Reactions to JPMorgan Chase's 'Premier' Employee
by Travis Pantin
Thu, 10 Jan 2008 at 11:41 PM
On Naked Capitalism, blogger Yves Smith called "reprehensible" the decision by a former British prime minister, Tony Blair, to take a paid position at JPMorgan Chase.
"Isn't making speeches for hundreds of thousands of pounds and book deals (bad) enough? Formal private sector jobs, even advisory roles, by top government officials, should be prohibited for at least two years (four would be better). Any shorter timeframe creates conflicts of interests," he wrote.
On Market Movers, finance blogger Felix Salmon responded to Mr. Smith's post, saying: "It's OK for Tony Blair to cash out."
He added: "If JP Morgan wants to pay Blair something north of $1 million a year to schmooze clients and add his lustre to the bank, that's great: I don't think there's much in the way of conflict there. Hell, the bank might even take his advice now and then: Blair certainly knows a lot about the inner workings of UK politics at its highest levels, and that's something that any major bank in London has to be able to navigate."
Comparing Recessions
In a research paper, a University of Maryland economist, Carmen Reinhart, compares the current crisis in the American banking system to other recent crises in advanced economies. There are "stunning qualitative and quantitative parallels across a number of standard financial crisis indicators," she writes.
Ms Reinhart concludes: "The United States looks like the archetypical crisis country, only more so. … The United States should consider itself quite fortunate if its downturn ends up being a relatively short and mild one."
On the RGE Monitor blog, an economist for the Council on Foreign Relations, Brad Setser, writes a review of the report, adding, "I suspect there is a real risk that the European banking system has been doing much the same thing as the US banking system, though on a smaller scale."
Subprime Help on a Local Level
On the Credit Slips blog, a Harvard law professor, Elizabeth Warren, called on her readers to put on their thinking caps and present ideas about what can be done to help the individual communities worst hit by the subprime crisis.
"The feds have the power, if not the will, to make some big changes. But what about mayors? Can anything be done at the city level?" she wrote.
Ms. Warren presented some of her own ideas: "A mayor could appoint a Foreclosure Investigator. Announce that any person anywhere in the city who has received a notice of foreclosure or similar document should immediately call the city officer who will investigate all the paperwork to make certain that every aspect of the mortgage and the mortgage foreclosure comply with the law – at no expense to the homeowner."
On Calculated Risk, an anonymous blogger who goes by the name "Tanta" responded to Ms. Warren's proposal, writing: "I would guess that the loudest and first complaint will be about 'spending taxpayer money' on cleaning up the mortgage mess. That's why I'd be inclined to think that any such Foreclosure Investigator needs to represent the city, not the individual or the lender, and that it needs to be quite explicit whose interests are being protected and why."
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