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No, Really!

Banks Really Are Different

Jonathan Ernst/Reuters

Still think our dysfunctional financial system hasn’t changed a bit since the day of the cataclysm five years ago? On debt, consolidation, and consumers, Daniel Gross explains why you’re wrong.

Five years ago Monday, I sprinted through Midtown to Bank of America’s headquarters adjacent to Bryant Park to watch Bank of America CEO Kenneth Lewis and Merrill Lynch CEO John Thain announce their hastily arranged merger. Lewis was enormously pleased with himself, basking in the attention from the New York media. I chased a tight-lipped Thain as he scurried through the lobby to get back to his headquarters. I then spent the remainder of the week working on the slightly infamous King Henry cover story on Treasury Secretary Paulson for Newsweek.

PILE ON

JPMorgan Fined Over $700 Million

Due to 'London Whale.'

Talk about sounding like a broken record. Just a few weeks after reports detailing the billions in potential legal troubles facing JPMorgan Chase, now news is breaking that regulators in the U.S. and U.K. are fining the bank more than $700 million because of its trading loss in London last year. Once heralded as one of the few unsullied megabanks, now JPMorgan barely goes a week without more legal woes. The bank's board meets Monday and Tuesday to vote on whether or not to approve the fine.

Read it at the New York Times

Tree Huggers

American Cars Seeing Green

Stan Honda/AFP/Getty

U.S. auto dealers had a huge August. They also may have saved a few polar bears.

Last month American car companies had their best August since 2007. That’s good news for their balance sheets. It’s also good news for the environment.According to data compiled by Michael Sivak and Brandon Schoettle of the University of Michigan Transportation Research Institute, the average sales-weighted fuel-economy rating (using the EPA fuel-economy guide) increased to 24.9 miles per gallon in August from 24.8 mpg in July. They calculate the rating by tallying the numbers of cars sold in the month by model and creating a blended average.

CASH MONEY

The Richest People in America

Forbes magazine releases its annual list.

We’re No. 1! The economy may be in a slow-motion recovery, but in terms of the richest person in the world, America is back on top. Bill Gates, with a net worth of $72 billion, has reclaimed the top spot globally from Mexico’s Carlos Slim. Warren Buffett also passed Slim, as 2012 was a banner year for the Oracle of Omaha—he added $12.5 billion. The biggest loser? According to Forbes, that would be outspoken investor T. Boone Pickens who is no longer a billionaire after losing big time on wind energy bets. And for those with a conscience, the total net worth of the 400 wealthiest Americans is $2.02 trillion, which is over twice what it was a decade ago. Most American families can’t say that.

Read it at Forbes

NEXT UP

Janet Yellen Seen as Fed Frontrunner

After Larry Summers withdraws.

In a dramatic move, Larry Summers, the controversial former Treasury secretary and president of Harvard University, withdrew from consideration as the next head of the Federal Reserve. Now that Summers’s unfathomable frontrunner status is no longer, current Federal Reserve vice chair Janet Yellen is seen as gaining the most from the move. Yellen, regarded as more favorable toward expansive monetary policy, also seems to have Wall Street at her back. When news of the Summers withdrawal broke, U.S. stock futures soared, in large part because it was thought he would curtail monetary stimulus by the central bank. Summers withdrew when it became obvious he would face a contentious confirmation battle.

Read it at the Huffington Post

New New Left

The Left Killed Summers

Mark Wilson/Getty

Larry Summers has dropped out of the race for chairman of the Federal Reserve. He was President Obama’s choice, but Peter Beinart says he’s a victim of the new Democratic left.

Still not convinced that the Democratic Party’s becoming more anti–Wall Street? Over the last few days, in response to my essay on the new new left, some commentators have suggested that I made too much of Bill de Blasio’s success in the New York mayoral primary. After all, New York Democrats are more liberal than Democrats nationally. De Blasio faced a weak field. And he may still face problems in the general election.OK, then. Let’s try this peg instead: Larry Summers has just dropped out of the race for chairman of the Federal Reserve.

Giganticism

The Big City Squeeze

Mario Tama/Getty

Mayors, planners, architects, and developers argue that when it comes to cities, bigger is better, and taller and denser are best of all. Only one problem: most of the people who live in those cities don’t agree. By Joel Kotkin.

The Revolt Against GigantismPeople care deeply about where they live. If you ever doubt that, remember this: they staged massive protests over a park in Istanbul. Gezi Park near Taksim Square is one of that ancient city’s most beloved spots. So in June, when Prime Minister Recep Tayyip Erdogan threatened to demolish the park to make room for his grandiose vision of the city as “the financial center of the world,” the park’s neighbors and supporters took to the streets.

Shady Business

Russian Fraud and the City

Getty

Pussy Riot goes to prison while a gang accused of murder and mugging in Mother Russia gets luxury apartments in lower Manhattan. One federal prosecutor is calling Putin out.

Even as the United States and Russia were nearing an agreement over Syria’s chemical weapons, a federal prosecutor was filing papers that effectively accuse the Putin regime of tolerating, if not abetting, an organized gang of government officials and criminals who looted $250 million from the Russian treasury.The immediate intent of the official complaint filed by U.S. Attorney Preet Bharara on September 10 was to seize several high-end Manhattan properties.

He’s Out

The Summers Whodunit

Getty

Who killed Larry Summers’s shot at running the Fed? Daniel Gross narrows down the list of suspects, from Elizabeth Warren and Wall Street to the brilliant economist himself.

On Sunday night, Larry Summers—brilliant economist, former Harvard president, former Treasury secretary—withdrew his name from consideration for the post that would top off one of the Western world’s great résumés: chairman of the Federal Reserve Board.Superficially, it’s obvious who—or what—killed the Summers nomination: the candidate himself took his name out of consideration. But at second blush, this situation is a little like an Agatha Christie mystery.

Golden Era

There Goes the Deficit

Carolyn Kaster/AP

A funny thing happened on the way to the debt-ceiling battle: a big chunk of our annual budget quietly melted away. Daniel Gross on the good news you didn’t see coming.

Here we go again. The debt ceiling is approaching, and Washington is in the grips of another round of mania. Will the Republicans in the House engineer a default, or a near-default, on America’s sovereign obligations? Will President Obama agree to delay the implementation of the Affordable Care Act in exchange for a debt-ceiling increase? Will Obama and House Majority Leader John Boehner finally be able to engineer a grand bargain on taxes, spending, and deficit reduction? (The New York Times reports this morning that Boehner is appealing to Democratic White House leaders and the White House for help.

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Shame on You, Walmart!

With an Ohio Walmart hosting a holiday food drive for its own workers, The Daily Beast's Michael Tomasky criticizes the notoriously stingy company for not paying them more.

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