Thing One: Will Wall Street <3 Paul Ryan?: By choosing Paul Ryan as his running mate, it appears Mitt Romney picked someone with just as much in common with your average Wall Streeter. Ryan, who sports “clean-cut Brooks Brothers looks,” makes his own trades with shares of some of America’s favorite stocks in his spare time, according to Andrew Ross Sorkin of The New York Times. Ryan’s intimacy with Wall Street also extends to his fundraising; some of his top donors include workers at Bank of America, Wells Fargo and Goldman Sachs.
But as Sorkin notes, Ryan has voiced some metered criticism of the too-big-to-fail model, which may make him unpopular with the bankers, even though he voted to repeal the Glass-Steagal Act in 1999.. Still, his past love with the free-market-loving Ayn Rand and a dislike for financial reform may just save him.
Of course, these same qualities do little to convince progressive economists. Nobel Prize-winning economist and New York Times columnist Paul Krugman called Ryan’s budget “just a fantasy,” for one.
Thing Two: Time To Pump The Breaks: It’s becoming increasingly obvious that the army of robots being amassed on Wall Street to do trades at lightning speed isn’t doing much to help investors. It may in fact be hurting them. Even as Wall Street has brought more machines on the scene, the cost to an investor of getting in and out of a trade has ticked up since 2010, The New York Times reports. With the machines doing little to boost investor returns and causing the occasional Knight Capital disaster, even proponents of innovation are having a tough time defending the high-speed trading arms race.
At least Knight’s loss has helped regulators, the public and the industry experience a “wake-up call” as David Whitcomb, founder of Automated Trading Desk LLC, a Knight rival, described it to Bloomberg. Knight was responsible for a similar disaster 10 years ago and got off essentially scot free. This time, the firm is facing scrutiny and its stock has dropped 73 percent in the wake of the trading loss.
Thing Three: The Pond Is Full Of Tension: Uh oh, American and British regulators are getting into a bit of a tiff. The policymakers have taken part in two semi-polite fights over the past two months thanks to two banking scandals, the Wall Street Journal reports. Claims that British bank Standard Chartered had dealings with Iranian ties worth hundreds of millions of dollars had American regulators explaining how they enforce their sanctions laws. The company’s CEO is in New York this week to prepare for a hearing on the allegations, according to Bloomberg.
The regulators also had measured dealings over their respective handlings of the Libor-rigging scandal last month. The boost in tension “is a sign of the pressure that recent banking scandals and crises have put on financial authorities, who have been accused of being too lax in their oversight,” according to the WSJ. Maybe a little pressure is a good thing?
Thing Four: CEO Could Go To Prison Forever: Russell Wasendorf, the CEO that stole more than $100 million from his customers over 20 years, just can’t seem to catch a break. On Monday, Wasendorf was indicted on charges of lying to regulators. If convicted, he could face a maximum sentence of 155 years in prison and a $7.75 million fine.
Actually, the choice to indict Wasendorf was so obvious that the jury only needed one day of hearing testimony to hand down the indictment, according to the Wall Street Journal. That could be because the note he left when he tried to commit suicide last month detailed exactly how he bilked his customers.
Thing Five: Dodd-Frank Watered Down: In the latest news of how politicians and lobbyists are managing to water down Dodd-Frank, a provision of the financial reform legislation aimed at protecting the interests of taxpayers in municipal bond deals has been bogged down in Congress for nearly two years, The New York Times reports. The measure would make advisers on municipal bond deals, “fiduciaries,” in other words they would be mandated to put the interests of the people that hired them ahead of their own, which in this case is the taxpayer.
But the provision is in danger of being eliminated by a House bill sponsored by Illinois Republican Robert J. Dold. That may not be such a good idea, particularly given the high rate of municipal bankruptcies in recent months; three cities in California have already gone bankrupt with the possibility of a fourth on the way -- and that’s just the municipal woes of one state.
Thing Six: Things Are Sort Of Meh For Jamie Dimon: Looks like Jamie Dimon’s list of problems is only growing. His bank is getting sued by a community college district over its efforts to enforce an odd financing contract that the Peralta Community College District agreed to in 2006 when interest was much higher, according to Reuters.
"JP Morgan Chase's plan would wrongly shift savings from interest rate declines away from taxpayers and to JP Morgan's bottom line," said a spokesman for the Bay Area community college district told Reuters.
Meanwhile, Dimon is getting a little bit frustrated with the fact that he has to defend himself and his bank at every turn. In an interview with New York magazine, published Monday Dimon defended Wall Street and his criticism of financial regulation by articulately noting that “It's a free. Fucking. Country."
Thing Seven: HSBC Trying To Stop Money Laundering: HSBC, that bank accused by a Senate committee of laundering money for drug dealers and terrorists, is hiring a former government official that enforced sanctions against drug dealers and terrorists, the Wall Street Journal reports. Ex-director of the Office of Foreign Assets Control, Robert Werner, will serve as the bank’s head of global standards assurance, a post created in the wake of the allegations.
Thing Seven And One Half: RIP Helen Gurley Brown: Legendary Cosmopolitan editor Helen Gurley Brown died yesterday at the age of 90. Brown became well known in the early 1960s after writing “Sex and the Single Girl,” a book of advice and anecdotes for and about single women. She was later hired by Cosmo and revamped the magazine to be more like what it is today.
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Calendar Du Jour:
8:30 a.m. ET: July Retail Sales
Heard On The Tweets:
@ggreenwald: For those who haven't heard: the Paul Ryan pick means we're about to have some reallly serious debates about really serious issues
@PIMCO: GROSS: Do bond markets take heart from Ryan selection? Not me. He talks lower deficits but really believes in lower taxes – exact opposite.
@zerohedge: Can Morgan Stanley please IPO more companies? Short sellers need jobs too.
@AriMelber: AP now: "Romney said there may be differences between his budget and Ryan's," but refused to offer "specific" examples that differed.
-- Calendar and tweets rounded up by Khadeeja Safdar.
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