Early the morning of November 7th, as he delivered his victory speech to supporters in Chicago, Barack Obama was met with jubilant applause, as he promised “the best is yet to come” for America. By mid-day, however, the party was over: US stock markets declined sharply, with the S&P 500 Index closing the day down over 2%, leaving US investors with a particularly severe hangover after the fifth – worst post-Election Day sell-off in history. The S&P continued its decline Thursday, ending the day down a further 1.25%, for a decline of over 3% across the two trading sessions. The…
Author: Kaitlin Wood
In May of 2012, Dewey & LeBoeuf LLP filed for bankruptcy. After sustaining itself for years on the “Big-Law” business model, too many financial missteps led to fleeing partners, which ultimately resulted in one of the biggest law firm meltdowns in US history. Despite its downfall, the firm has implemented a novel strategy during its bankruptcy proceeding that has caught everyone’s attention. Like many other mega-firms in the law industry today, Dewey’s constant expansions and lawyer recruitment from competing firms made for an atmosphere of dissimilar backgrounds and interests. While this mentality does little to foster a firm culture or…
When something around you breaks, there is one universal response: “I didn’t do it.” Whether you are a child, a businessman, a criminal, or a presidential candidate, you will most likely be inclined to deny everything and to make counter-accusations. We are obsessed with blame, particularly with avoiding it. The recent presidential debates have been a sad and embarrassing reminder of this self-centered obsession. For the past few weeks, Mr. Obama and Mr. Romney have spent the majority of their time denying any responsibility for the state of the economy and attempting to place the blame on anyone or anything…
By: Jared Sorin Many in the U.S. recognize that we truly are a nation of immigrants, but few understand the extent to which the U.S. economy has long been fueled by talent that comes here from abroad. Immigrants are increasingly the driving force behind innovation, research and development and are far more likely to start companies. Unfortunately, however, political debate on the role of immigrants in America far too often finds immigration policies in place that make it difficult for them to stay or and even actively disincentivize them to do so. Currently, the annual demand for visas greatly outweighs…
By: Ramona Ortega This week Bank of America finds itself facing the largest fraud lawsuit thus far as a result of the mortgage debacle. The Justice Department filed the complaint in Manhattan federal court on Wednesday, and powerhouse U.S. Attorney Preet Bharara, who led the charge against Raj Rajaratnam of the Galleon Group, is at the head of the effort. This is the second suit involving mortgage back securities filed by the government this month. The lawsuit stems from the role BOA and Countrywide played in a scheme called the “Hustle”. The Hustle was a scheme that originated and sold…
By: Adam Levy During the first debate, presidential candidate Mitt Romney called Tesla Motors, along with Solyndra, Ener1, and Fisker, “losers.” Governor Romney reiterated his displeasure with the Department of Energy’s (“DOE”) green investment portfolio in the last debate, and the recent bankruptcy filing of A123 has encouraged others to launch similar criticism. Most of these companies received loans or loan guarantees from the DOE intended for the development of innovative green energy technologies. Here is a list of all the DOE green energy loan projects for reference. Whether this or that energy company is a “loser,” however, misses the…
By: Jason Hsu High frequency trading (“HFT,” and also known as low-latency trading) is the use of automated programs to execute securities orders rapidly, generally to take advantage of small market disparities. Importantly, statistics indicate that HFT currently comprises approximately 50% to 70% of United States daily equity volume. While HFT has undeniably provided important benefits for investors, it has also been heavily criticized, receiving blame for the May 2010 “flash crash,” and other recent ‘market glitches.’ As a result, HFT has become increasingly scrutinized by regulators around the globe, with Germany recently unveiling broad legislation over the practice, and…
By: Noelle Indelicato The Commodity Futures Trading Commission (CFTC) has ramped up Wall Street regulatory enforcement in 2012. The CFTC released its Enforcement Division’s annual results on October 5, 2012, stating that it imposed more than $585 million in sanctions in fiscal year 2012. Only $450 million in sanctions were imposed in fiscal year 2011. This increase is largely due to the $200 million fine the CFTC imposed on Barclays PLC for attempted manipulation of the London Interbank Offered Rate (LIBOR) and other benchmark interest rates. In fact, this is the CFTC’s largest fine ever. The CFTC plans to continue…
By: Mark Semotiuk On August 17th, the Treasury Department revamped its financial support of Fannie Mae and Freddie Mac. The new agreements increased the share of profits payable to the Treasury. The Treasury Department also accelerated the pace at which the mortgage-finance giants are required to wind down their mortgage portfolios and pay back the government for their rescue four years ago. The initial agreements (FNMA, FHLMC), which were entered into in September of 2008, provided up to $100 billion each in exchange for senior preferred stock which accrued dividends at 10%. The agreements were subsequently amended in May and…
By: Jared Sorin New York’s economy is rapidly transitioning from one based largely on the financial services sector to one that is becoming far more heavily reliant on technology, new media, and other entrepreneurial startups. New York-area entrepreneurs have been replacing yuppie investment bankers as the heroes of the economy. In the past two years alone, venture funding for companies in their very earliest stages of development increased substantially. Dow Jones VentureSource measured a 52% increase in venture-capital seed investments, based largely on the dramatic number of consumer Internet companies. Similarly, just last month a report from CB Insights stated…