Juggling Dynamite

9+ years of on-going financial crisis in the world, has fueled justified criticism and outrage against a runaway investment banking sector. Political candidates everywhere are being asked to take a stand and explain what they will do to break up the banking cartel that was enabled to continue and grow fatter still after 2008.

Thanks to the efforts of many writers, academics and legal experts, as well as high profile reform advocates like Elizabeth Warren and Bernie Sanders, financial reform is set up to be a key issue of the 2016 US Presidential campaign.

Last night’s inclusion in the Republican platform of a call to restore division between commercial and investment banking, throws down a gauntlet to the Democrats to do likewise. Will they be pressured into a similar commitment? Might this force Clinton to pick Warren (who has already proposed a bipartisan Return to Glass Steagall Act in 2013) as her VP?  What party will the banks back then?  See  The Republican Platform’s surprise revival of Glass-Stegall legislation:

The last-minute decision to include in the Republican platform a call to restore the firewall between commercial and investment banking comes as a surprise, because Donald Trump himself has never publicly addressed or endorsed such a reform in his year-long presidential run.

Trump did once say at a debate in New Hampshire, “nobody knows banking better than I do,” but a review of the transcripts of all 12 Republican debates shows that he never endorsed restoring Glass-Steagall, legislation first passed in 1933. Websitesdevoted to detailing Trump’s positions find no record of him having any opinion on the Depression-era law. The issuespages of Trump’s presidential website steer clear of anything related to banks or finance.

…the platforms of both parties support a piece of legislation that neither party has had much interest in advancing for the past several years.”

Change moves in mysterious ways.  Just as Ferdinand Percora’s public exposure of unethical practices and business models in the banking sector proved a final catalyst for the break ups legislated in 1933, this political campaign could serve as another much-needed tipping point.

As the ‘vampire squid’ investment banking sector is slowly corralled and forced back under the rule of law once more, its revenues continue to retreat.

Long hailed as ‘the best of the best’ at institutional robbery, market manipulation and abuse of its customers, Goldman today announced that its overall revenues declined 13% in the second quarter while management slashed staff and expenses and reversed previous provisions for legal costs in order to goose earnings.  See Goldman details cost-savings plan after ‘challenging’ quarter:

Goldman Sachs Group Inc (NYSE: GS) reported a higher second-quarter profit on Tuesday, as it benefited from a sharp decline in expenses and more activity in some parts of the fixed-income markets, but most of its businesses came under pressure.

In response to a “challenging backdrop” for revenue, the Wall Street bank embarked on a cost-cutting plan in the first half of the year that will save $700 million a year, Chief Financial Officer Harvey Schwartz said on a conference call…

But overall revenue declined 13 percent as all of its other businesses reported weaker results. Goldman’s profit was buoyed by cost cuts and the fact that it had a large legal provision in the second quarter of 2015

I venture a forecast: as the firm is increasingly not allowed to call all the shots and queer all the rules and markets to its own ends at the expense of the public purse, management will seek to shed the firms ‘too big to fail’ systemically important institution status (as GE recently did) and go back to being a pure securities underwriting and sales firm.  Goldman will look to take its ball and go home, while saying how foolish the public is to demand tougher banking oversight and accountability.

All that access to ‘free money’ and unfair advantage and still Goldman’s stock price (shown below since 2005) has gone no where in 10 years during the wild credit bubble ride it helped to engineer.  Richly-priced advisors to a bevy of insolvent pensions and nations from Puerto Rico to Greece, the world will be far better off when it stops taking financial advice from ‘geniuses’ like this.

Donald has words…so does Melania. She seems to have the same ones as Michelle Obama from 2008 though. Cut and paste speech writer? Here is a direct video link.

And is it just me, or is it glaringly hypocritical that the republican nominee is using Freddie Mercury’s “We are the champions” for his campaign theme while at the same time promising an intensely anti-LGBT platform? Do they know Freddie was gay?