In the case of Perelman, it made me want to make the school more Orthodox. Which was not what the school was. … Who am I to come in and say I have the right to own their mission and push them in my direction?… I realized hands-off is better. I can give them scholarship money and do arm’s-length things. .... We have this phenonmenon I call the “Instant Billionaire.” In five or 10 years, a person can go from being a person of above average means, to close to a billionaire... In the past the ultra-wealthy had similar characteristics. There were families that made investments in manufacturing, in transportation, in the infrastructure of this country. … They were partners with the government. They had a strong investment in the status quo.But today the instant billionaires [who have made money in intangible businesses — finance, software, liquid investments] have almost no personal investment, no ailgnment, with the status quo. They’re more like lottery winners. Even if they’ve actually worked quite hard to earn it, they don’t have the same relationship (to American society)... A lot of this kind of wealth can go to very idiosyncratic projects. And not necessarily be good.When you are that wealthy, you can make a platform to drown out everyone else’s voice.There is I think a similarly large issue: the way people are hoarding wealth is starving out the rest of us... But when you have a trading company or a hedge fund, you have a few dozen key employees at most. Your have desks, computers, tech infrastructure. You put money in. You get it back as profits.You don’t have a lot of employees. You don’t share the profits. There’s no one involved other than a few other rich white people. You are pulling money out of the economy... A lot of people blanch at a 90 percent tax rate. But I think, if you make millions of dollars a year, do you think being taxed at 90 percent above that level will affect how you do your work?It would cause you to invest more of your earnings back in. You might take you that money and pay your people more. You might enhance your facilities... As things stand, there’s no disincentive for people in my industry to take every dime as profit. People want maximum leverage. They want to take everything out so they can get whatever luxuries they buy. Or other investments …I know, economic life is not a zero-sum game. But I see the damage done when an industry that’s supposed to be just a service industry, finance, becomes 34 percent of the economy, putting a lot of wealth into a few people’s hands... I tried doing angel investing. Which I was a disaster at. I’m too generous in my valuations. People can snow me easily... It isn’t anything by itself. It’s a virtual machine, that does things. It doesn’t have a lot of customers... I was offering software to grammatically analyze text. I did it in grad school. It was the most useless field, it was never going to amount to anything. But I did it really well... The thing that drove me was, being in a lower-middle-class environment, I wanted better. I was driven. I was frugal. I was hyper-focused on education and reaching higher... I get the most constructive growth when I’ve done something wrong. It’s not usually presented to me in the nicest way. But I get a lot of value from it.Philly isn’t New York. This city hates change. No one likes change. But this city seems much more averse to change than others.
New Head of Soros Fund Has Defied Markets, and Expectations
As chief investment officer for Soros Fund Management,
Dawn Fitzpatrick manages $26 billion. But she
takes over at an unsettled moment for global markets.From the moment Dawn Fitzpatrick stepped onto the American Stock Exchange trading floor as a clerk in 1992, she sensed that the odds were against her. Surrounded by men in jackets barking trade orders, she stood out in her pleated skirt and twin sweater set. Traders around her began wagering over how long Ms. Fitzpatrick, then 22, would last.
“The floor was definitely not a place for people who were cute, prim and proper,” Ms. Fitzpatrick said in a recent interview.
Those who bet against her lost.
.. She rose to lead the firm and become one of Wall Street’s most powerful women.
.. The $1 billion that Mr. Soros made betting against the British pound, for example, helped to support scientists in Russia after the fall of the Soviet Union.
.. a moment of global uncertainty. Impending elections in France and Germany threaten to upset the status quo across Europe. The United States is only beginning to absorb the implications of Donald J. Trump’s young presidency. Markets around the world are holding steady but seem liable to drop on any given day.
.. Ms. Fitzpatrick is bullish. She believes stocks in the United States, having hit record highs, can rise higher still. But she attributes this optimism to what she says are fundamentally healthy companies, not investor giddiness over the Trump presidency. “In reality, if we had Hillary Clinton as our president, I think we’d be here or higher,” Ms. Fitzpatrick said.
.. ‘Dick, your stock is trading at $22. If the stock goes to $15, I’m taking half out, and if the stock reaches $10, I’m taking it all out,’”
These Trump Trades Just Aren’t Working Anymore
Hope has faded that the president can push his policies through
The “Trump trade” has become market shorthand for stocks up, dollar up, bond yields up—and while it has had a rough ride recently, shares remain more than 10% above election day.
.. The basic distinction is between global growth, which was happening anyway and has sped up this year, and a U.S. boom induced by Donald Trump’s promised policies.
U.S. growth.
The idea that the U.S. would power ahead of the rest of the world was reflected in sharp U.S. stock market outperformance, as well as the stronger dollar. No longer. U.S. equity performance since the election is now merely in line with the rest of the world and slightly behind Europe, in constant currency terms, while the dollar’s given back about half its postelection gains.
Bank red tape.
It is hard to split out bank stocks from bond yields, as the two have moved tightly together recently, but an administration packed with former Wall Street executives pledging to slash financial bureaucracy ought to be great for banks. Investors are still giving credence to the idea of a bonfire of regulations, with U.S. bank stocks 12% ahead of the market, about double the outperformance of banks in the eurozone.
Larry Summers: The disturbing way banks are still ducking punishment for driving the financial crisis
The settlements have two components. The first was a fine payable to the government. The second was labeled “consumer relief.” Since consumer relief was added to the fine, I naively assumed it represented payments by banks to consumers or additional relief from obligations for distressed borrowers. In fact, rather than these sums cited by the banks and DOJ, it seems that zero is a better estimate of the cost to banks of providing “consumer relief.”
.. I’d imagine other major banks with mortgage portfolios got consumer relief credit for carrying through on principal reductions that they would have found necessary wholly apart from the DOJ’s intervention.
.. the wrongdoing in question involves lack of financial integrity, clarity and transparency in reporting the settlement should have been a preeminent value. I wish this had been the case.