Financial Crisis

There is a shiny, brittle skin to the economic recovery that conceals an unhealthy flesh underneath. It is tempting to call this condition a glass half empty. But seeking the healthy and the fit in nontraditional places has become a quest for more and more Americans who are leading us down a pathway that diverges, from the mainstream towards a new future. Out of earshot of the mainstream media and off of Main Street, there is a glass half full.  read more »

There’s been so much ink spilled over Detroit’s bankruptcy that I haven’t felt the need to add much to it. But this week the judge overseeing the case ruled that the city of Detroit is eligible for bankruptcy. He also went ahead and ruled that pensions can be cut for the city’s retirees. Meanwhile, the city has received an appraisal of less than $2 billion for the most famous paintings in the Detroit Institute of the Arts.

A couple of thoughts on this:  read more »

A recent visit by President Obama to an Ohio steel mill underscored his promise to create 1 million manufacturing jobs. On the same day, Commerce Secretary Penny Pritzker announced her department’s commitment to exports, saying “Trade must become a bigger part of the DNA of our economy.”  read more »

The headline read, “We Have Become a Nation of Hamburger Flippers: Dan Alpert Breaks Down the Jobs Report.” Seems that Alpert, the managing partner of New York investment bank Westwood Capital, LLC, was unhappy that most of the jobs created in July were for low-wage workers.  read more »

Over the past 60 years, financial services’ share of the economy has exploded from 2.5% to 8.5% of GDP. Even if you believe, as we do, that financialization is not a healthy trend, the sector boasts a high number of relatively well-paid jobs that most cities would welcome.

Yet our list of the fastest-growing finance economies is a surprising one that includes many “second-tier” cities that most would not associate with banking.  read more »

When the cardinals sent billowing white smoke from their conclave and elected Jorge Mario Bergoglio as Pope Francis I, little did the Catholic Church realize that two millennia of ecumenical liturgy might come unraveled on the heresy of offshore banking regulations. Among the many frustrations that drove Pope Benedict XVI to take early retirement was his role as guardian angel of the Institute for the Works of Religion (the formal title for the Vatican Bank), which can no longer get past compliance questions by answering that its beneficial owner is “the Almighty.”  read more »

Because so many chief executives of failed or mediocre companies have walked away with millions in bonuses and swag bags, both Switzerland and the European Union recently voted to put a cap on corporate bonuses, limiting them to a small multiple of base salary. What prompted the acceptance of the “Minder Initiative”—named after the independent parliamentarian who sponsored the referendum — is a string of stunning business losses that had no affect on the bonuses paid to the sitting executives.  read more »

To many presidential idolaters, this era will be known as the Age of Obama. But, in reality, we live in what may best be called the Age of Bernanke. Essentially, Obamaism increasingly serves as a front for the big-money interests who benefit from the Federal Reserve's largesse and interest rate policies; progressive rhetoric serves as the beard for royalist results.  read more »

"Privileged people don't march and protest; their world is safe and clean and governed by laws designed to keep them happy...." Michael Brock in John Grisham's The Street Lawyer (Doubleday, 1998).

"There can be nothing happy for the person over whom some fear always looms…” Cicero, Tusculan Disputations 5.62, via Wikipedia.com  read more »

The preferred story for California's economy runs like this:

In the beginning there was prosperity.  It started with gold.  Then, agriculture thrived in California's climate.  Movies and entertainment came along in the early 20th Century.  In the 1930s there was migration from the Dust Bowl.  California became an industrial powerhouse in World War II.  Defense, aerospace, the world's best higher education system, theme parks, entertainment, and tech combined to drive California's post-war expansion.  read more »