ITEM FOR WOMEN BANKERS - DEBRA'S CASE

The voluptine Debrahlee Lorenzana claims that her ex-employers in the Chrysler Building forbade her "to wear sexy garments or high heels because they distract" her male colleagues. “I can not help it that I’m curvacious,” she told reporters for NY Daily News, which just loved the story.
“And I am not about to go overeat to gain fifty to one hundred pounds simply because my employer wants me to be like everyone else.” The media have classed her as a babe that was too hot for Citigroup to handle.The story is no sillier than a lot that goes on in celebrity magazines. The 33-year-old "eye-candy from Queens" filed suit in Manhattan Supreme Court. She alleged she was directed to refrain from turtlenecks, pencil skirts and tailored suits because clingy garments attracted excessive attention on the job. The presumption seems to be that Citicorp managers considered productivity suffered, hurting someone's bottom line - the inverse of what 'sexiness' is more often assumed to deliver positively to productivity? If sexiness is economically damaging by being distracting, or only in banking, there is a lot to be questioned about office work or in a bank branch.
Her attorney, Jack Tuckner said, “Debrahlee Lorenzana might possibly be very appealing in anything she wears.” Tuckner works for Tuckner Sipser Weinstock & Sipser and clearly find Debra's deportment productive in his firm, as does whoever she now works for.Feminism continues to debate the physical objectification of sexiness figurined as female. Post-modern post-feminism has no problem with that, but that's like saying bankers have no problem making money from asset bubbles. Bankers (not just the men) anyway are not feminist or even post-feminist, not an issue in a money-culture. Banks have a well populated history of losing 'constructive dismissal' suits as their kneejerk response to internal complaints of gender-bias and sexism etc. Citigroup, was the employer of a Debra, a Latino terminated for being unwilling to dress down in mid-town New York. A tearful Debrahlee Lorenzana read a prepared statement explaining why she is a victim of sex discrimination and asking for a human rights investigation. She claims she was fired as a business banker at Citibank after complaining that male colleagues called her good looks distracting. What males complain about that?
She says something that is certainly not post-modern or post-feminist, that being beautiful is a curse for her and always has been, because people attribute her achievements to her looks, so she's had to work twice as hard to get ahead, which is not an argument that I can follow. She says she can't win though hopes to by suing Citibank for firing her for being too sexy. Citibank certainly is accused of questionable actions — male managers pulling her aside and giving her a list of prohibited clothes and firing her for being late on dates that checked out to be weekends. She is not helping the case by her idea that she's just too beautiful - although I can think of some ugly male bankers who got to the top like Dick Fuld, generally prettiness gets there too - but other than in sales and PR it is not a major factor surely?
In letter she wrote to Citibank's HR department she said, "Other female employees were able to wear such clothing because they were short, overweight, and they didn't draw much attention, but since I was five-foot-six, 125 pounds, with a figure, it wasn't 'appropriate'. . . . Are you saying that just because I look this way genetically, that this should be a curse for me." Apparently she's five-foot-eight according so some press coverage, but otherwise she could be telling the exact truth here, except the genetically bit has been augmented as proven by a video found by the voracious press in which when a single-Mom insurance agent she went to get a DD to become two boobs on a stick in her words, like Pamela Anderson and to find her own Ben Affleck, an how plastic surgery is the "best thing ever" and commonplace nonsense like that? At JP Morgan Chase the rumour is that she'll be sacked there too this time for talking too much to the press! Her lawyer says if JPM&C sack her they'll sue that bank also. Her new boss has tried to get Debra to cancel television interviews.In the complaint against Citigroup, Debra claims that she was not properly trained and that she was "a target" to her colleagues. That is interesting - lack of formal training. She says she was a victim of sex discrimination and then retaliation for speaking up.I wonder what she can possibly imagine getting compensation, not even distress since she appears to relish the publicity and does not appear to have suffered significant loss of earnings, except of course legal fees. The fed-up femme fatale made a formal complaint to Citigroup's HR in May last year, and asked for a transfer, which she got in July. But at the new branch she was chided for failing to recruit new customers and was dismissed in August last year.
When the case came to court her gender-discrimination suit was dismissed because her contract with Citibank called for any disputes to be settled in private arbitration.
Ms Lorenzana, who wore a sleeveless black dress, during the televised interview, repeated her claims that Citibank allegedly canned her for wearing sexy outfits at work.

READ MY LIPS

USA HOUSEHOLD WEALTH AND DEBT

In 2000, USA household wealth was $44 trillion and rose to $65 trillions in 2007 or equal to 108% of world GDP or twice the value of world trade or 4 times the world's energy consumption by $ value. It fell by $18 trillions and has recovered $5 trillions, though debt has fallen little. Household debt was 20% of USA household wealth in total and then rose to 28% before improving to 24%. But that's only the average. A fifth of the population or of households are too poor to have bank debts. Half the population had net wealth and now don't. Som will be dwelling on a 'lost decade' if they only think in money terms? They're the so-called middle class that both parties remain desperate to help and woo for votes. The Democrats also want to do something for the poor at least in health care insurance reform.
The USA has about one third of world wealth and a similar proportion of world output. Roughly 10% of the population own 70% of US wealth, top 1% own 40%. The bottom 40% owned less than 1% of the nation's wealth, half of whom own nothing valuable!
When it comes to debt that is not distributed in the same proportions as wealth, but will be concentrated in the middle of the US household population. Do not assume that income tax is exactly proportionate to wealth distribution either. The top richest 1% pay 33% of federal income tax; the next 9% pay another third; the next 15% pay 22% of the income taxes; and the next 25% pay 33% of income tax. The next 10% pay 3% and the last 40% pay no income tax, but a lot of sales tax and local taxes for which they get something in return, maybe most of it somehow, let's hope so. The US has a progressive tax structure which taxes less for smaller incomes. But the US does not directly tax wealth except the estate tax (what in UK is called death duties and inheritance tax).
A quarter of households retain net wealth and are rich of which the top fifth (5% of all households) had under 10% loss. The top 1% may feel that in real terms or at least relative to everyone else they are in serious profit gains from buying distressed assets at discounts that will do well for them and their heirs in the future?

COUNTRIES OF THE WORLD BY GOVERNMENT BORROWING RATIOS TO GDP

BANKS OF THE WORLD BY CUSTOMER LENDING

CONTRACTS FOR DIFFERENCE? SOLD SHORT?

CBOT Floor - Credit default Swaps (CDS) and Contracts for Differences (CFDs), similer to put options, are major tools of 'short-selling' generally (which depends on stock lending), are employed on a large-scale by hedge funds, but also by medium to small brokers, and by individuals speculators, and were at the heart of the relentless fall in bank shares especially in the two years after June 2007 when the bottom fell out of the markets followed by the credit bottoms falling out their trousered-economies.
CFDs are a leveraged way of participating in short-selling to profit from loss of market price in stocks, and as importantly, a way to profit from how short-sellers can cause stocks to fall in price! Many small sell-orders can drag a price down far more effectively than one much bigger sell-order. The blame for the credit crunch (that triggered an Anglo-Saxon recession by pricking the asset bubbles of credit-boom economies) is a long list that includes:
Sub-prime, self-certified, and buy-to-let mortgages sold to over-indebted borrowers;
Bugs in models of credit ratings agency that caused the models to be indifferent to defaults data and rate many Asset Backed Securities (ABS) far too highly;
Asset price weakness of Collateralized Debt Obligations (CDOs, also called ABS) when the bonds were offered into secondary markets that proved to be illiquid;
Credit Default Swaps (CDS) insurance-style derivatives on CDOs, and their further derivatives calls CDS Squared (CDSS);
Banks' inadequate levels of capital reserves, and their large 'funding gaps', which are banks' borrowings needed to fill the gaps between customer deposits and loans;
General accusations of weak regulation in an era of too-cheap money (low central bank discount rates);
Credit-boom economic growth policies in USA, UK and some other OECD countries such as Spain, Ireland, Greece, that also caused extreme imbalances in world trade;
Investor exuberance and blinkered risk-taking as property prices outpaced every other route to getting richer;
Extreme bias in bank lending in credit boom economies towards mortgages, property and consumer credit.
I could add other factors. But, surprisingly short selling, stock lending and CFDs have been treated as a tertiary symptom rather than also a major problem? A temporary ban was implemented on 'naked' short selling. This had limited effect because the rules totally misunderstood how short selling works to drag down stock prices. Note that short-selling and the equivalent of CFDs have been available for a century as a speculative way to profit iCFD short-selling, for example, was the lubricant for the German currency crash and hyper-inflation of 1923, and continued to be used in subsequent currency crises round the world - and in some minds especially in 1993 attack on sterling forcing it out of the EMS, called Black Wednesday. Shorting interest rates is well established.We see this again today in a sequence of sovereign debt crises and currency attacks. Traders are using every bit of political-economic news to perturb the markets, and sovereign debt is the current game of choice - why, because it can appear to the simple-minded to cover everything else in a national currency economy, which of course it does not really do so. Market regulators excuse call & put options, CFDs, in money market, bond and equities short selling as mostly legitimate risk hedging and also brokers need to maintain market liquidity by borrowing stock to sell when they are short of the stock, and so on. Hedge Funds and others have made $ billions of gains from asset price losses of longer term investors - one argument is that at least much of the value lost has been encashed and lost absolutely? The question is whether this is a source of sever systematic instability that should be checked. In defence of this lucrative activity, described by some as 'shooting turkeys in a barrel', various studies have been commissioned and published to show that profiting on the downside of markets is good, balancing, has little negative impact on prices, and is simply necessary! But, in crises when markets are volatile or obviously sliding, and when markets are nervous, easily moved by rumours and titbits of negative news, and when short term profit-takers out-weigh long term investors, then it becomes absurd to defend short selling or to assume that it is price-neutral or market-neutral!
At last there is some more determined action. A growing European consensus on the need for tougher regulation of CDS trading was reflected by Lord Turner, chairman of the UK FSA, who warned that naked trading in corporate CDSs could force companies into default. FSA has also said it is investigating stock lending - especially to identify where stock-owners have not been advised that there stock may be loaned out - to garner a fee for custodians - when the liklihood is that the stock will be returned worth less, like letting a hotel room to a rock band and getting it back trashed. A first-order problem is getting data on what's been going on for years and what is happening now?
Regulators in the US, Hong Kong and EU have outlined new reporting measures on short selling of equities while at same time trying to preserving liquidity benefits generated at the margin by short selling i.e. they seek to constrain the short term speculation. Europe and HK want more timely disclosure of short selling activity, America’s SEC is backing a rule that is resisted by traders who say it will detract from liquidity. The new rule seeks to block short selling if a stock falls at least 10% in one day. How that can practically operate is unclear. A Franco-German initiative, backed by Luxembourg and Greece, calls for regulators to be given “unlimited access” to a register of derivatives trading in order to identify who is trading and what they are doing. It proposes that derivatives transactions should only be allowed on exchanges, electronic platforms and through centralised clearing houses. Credit Default Swaps (CDSs) and CFDs are commonly used by banks and hedge funds to reduce their risk, but they are also popular with investors who buy and sell them with an eye to quick profit. Naked CDS and CFDs drove down Greek bonds this year and banks and financial companies last year, and the year before.
Lord Turner, who is also a member of the Financial Stability Board, which works on G20 global regulatory proposals. He wants regulators to look at the question of naked CDSs on both corporate and sovereign debt. “We need to think about whether we are being radical enough on credit default swaps . . . as to whether naked CDSs should be allowedd.” He is concerned that corporate CDSs can be easily manipulated to force a company into default, a form of market abuse. As before, however, hasty action is not advised! “We need to look at these issues very carefully. There is a danger of an oversimplistic belief that everything going on is shorting in the CDS market.”
Mario Draghi, chairman of the FSB, signalled this week that the group is focused on the issue. “This way of betting has systemic implications.The sense I have is that governments are increasingly uneasy with this. Whenever something has systemic implications, you can bet it is going to get systemic regulation.”

Bankers Without a Clue by Paul Krugman

NOT TOO BIG TO FAIL BUT TOO BIG TO FEEL!
First McDowell's comment: Bankers are not trained well and not trained in economics or history it seems - at least not the topmost bankers in charge of the biggest banks - this seems to be the impression that Paul Krugman gained from USA's Financial Crisis Inquiry Commission - it echoes similar impressions from the UK's House of Commons Finance Select Committee hearings. Read on. This cartoon, which I've added in here seems to say it all. NY Times: Published: January 14, 2010
The official Financial Crisis Inquiry Commission — the group that aims to hold a modern version of the Pecora hearings of the 1930s, whose investigations set the stage for New Deal bank regulation — began taking testimony on Wednesday. In its first panel, the commission grilled four major financial-industry honchos. What did we learn?
Well, if you were hoping for a Perry Mason moment — a scene in which the witness blurts out: “Yes! I admit it! I did it! And I’m glad!” — the hearing was disappointing. What you got, instead, was witnesses blurting out: “Yes! I admit it! I’m clueless!”
O.K., not in so many words. But the bankers’ testimony showed a stunning failure, even now, to grasp the nature and extent of the current crisis. And that’s important: It tells us that as Congress and the administration try to reform the financial system, they should ignore advice coming from the supposed wise men of Wall Street, who have no wisdom to offer.
Consider what has happened so far: The U.S. economy is still grappling with the consequences of the worst financial crisis since the Great Depression; trillions of dollars of potential income have been lost; the lives of millions have been damaged, in some cases irreparably, by mass unemployment; millions more have seen their savings wiped out; hundreds of thousands, perhaps millions, will lose essential health care because of the combination of job losses and draconian cutbacks by cash-strapped state governments.
And this disaster was entirely self-inflicted. This isn’t like the stagflation of the 1970s, which had a lot to do with soaring oil prices, which were, in turn, the result of political instability in the Middle East. This time we’re in trouble entirely thanks to the dysfunctional nature of our own financial system. Everyone understands this — everyone, it seems, except the financiers themselves.
There were two moments in Wednesday’s hearing that stood out. One was when Jamie Dimon of JPMorgan Chase declared that a financial crisis is something that “happens every five to seven years. We shouldn’t be surprised.” In short, stuff happens, and that’s just part of life.
But the truth is that the United States managed to avoid major financial crises for half a century after the Pecora hearings were held and Congress enacted major banking reforms. It was only after we forgot those lessons, and dismantled effective regulation, that our financial system went back to being dangerously unstable.
As an aside, it was also startling to hear Mr. Dimon admit that his bank never even considered the possibility of a large decline in home prices, despite widespread warnings that we were in the midst of a monstrous housing bubble.
Still, Mr. Dimon’s cluelessness paled beside that of Goldman Sachs’s Lloyd Blankfein, who compared the financial crisis to a hurricane nobody could have predicted. Phil Angelides, the commission’s chairman, was not amused: The financial crisis, he declared, wasn’t an act of God; it resulted from “acts of men and women.”
Was Mr. Blankfein just inarticulate? No. He used the same metaphor in his prepared testimony in which he urged Congress not to push too hard for financial reform: “We should resist a response ... that is solely designed around protecting us from the 100-year storm.” So this giant financial crisis was just a rare accident, a freak of nature, and we shouldn’t overreact.
But there was nothing accidental about the crisis. From the late 1970s on, the American financial system, freed by deregulation and a political climate in which greed was presumed to be good, spun ever further out of control. There were ever-greater rewards — bonuses beyond the dreams of avarice — for bankers who could generate big short-term profits. And the way to raise those profits was to pile up ever more debt, both by pushing loans on the public and by taking on ever-higher leverage within the financial industry.
Sooner or later, this runaway system was bound to crash. And if we don’t make fundamental changes, it will happen all over again.
Do the bankers really not understand what happened, or are they just talking their self-interest? No matter. As I said, the important thing looking forward is to stop listening to financiers about financial reform.
Wall Street executives will tell you that the financial-reform bill the House passed last month would cripple the economy with overregulation (it’s actually quite mild). They’ll insist that the tax on bank debt just proposed by the Obama administration is a crude concession to foolish populism. They’ll warn that action to tax or otherwise rein in financial-industry compensation is destructive and unjustified.
But what do they know? The answer, as far as I can tell, is: not much.