While You Were Working - April 25
A day that will live on in infamy …
… at least for those clamoring for corporate governance reform. Despite its inability to prevent a fake account scandal that seemingly won’t end, the entire board of directors of Wells Fargo was re-elected.
Want to know how to measure the size of a bank? Ask a big one.
Deutsche Bank weighed in on the too-big-to-fail/systemically important financial institution debate with some research of its own on how the size of a bank can/should be measured. DB weighs the pros and cons of various measures, including market capitalization, total assets, revenues, equity capital and risk-weighted assets. They conclude:
“All of this shows how important it is not to rely solely on a single measure to measure bank size. In most cases, a broader picture is needed. However, if only one indicator is to be used, it should be the most comprehensive, comparable and robust one available: revenues.”
Good to know.
The NY Fed and Vikram Pandit agree on one thing
This research paper from the staff at the New York Federal Reserve delves into the troublesome world of student loans to compare the outcomes of those who attend for-profit colleges to those who attend public colleges and universities. The findings are pretty clear:
“Students who attend for-profit institutions take on more educational debt, have worse labor market outcomes, and are more likely to default than students attending similarly selective public schools.”
Despite all the data in the world, little is expected to be done from a public policy perspective to curb the lending machine that is powering the rise of for-profit schools and the credit score destruction they leave in their wake.
However, at least the private sector is catching on to the for-profit college game of three-card monte. CommonBond, the student-loan venture backed by former Citigroup Inc. boss Vikram Pandit, is expanding its operations to include undergraduate lending. Notably, CommonBond plans to exclude students who attend for-profit colleges and online universities.
Actions speak louder than words
On the same day Citigroup boss Michael Corbat quelled raucous shareholders by lamenting the fact that the firm “had not given enough early consideration to the concerns of the indigenous people” when it decided to be a lead bank in the Dakota Access Pipeline, the bank announced with presumed glee it had received permission from Saudi Arabia to resume investment banking activities it had halted 13 years ago. Hmmm…
- The Nasdaq topped 6000 for the first time. I hope they made hats.
- People think Mario Draghi’s monetary policies might be starting to quell populism. Call me skeptical.
- It’s not like David Einhorn has a track record for calling bubbles or anything.
- Sorry “This is Kush”… it looks like Jeb Bush and Derek Jeter bought the Miami Marlins.