…some investors who attended the meeting said they were surprised to see that Potdevin, in his first major public appearance since he took the helm in January, didn’t exactly look the part of a fitness mogul. “He was kind of … dumpy,” one shareholder said, noting that Potdevin wore baggy clothes with an untucked shirt that failed to hide a bulging stomach. “If he’s a competent leader, he’s a competent leader,” another investor said. “But you’ve got to ask whether this guy is really in touch with the mind-set of his core customer in the athletic space.”
The story so far is that a few days ago Bloomberg View claimed that the ten biggest U.S. banks got an annual subsidy of $83 billion from being too big to fail. That claim seemed silly to me, and I said so, and this weekend Bloomberg responded to that post saying, and I quote, “we weren’t kidding.” Apparently the people who keep the blogging rulebook believe that I now have to write a post in response to their response to my response to their original claim, and so this is that post. Actually this is that footnote, whatever.1
Up here let’s be super super naïve and just ask: how much do too big to fail banks pay to fund their balance sheets, and how much would they pay if they were smaller and failier and less government-supported? One dumb way to go about answering that is to actually just look at the cost of funding of some banks. We can start with the big five that Bloomberg uses – JPMorgan, BofA, Citi, Wells Fargo, and Goldman – and compare them to some smaller banks. Since Bloomberg seems to believe that Fitch believes that the TBTF banks would be rated around BBB- were it not for their TBTF-ness, we can compare them to some banks rated BBB- by Fitch. I chose five BBB- rated bank holding companies pseudorandomly from Fitch’s web page: Associated Banc Corp, TCF Financial Corp., First Horizon National Corporation, First Niagara Financial Group, and Zions Bancorporation.2 Then I just looked at how much those banks paid for their funding (interest expense, preferred dividends), compared to how much the big five banks pay.
As you may have heard, things are not going so well for New York City* of late. Lower Manhattan has been without power for days. A hundred or so houses that once stood in Queens are now rubble. Staten Island has been destroyed. Those living uptown and in other areas that emerged relatively unscathed are dealing with survivor’s guilt. In spite of all that, Mayor Bloomberg has declared that the Marathon, scheduled for this Sunday, will go on, a decision that has been met with major outrage by people who believe the considerable resources that go toward putting on the race should be put to more critical use elsewhere, that the city does not need the strain of putting up an additional 40,000 people, that the supposed economic benefit would be a drop in the bucket of what NYC needs, that the generators sitting in Central Park right now could be helping those sitting in darkness, and that considering dead bodies are still being pulled of the water, it’s generally “too soon.” One guy who’d beg to differ? Ed Koch. Twenty-five years out of his mayorship, he still gets these people and while the media would have you believe holding the marathon has caused an enormously heated debate, he’s here to tell you that’s bull. New Yorkers want this and if Koch were still King? He’d be throwing a parade come Sunday, with A-Rod as Grand Marshal. Read more »
You might think that Dealbreaker HQ exists only metaphorically in virtual space, or maybe in the fan fiction you’re hiding in your desk, but in fact Bess and I share a real physical garrett both with our sibling sites Fashionista and Above the Law. Occasionally we even talk to each other. “Talk,” in this context, normally means that Above the Law editor Elie Mystal shouts at us about some outrageous political position. In order to quiet him down a bit, we’ve decided to take it to the internet, thus spawning the first – and maybe last! – Above the Law / Dealbreaker Debate Society.
I have been set the task of defending a proposition like “white collar criminals should not get anything near the jail time they get.” (We are pretty casual with our resolutions here at the Breaking Media Debate Society.) Fortunately I believe that, so here goes.
Let’s start with the basics. It’s not generally a net good to send someone to prison. They have children and friends and dogs who depend on them. So you need a reason to fuck up their lives. The pretty accepted theory is that you punish people to stop them from doing more bad things, to deter others from doing bad things, and/or because you have a moral objection to what they’re doing. The first – “incapacitation” – doesn’t argue much for imprisoning insider traders. It’s pretty easy, once you’ve caught them, to make sure they don’t do it again. Banning them from the securities industry usually does the trick. Everyone in the Galleon case – like almost every insider trader ever caught – is a first-time offender.
The second – “deterrence” – does make sense. People who work at hedge funds really don’t want to go to jail. Compared to their Greenwich homes, jail has worse food, more violence, and fewer golden retrievers. Also they get ordered around by people with less education than them, which is why they left BofA in the first place. Read more »
On several occasions around these parts, we’ve had discussions about what constitutes a worthy food eating challenge. And, more to the point, what constitutes a food eating challenge worth covering. To understand our position, one must know the history of our writing about The Food Eating Challenge (FEC), which began with a trader named Ian AKA Oyster Boy, who, in the summer of 2007, bet that he could consume 144 oysters in one hour at Ulysses. He completed the task at hand in a mere 15 minutes and then, ate 100 more in the remaining 45 minutes (which the staff had to bring in from next door, as they’d run out after the first leg). The gauntlet had been thrown down. And while a good number of you set out to perform feats of gastrointestinal fortitude that were imaginative, topical and, most importantly somewhat difficult, some thought that endeavoring to consume 8 vending machine items in 12 hours could be considered a challenge. After a while, we stated that such combinations of quantity + time would not be chronicled on our watch, in order to save yourselves (and ourselves) the embarrassment (first and second hand) of not only thinking that what amounts to a snack could be considered something someone would have a hard time completing but the shame of not even finishing it, which happened more than once.
Which brings us to a FEC that occurred earlier today at Citigroup, the merits of which are currently being hotly debated. Read more »