by Kyle Colona on May 2, 2012
Yesterday was May Day, which Occupy Wall Street commemorated with no work, no school and no shopping. No shopping? How did they buy the rain gear and needed libations to make it through another soggy day in New York, or a foggy day in London town, had me low and it had me down.
But they hoped to join what Bloomberg News is reporting to be “scores of labor organizations observing May 1, traditionally recognized as International Workers’ Day.”
The OWS movement have decried “economic disparity…high foreclosure and unemployment rates that hurt average Americans.” Here in New York the group has relied on demonstrations and marches around the city since last November.
“If the banks anticipate outrage from everyday citizens, it’s revealing of their own guilt,” said Shane Patrick, a member of the Occupy Wall Street press team. And therein lies the myth of the OWS gang: “everyday citizens.”
Of course, those of us lucky enough to have jobs marked the day by working. Isn’t that ironic?
BofA to Cut Elite Fat
Bank of America announced another round of job cuts Monday. The big bank plans to whack about 2,000 in its investment banking, commercial banking and non-U.S. wealth-management units; operations that mushroomed with BofA’s 2009 purchase of Merrill Lynch & Co.
The cuts are in addition to the fat trimming announced last year of 30,000(!) jobs over three years in its consumer banking divisions. The move is the latest salvo by CEO Brian Moynihan to rein in expenses in light of continued “sluggish U.S. growth and revenue-reducing federal regulations,” according to the Wall Street Journal.
Bofa is said to be grappling with a “wave of high-profile defections in its institutional businesses, such as investment banking.” Meanwhile, investors are pressuring banks to tamp down expenses without sacrificing a competitive edge.
But grappling with waves may not be a bad thing; after all this is the 50th anniversary of California rock-n-roll legends, The Beach Boys.
Krugman Says Fed Is ‘Reckless’
Princeton University economist and syndicated columnist Paul Krugman “suggested” Fed Policy butchers, bakers and candlestick makers led by “Helicopter” Ben Bernanke are “reckless” for not pursuing a higher inflation rate.
Krugman told Bloomberg TV that “we have had a massive failure of our political system that has come to accept that 8 percent unemployment is the new normal and there is nothing that can be done.”
In Krugman’s Keynesian world, a higher inflation rate could lower joblessness. Of course, it is widely known that small businesses are the engine of economic growth and account for about 60% of J.O.B.S in the U.S.
The ironic thing here is that Fed head honcho was once the chairman of Princeton’s economics department. In 2000, he hired Krugman to teach economics. Bloomberg News notes that this great debate was started by Krugman’s April 24 article in the New York Times Magazine.
He argued that a more rapid increase in consumer prices would align with Bernanke’s comment in 2000 that the Bank of Japan should “pursue faster inflation to escape deflation.” Bernanke responded to Krugman’s criticism in a press conference last week. He said in part that the views he expressed about 15 years ago are “completely consistent with the views that I held at that time.”
But boys will be boys or something like that.
Groupon Reshuffles Board after Accounting Missteps
Groupon is said to be adding some “financial muscle” to its board of directors after a string of accounting missteps and other gaffes by CEO Eric Lefkofsky.
DealBook is reporting that the Internet coupon hawker announced the addition of two new board members, Daniel Henry, CFO of American Express, and Robert Bass, the departing vice chairman of Deloitte.
“With their deep financial, accounting and operational experience, Dan and Bob will provide invaluable expertise to the Board going forward,” Lefkofsky, said in a statement.
Groupon has been troubled by “multiple issues” including faulty financial reporting that were picked up by the SEC. Lefkosky and company were forced to revise the financial results for the fourth quarter, increasing its losses for the period to $64.9 million from $42.3 million. In so doing the company acknowledged that it did not “set aside sufficient capital to cover consumer returns.”
Perhaps they should have used those coupons to off-set the losses?
Hong Kong Exchange Shows Interest in London Metal Exchange
Now that the brouhaha over the failed merger play between Frankfurt-based Deutsche-Boerse and the NYSE has died down, exchange merger plays may be the in thing again.
DealBook is reporting that Hong Kong Exchanges (HKE) and Clearing acknowledged that it is contemplating a London Metal Exchange (LME).
HKE said it was throwing its hat in the ring and joining The Big Board and Intercontinental Exchange (ICE) in the courting of LME. The 135-year-old London Metal Exchange has said a small number of suitors have until May 7 to submit second-round bids.
Isn’t it romantic?
Kyle Colona is a New York based freelance writer and a Feature Writer for the Compliance Exchange and Wall Street Job Report. He has an extensive background in legal and regulatory affairs in the financial services sector and his work has appeared in a variety of print and on-line publications.