In the US, a bill called the Swaps Regulatory Improvement Act recently sailed through the House Financial Services Committee. But then The New York Times went through emails from a lobbyist to the congressmen who wrote it. And surprise, surprise, the newspaper found that the legislation, which chips away at the Dodd-Frank Act which took aim at culprits of the financial crisis like lax mortgage lending and the $700 trillion derivatives market, had one unofficial author: the investment bank Citigroup.
The bill seeks to exempt trades from new regulation. According to the New York Times, Citigroup's recommendations were reflected in more than 70 lines of the House committee's 85-line bill. Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word.
Erika Eichelberger at Mother Jones obtained the Citigroup draft. She says it is practically identical to the House bill. And, she says, there's a history of the banks writing America's corporation laws. "This is certainly not the first time that the financial industry has shaped financial reform laws for Congress. Citigroup was a central player in the 1999 repeal of the Depression-era law called the Glass-Steagall Act that forced banks not to engage in investment activities. Its lobbyists flooded Capitol Hill for that fight."
And of course, repealing the Glass-Steagall Act led to the global financial crisis.
The banks haven't learned their lesson. Neither, for that matter, have American law-makers.
So News Corp's directors have formally split the company into two distinct and publicly traded media conglomerates. One company, 21st Century Fox, will be comprised of its television and film holdings, while the other, christened the new News Corp., will consist of its publishing and education assets. The publishing division is worth a fraction of what the studio side is valued at, which is not surprising. It's not making anywhere near enough money to survive on its own.The split means that loss-making newspapers will no longer be cushioned by the company's more profitable entertainment interests and could lead to more cuts in the publishing companies. Under the separation, shareholders will receive a ratio of one share of the new News Corp. for every four shares of the old News Corporation.
But as part of the process, Rupert Murdoch has tightened his grip on the company. As The Guardian tells us, the board has established a "poison pill" mechanism to thwart any hostile takeover bid once the entities are separated. The provisions will allow existing shareholders to buy stock at a 50 per cent discount if any new investor should acquire 15 per cent of the company. News Corp said in a statement: "The rights agreements are intended to protect the stockholders of the company and the new News Corporation from efforts to obtain control of such companies that their respective boards of directors determine are not in the best interests of the companies and their respective stockholders."
And as expected, Murdoch has also shored up his own finances. He's made sure he's getting a 15 per cent pay rise to $28.3 million
The CEO of Goldman Sachs has confirmed that his firm cleaned up big in the financial crisis. While the crisis destroyed businesses and put millions out of work, Goldman Sachs was making millions. In an interview with Bloomberg Television , Blankfein said the bank was going to use the crisis as an opportunity to grow.
This is the bank that made millions shorting the mortgage market while still selling the securities to its clients. Goldman faced public outrage in the aftermath of the 2008 financial crisis over accusations, including a US Securities and Exchange Commission lawsuit, that it had treated clients improperly. Blankfein and other executives also faced intense grilling on Capitol Hill, which deeply embarrassed its CEO. The firm settled that suit by agreeing to pay $550 million, and said it made a mistake in omitting disclosures to investors in the product. Matt Taibbi in Rolling Stone likened Goldman Sachs to "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
Goldman Sachs might have made a fortune out of the misery created by the financial crisis but its reputation still hasn't recovered. As Bloomberg reports, the firm has now linked bonuses and promotions to employees' success in protecting the firm's reputation.
The latest Blankfein interview is not going to help.