe. You also called for investing in underprivileged students and infrastructure but should New York tax its citizens more or allocate resources from other departments? Each candidate, Democrat or not, has widely different views and policies.
I share your frustration with the tabloidization of politics but there definitely is meaningful discussion to be had after listening and analyzing what each candidate has to say. Being the mayor of the biggest city in America has consequences for each student of Columbia and citizen of New York City. Instead of, turning away from the discussion, I really encourage you to go out and be informed about the differences in policy and rhetoric between the now two candidates for the office.
I do live in the city but don’t have the privilege of voting for its mayor so I really hope voters like yourself are making the best possible decision for the future of New York.