(CNN) – This is an ode to Greg Smith.
A middling executive at Wall Street’s most powerful firm turned the global business press on its ear by leaving Goldman Sachs with a flourish, publishing an op-ed in the New York Times, calling the culture of the bank “toxic.”
After the piece hit, Goldman Sachs went into damage control and lost $2 billion in market share. But the power of Smith’s departure isn’t that someone from the inner echelon of a secretive institution accuses the firm of (shock!) greed.
(CNN) – What does the U.S. Fed know that we don’t?
That is the question investors have been asking themselves ever since the central bank unveiled its intention to extend its plan to keep interest rates ultra low through late 2014. Why would they need to do that when the recovery seems to be picking up steam, as witnessed in the latest jobs report?
That is exactly what I put to Richmond Federal Reserve President Jeffrey Lacker when I sat down with him in Washington D.C.
“It is not an unconditional pledge. I think that it is clear because everyone recognizes, on the committee and more broadly, if things pick up we can change paths and raise rates before that. Does this mean policy is easier than it otherwise would have been? I am not so sure,” said Lacker.
(CNN) - What does “the 1%” see when viewing news reports on the Wall Street demonstrators camping in the cold to protest wealth disparity? Apparently one rich rapper sees an opportunity to make money.
Rapper and business mogul Shawn Carter, better known as Jay-Z, has debuted a collection of t-shirts on his Rocawear line playing off the Occupy Wall Street movement. The shirts, which are selling for $22.99 and read "Occupy All Streets”, were wiped from the brand's website over the weekend in response to allegations that Carter – whose net worth is estimated at $450 million – was trying to profit from the 99%, but are back up again.
(CNN) – The summer bloodletting from multinational banks isn’t over.
HSBC, a huge employer in Hong Kong and an anchor in a city known as Asia’s financial hub, announced that 3,000 people – roughly 10% of its workforce – will be out of a job by 2013.
The cuts are part of HSBC’s plans to eliminate 30,000 positions worldwide.
HSBC employees won’t be alone hitting the bricks with resumes in hand. This week, the Charlotte Observer – the hometown paper for Bank of America – wrote the largest bank in the U.S. plans to shed between 25,000 and 30,000 jobs.
Last week, Dutch bank ABN Amro said it will cut 2,350 jobs. In Stockholm, Nordea, the largest bank in the Nordic region, plans to cut 2,000 workers. The week before Swiss bank UBS announced 3,500 job cuts.
In "Wall Street: Money Never Sleeps," Oliver Stone's fictitious financier Gordon Gekko famously pronounced "idealism kills every deal."
The pearls of Hollywood wisdom have rarely seemed more pertinent to the current market rout, after the leaders of France and Germany spectacularly failed to shore up confidence in the eurozone this week.
Then came the nail in the coffin: Morgan Stanley warned that the world's dithering politicians had pushed the U.S. and Europe "dangerously close" to a recession.
Two questions emerge: Are the world’s biggest economies heading towards a double dip? And if so, which will succumb first?
In China, the state-run media is full of scathing editorials about America's mounting debt.
Commentary published by the Xinhua news agency over the weekend stated the U.S. should live within its means. The agency said the alarm has rung and Washington politicians need to stop playing chicken.
An article in the Communist Party newspaper Global Times reads "The World Should Kick America's Behind".
The downgrade of U.S. credit by ratings agency Standard and Poor’s from AAA to AA+ is feeding fears in some circles that China could damage the American economy, by selling its massive debt holdings.
New York (CNN) – In just over a week Ben Bernanke and his colleagues at the Federal Reserve will turn off the life support system that has kept the U.S. economy alive for the last two years. How will the markets respond? It’s anyone’s guess.
Optimists, like former White House Advisor Laura Tyson, say the economy - though still fragile - has healed enough to breathe on its own. The Fed has been clear about its intentions to end its program of buying treasury bonds and mortgage-backed securities, the market had time to prepare and the withdrawal of quantitative easing should end without much drama.
But executives at Pimco, the world’s largest bond fund, disagree. CEO Mohammad El-Erian is sticking by the firm’s bearish and controversial call that the end of quantitative easing will spark a sell-off in U.S. treasury bonds. I talked with both Tyson and El-Erian ahead of the Federal Reserve’s June meeting and he gave the following assessment.
He arrived decades ago on Wall Street with long hair and turquoise jewelry. Today, he presides over the world's largest money manager, with assets of more than $3.5 trillion.
BlackRock CEO Larry Fink has emerged in recent years as a pre-eminent force in the post-recession financial world, but maintains a lower profile than many of his contemporaries. In addition to the funds it controls, the company recently helped the Irish government evaluate the strength of its banking system.
"We're involved in some enormous things that can change the course of countries," says Fink, when asked about what he still enjoys about the job after more than 20 years. "Our stress tests in Ireland that we are doing. Our auctions now for Maiden Lane II for the Federal Reserve. These are very important, visible things and we take it very seriously."
His reference to the so-called Maiden Lane fund is certainly topical: BlackRock is currently overseeing the auction of nearly $40 billion worth of sub-prime assets bought by the Fed from AIG as it teetered on the brink of bankruptcy. It puts the firm in the unusual position of having the world's most powerful central bank as a client. How does he keep track of the firm’s many tentacles?
"We are the largest shareholder of corporations worldwide. We have a 5% position in 2,500 companies worldwide. And I don't manage money myself so I can't tell you what we are doing with one specific stock... Did I have any idea we would be of this scale? Not at all. But it is exciting as the leader of this firm watching it grow."
We met Fink at BlackRock's global headquarters in midtown Manhattan. Housed in a non-descript tower, the offices are immaculately maintained and have the discreet aroma of a luxury business hotel. One floor was largely deserted and the trading floor seemed to have an excess of desks and Bloomberg terminals.
Still, it was a busy session, with events moving fast in the Middle East. For Fink, markets need to look past the conflict in Libya.
"The area I am most concerned about is Bahrain. Bahrain is a causeway. On the other side of that bridge are the oilfields of Saudi Arabia. That area of Eastern Saudi Arabia is also where all of the many Shiites are. So the problem you see in Bahrain, which is being funded by Iran, is the most important thing to watch.”
He planned to fly to Saudi Arabia the following week, to learn more about the situation on the ground and offer BlackRock's support to regional clients. During a time of such global instability, the role of a CEO must surely be more vital than ever. Before we left, we asked him what his best and worst management qualities are.
"Intense neuroses. That's positive and negative. I am what I am. You can see me on my sleeve,“ he says brandishing his wrist. There is no evidence of turquoise jewelry, but the enthusiam remains undimmed.
New York (CNN) - The floor of the New York Stock Exchange is one of the most recognizable places in the world. It has appeared in countless movies. A host of international networks broadcast live from the exchange every day.
If you watch our air at all you know that well.The thing you don’t see – there isn’t anyone there anymore. Well hardly anyone. The busy bustling floor that I used to go to back in 2001 with papers flying everywhere and traders shouting orders has morphed into a ghostly, tidy scene with only a scattering of traders, eyes glued to their computer screens.
What happened? Technology.
New York City (CNN) – Twenty-three years ago Oliver Stone introduced us to the notion that greed is good. Or at least that is what his villainous character Gordon Gekko famously told a group of shareholders in “Wall Street.” For the sequel it is “banksters” that Stone shines a bright light on.
“What Gekko was doing in the 1980s became legitimate in the 2000s,” he explains. “The banks became Gekko. The Securities and Exchange Commission did nothing, these buccaneers, these pirates – 'banksters' you could call them - were running rampant, selling junk securities to the world. There is a lack of trust between us and the banking class, we’ll never trust them again.”
Known for his thorough research, Stone and his stars once again immersed themselves in the subject. They spent months talking to Wall Street insiders who explained the complex world of derivatives and credit default swaps. Shia LaBeouf, who stars as the young hero of the movie Jake Moore, even passed his Series 7 exam and is a licensed dealer broker.
Though critical of the actions of banks during the crisis, Stone is not completely anti-Wall Street.
“My father was a stock broker for 50 years,” he says. “ think there is a reason for free markets. Markets do define things, they distribute well. At the end of the day we need some version of Wall Street to work… The system has to be reformed.”
I talked to Stone just hours before the film’s New York premiere and it was clear that two decades after the success of the first Wall Street, he is still passionate about finance. “The 2008 crash was like a triple by-pass to capitalism and everything is in question.”
In our interview he talks about the lust for money, the damage this episode has done, leadership in Washington. But the most interesting part for me was our discussion about Shia LaBeouf’s character Jake Moore and whether it is possible to be truly ethical and rise to the top in business.
You can see what Stone says in the video above - but I want know what you think?
Can good guys rise to the top in finance or do you have to be part shark to swim with them? Can the Gordon Gekko’s of the world truly reform?
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.