Explaining Southern California's economy

Annals of the 1 percent: The agony of the bankers

Dow Jones Industrial Average Closes Slightly Down

Spencer Platt/Getty Images

Traders making money at the New York Stock Exchange. Just maybe not as much money as they used to.

Max Abelson (via Paul Krugman) writes at Bloomberg about bankers and their struggles to live on half a million a year, in the face of government regulations and more work than ever:

Michael Karp, 42, CEO of New York-based recruitment firm Options Group Inc., said Wall Street pay will fall 30 percent this year, and more for executives. It will be flat or down even in businesses doing relatively well, such as emerging markets and commodities, he said.

[...]

Karp said he met last month over tea at the Gramercy Park Hotel in New York with a trader who made $500,000 last year at one of the six largest U.S. banks.

The trader, a 27-year-old Ivy League graduate, complained that he has worked harder this year and will be paid less. The headhunter told him to stay put and collect his bonus.

“This is very demoralizing to people,” Karp said. “Especially young guys who have gone to college and wanted to come onto the Street, having dreams of becoming millionaires.”

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Bike fans flex their muscle against General Motors

cicLAvia

Eric Richardson/KPCC

Cyclists ride through the street at CicLAvia in downtown L.A. October 9, 2011.

So it's bikers 1, General Motors 0, after the giant automaker was compelled to pull a bike-unfriendly ad following biker outcry. This is from the LA Times:

General Motors Co. is killing an advertisement aimed at college students after receiving complaints that it makes fun of people who use bicycles for transportation.

That ad has a headline stating, “reality sucks” and depicts a nerdy looking guy wearing a helmet and riding a bicycle being passed by a cute young woman in the passenger seat of a car. It then goes on to say, “Stop pedaling … start driving” and provides information about discount pricing for GM products such as the new 2012 Chevrolet Sonic subcompact sedan and the giant GMC Sierra 1500 truck.

The ad ran in a variety of college newspapers and was turned into a poster that was displayed campuses, according to the automaker.

The advertisement was widely panned on a variety of cycling blogs and in complaints to the company.

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Federal Reserve plans to monitor blogs and social media. But will it actually read them?

The times, they are a-changin' at the stodgy old Federal Reserve. We used to think of it a financial temple from which a priestly caste of economic policy makers would periodically emerge to make oracular pronouncements of the sort depicted in the video of Fed chairman Alan Greenspan bantering with Ron Paul. Now the Fed plans to keep track of social media and the blogosphere to better understand how it's perceived.

This is from a really great Neal Ungerleider story at Fast Company:

[T]he Fed is now evaluating bids for a social media analysis system that will mine data from Facebook, Twitter, YouTube, blogs, and web forums--beginning in December. In order to "handle crisis situations" and "track reach and spread of […] messages and press releases," the project will also identify a number of what they call "key bloggers and influencers" to target with their outreach, and presumably monitoring, efforts.

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Eurozone crisis: Are we all Slovaks now?

Mercer 730

SAMUEL KUBANI/AFP/Getty Images

Did little Slovakia just exercise its muscle and kill the Euro bailout package?

The Slovaks have spoken! A nation with a population roughly the size the San Francisco area and a GDP of $86 billion has failed to ratify the eurozone's plan for it to contribute $10 billion — about 12 percent of that GDP — to the currency union's bailout plans. This is the latest chapter in a debt-crisis melodrama that's forcing Greece into default and threatening Italy, Spain, and the banks of German, France, and possibly the United States.

Slovakia was the only eurozone country that voted nay. This is from the New York Times:

If nothing else, the unwieldy process underscored how the entire $590 billion euro stability fund, approved by the 16 other members of the euro currency zone, could be held hostage to the domestic politics of one tiny country, in this case Slovakia. It showed as well how a measure intended to increase confidence in the euro zone could instead emerge as a telling example of the shortcomings of a system that relies on an unwieldy group of nations to make and execute difficult decisions.

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Is the Occupy movement this generation's 'Radical Chic?'

Eric Richardson

Demonstrators gather in Downtown Los Angeles for the "Occupy L.A." protest

The Occupy movement has spread its influence so far now that it's inappropriate to limit it to just Occupy Wall Street. Some common cause is also emerging. Occupy Wall Street, which started out on the lawn in front of City Hall, has declared its intent to march on Los Angeles' financial sector this weekend. This is not Burning Man. This is a movement with a mission.

I know, I know — You didn't even know LA had a financial sector, right? It does, but more importantly, the Occupy movement is now focusing on a coherent foe. "We are the 99%" has decided that they're protesting the 1% — and by that they mean the financial elite. Those who control most of the nation's wealth and through their leverage with high finance, have plunged the U.S. and the world (Hello? Greek debt default?) into chaos and misery.

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