Musings -- May 15, 2016

Yesterday my wife happened to make a comment about the oil industry and in my reply, a monologue she most likely found boring, inaccurate, and irrelevant, I happened to mention Dodd-Frank. In this week's issue of The New Yorker, there is a one-piece op-ed on the Obama reform law. I was surprised how accurate I actually got some of the facts. Some data points from the article:

• Dodd-Frank: the centerpiece of Obama's reform effort
• it will likely be changed regardless of who the next president is
• for some, it did not go far enough; for others, it went too far
• everyone agrees: following Dodd-Frank, banks have performed dismally; their 1Q16 earnings suggest this year will be another rough year for banks
• returns on bank equity have fallen
• bonuses and salaries are being slashed
• GS cut the amount it set aside for compensation by 40%
• payroll is down
• banks have eliminated tens of thousands of jobs; banks are now embarking on a new round of sever job cuts
• most agree: regulators have simply made banking less profitable than it once was
• big banks now have to carry almost twice as much capital as they did before the financial crisis
• new Fed rules will require them to set aside another $200 billion on top of that
• the capital carrying costs have resulted in big banks getting smaller
• Citigroup: shed $700 billion in assets in past 7 years
• GS: shed a quarter of its assets
• Morgan Stanley: shed a quarter of its assets
• JP Morgan: cut assets last year to avoid a capital surcharge
• GE: effectively got out of the financial business altogether by selling off most of its GE Capital

The writer suggests that this is all good for the US.

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Downgraded

Moody's downgraded. Who would have thought?

• Saudi Arabia
• Bahrain
• Oman

Unchanged for Kuwait and Qatar.

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The Income Inequality Page

"We" Are Paid Based On How Society Values "Us"

In dollars.

• Top tier athletes: 8-figure
• CEOs of Fortune 500 companies: 7-figure
• US presidents: mid-6-figure
• physicians: low- to mid-6 figure
• retired US presidents: low-6-figure
• pilots of large-body commercial aircraft: low-6-figure
• many Americans: high 5-figure
• many blue-collar Americans: mid-5-figure salaries
• at $15/hour, 40-hours / week, Walmart's entry level worker: low 5-figure ($30,000)
• spouses of retired US presidents: $20,000

Considering that all spouses of retired US presidents have been female, it seems a case could be made for sexual discrimination. It is shameful that advocates for women like Hillary and Pocohontas have not changed this. The president himself could change this easily with an executive order, restructuring the payout but not increasing the total presidential/spousal retirement pay package.

Even spouses of 30-year military retirees are better protected in retirement than retired spouses of presidents. 

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Apparel Retailers

Who would have thought?

#1: Walmart
#2: Amazon

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War Legacy

Who would have thought?

From The New York Times, President Obama will be the first US president to have waged war the entire eight years of his two term presidency. And doesn't have much to show for it. The JV team scored again over the weekend in Yemen and Iraq.

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Turkey's Slide In (Muslim) Authoritarianism

This is an international story that will probably end up being a big story yet within my lifetime. If one googles the subject, one will see any number of articles on this story in major news outlets including the Boston Globe (today) and The New York Times November, 2015. 

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