Tuesday, May 25, 2010

Quotes of the day

Now I’m rather looking forward to seeing BP’s position on using a “trick … to hide the decline”. If similar language crops in BP’s correspondence about the Gulf of Mexico deepwater, I doubt whether US regulators would be quite as blase as climate scientists.--Steve McIntyre

A study by the National Center for Policy Analysis shows that tax credits in the new healthcare law could negatively impact small-business hiring decisions. The new law provides a 50 percent tax credit to companies offering health coverage that have fewer than 10 workers who, on average, earn $25,000 a year. The tax credit is reduced as more employees are added to the payroll.--Jay Heflin

Wall Street’s reaction to the unveiling of the Volcker Rule came swiftly and was even harsher than Geithner had feared. The Dow promptly plunged 213 points, with bank stocks leading the way down. “It was like the White House said, ‘Okay, we lost Massachusetts, health care is screwed, so let’s go after Wall Street,’ ” says the CEO of one of the nation’s biggest banks. “And for a lot of Wall Street people, it was like, ‘Okay, first you slap us in the face, now you kick us in the balls. Enough is enough. I mean, we’re done.’ ” On May 20, the Senate passed its bill to reregulate Wall Street by a vote of 59-39, complete with a (watery) version of the Volcker Rule. The story of the legislation’s passage can be told in a number of ways: a tale of conflict or compromise, triumph or capitulation. But on any reading, that story is only the climactic chapter in a larger narrative: how the masters of the money game fell out of love with—and into a state of bitter, seething, hysterical fury toward—Obama. ... Blankfein and Dimon share the crown warily, uneasily. At a recent industry event in Washington, Dimon was giving a presentation and struggling with his laptop when Blankfein cracked from the audience, “I’m feeling a bit better about my competitive position”—to which Dimon cheekily shot back, “Just doing God’s work up here, Lloyd.” ... For Blankfein, Dimon, and other Wall Street bigwigs, [attempt to claw back AIG bonuses] was worrying on two levels. “First, the White House decides in this blatant way to politicize the issue,” explains a financial-industry lobbyist. “Second, they overshoot the target and the thing gets away from them. It made people realize there’s no adult in charge. If Bob Rubin or Hank Paulson were Treasury secretary, they would have walked into the Oval Office and said, ‘Mr. President, I know you’d like to do this, I know your political advisers want you do this, but I’m sorry, you can’t do this.’ ” ... Unpleasant as the policies were in the view of the financiers (Dimon: “Using tax policy to punish people is a bad idea”), what seemed to upset them even more was the shift to a more hostile tone (Dimon: “The incessant broad-based vilification of the banking industry isn’t fair, and it is damaging”). To Wall Street, what was going on was crystal clear: Obama had succumbed entirely to the dictates of his political handlers. ... Not long ago, a big-time Obama Wall Street fund-raiser asked his go-to guy at one of the megabanks that had lavishly supported the candidate in 2008 what level of donations the president might expect from the firm’s people in 2012. The answer was less than a tenth of the previous total. --John Heilemann

[Senator Bob Casey] is introducing legislation for a bailout of troubled union pension funds. If passed, the bill could put another $165 billion in liabilities on the shoulders of American taxpayers.--Erik Berte

The Least Helpful Call you will receive today—and we are fairly certain there has been no less helpful call provided by Wall Street’s Finest this morning—is brought to you by J.P. Morgan Cazenove, whose analysts took it upon themselves to downgrade...the Greek banks.--Jeff Matthews

Beautiful candidates are indeed more likely to be elected, with a one standard deviation increase in beauty associated with a 1½ – 2 percentage point increase in voteshare.--The Australian National University Centre for Economic Policy Research

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