As President Trump and the Republican Congress continue their efforts to remove or weaken regulations put in place under the Obama Administration, changes to banking rules may be some of the most consequential. To understand what’s in store for American banking regulations, it’s important to look at their foundation, namely the Dodd-Frank Act that was passed in the wake of the 2008 financial crisis. Much of the current debate over financial regulation stems from the many provisions in Dodd-Frank.  Read on for an overview of three of the law’s most important components and a look at its future.

The Dodd-Frank Act

In the wake of the 2008 financial crisis, Congress passed a law that sought to place additional regulations on banks, improve and unify oversight, and protect consumers in order to prevent another crisis from happening. While the actual success of that law–the Dodd-Frank Wall Street Reform and Consumer Protection Act, known as the Dodd-Frank–continues to be debated to this day, it is responsible for establishing many of the key components of the current regulatory system. The law created many new regulatory bodies that have churned out an even greater number of regulations, but for the purpose of this look, we will focus on three of the main consequences of the law.

Capital Requirements

The general idea behind bank regulations is that bank failures are extremely costly events that can pose serious risks to the entire economy, so we should regulate them to ensure their stability. One of the most universally agreed upon ways to improve the stability of the financial system is requiring banks to hold higher amounts of capital. Bank capital essentially includes all assets that do not have to be repaid, which allow banks to sustain losses if their other assets, like loans, decrease in value. Generally speaking, bank capital includes things like common stock and profits, which are used to fund a bank’s investments. While banks tend to fund most of their business with debt–namely deposits, which are a form of short-term, low-interest debt that is used to fund loans and other investments with higher returns–capital is simply another source of funding that also serves as a stabilizing force if a bank’s other assets decrease in value.

Writing in Slate, Matt Yglesias uses the example of a home loan to illustrate how bank capital works. When buying a home, you typically make a down payment and then fund the rest of the purchase with a loan. That down payment is your ownership or equity in the house–which you own and do not have to repay–and works along the same lines as bank capital. If the value of your house increases then the value of your equity increases. But if the home’s value decreases beyond what you have paid for it, then your loan is considered underwater–meaning you owe more than the house is worth. When the same thing happens to a bank, it becomes insolvent and fails. Higher capital requirements help ensure that banks can still operate when their assets drop in value.

If people chose a bank based on whether or not they viewed it as a safe place to put their money, then it would make sense for banks to have high levels of capital to appeal to customers. But because the federal government insures depositors via the FDIC, a bank’s capitalization matters less to individuals when choosing a bank. As a result, banks are incentivized to increase leverage and risk to increase their returns rather than capital to improve their stability. In return for the federal guarantee, however, regulators require banks to do their share to promote stability by mandating that they hold a certain amount of capital.

Dodd-Frank increased capital requirements in a number of ways. It set a higher leverage ratio–the ratio of a bank’s debt to capital–and created a separate risk-weighted requirement that uses looks at how risky different assets are. Mike Konczal, a fellow at the left-leaning Roosevelt Institute and proponent of Dodd-Frank, argues that both are necessary to ensure stability. A leverage requirement on its own would push banks to maximize their assets’ risk in order to increase returns. And because risk weighting is susceptible to bias, an overall leverage requirement helps act as a backstop in the event that risk estimates are off.

Some argue that requiring banks to fund their business with a higher amount of capital is more expensive for banks, which has effects on the economy as a whole. The thinking goes that forcing banks to fund themselves with capital reduces their ability to make loans and extend credit to businesses, which in turn slows the economy. While proponents of higher capital requirements note that although capital levels are higher than they were before the crisis, they remain low from a historical perspective and argue that the cost of capital is often overstated by banks. Some even dispute the notion that capital is costly for banks and argue that bankers’ opposition to higher capital requirements may have more to do with the way they are paid.

In addition to stricter capital requirements, Dodd-Frank also requires the banks to undergo regular “stress tests” to simulate their ability to handle various crisis scenarios. It also requires the largest banks to submit plans to wind themselves down in the event of a failure and set up a process for the FDIC and the Fed to liquidate a failing bank in order to prevent risk from spreading throughout the system.

The Volcker Rule

While you may not have heard people talk about the Volcker rule specifically, it’s more likely that you have heard someone like Senators Bernie Sanders or Elizabeth Warren discuss the need for Congress to pass a “21st Century version of Glass-Steagall.” Although there are important distinctions between the two, the original Glass-Steagall Act and the Volcker rule target the same issue. Both regulate or prevent banks from using deposits, which are insured by the FDIC, to make what are considered risky or speculative bets for their own gain.

For a better understanding, it’s worth taking a minute to look at the history of banking in the United States. The original Glass-Steagall law was put in place after the Great Depression to put a wall between commercial banks–traditional banks that take deposits and make loans–and investment banks–banks that trade investment securities and help companies issue stocks and bonds. In 1999, that law was repealed, leading to the formation of a handful of very large universal banks that do both commercial and investment banking. While most tend to think that the repeal of Glass-Steagall did not cause the crisis, the mega-banks that it gave rise to certainly played a role–allowing banks to grow quickly and experiment with new financial products likely contributed to the culture or risk-taking and lax regulation that worsened the crisis.

The Volcker Rule, named after former Federal Reserve Chairman Paul Volcker, sought to prevent the new universal banks from engaging in some of the riskiest behaviors of investment banks. Volcker played an important part in drafting Dodd-Frank and focused a lot of his attention on regulating risky bank activities. His eponymous rule sought to stop banks from doing what’s known as proprietary trading–or using their own money to make speculative investments for profit. Essentially, the law sought to mirror some of the effects of Glass-Steagall without breaking up the banks outright, choosing instead to limit the risks that institutions with a commercial banking arm could take. As Volcker sees it, the government has an interest in subsidizing and helping commercial banking with policies like FDIC insurance and potentially even bailouts–because taking deposits and making loans are important functions for the entire economy. However, he also believes that with a government subsidy, banks should not be allowed to take on excessive risk.

The Volcker rule has been criticized from all angles. Banks argue that it amounts to a significant attack on their ability to make profits, while reformers claim that it is full of loopholes and that it doesn’t fully accomplish its own stated goals. And those on the leftmost flank of the Democratic Party argue that the rule, and Dodd-Frank more generally, is not aggressive enough–while regulations under the law are notably more stringent than before the crisis, the government should have broken up the banks and forced larger structural changes onto the financial industry.

It’s also worth noting that the original goal of the Volcker rule was weakened when Dodd-Frank and the resulting regulations were drafted. Several loopholes were included that allow banks to continue to invest a portion of their assets in hedge funds and private equity funds as well as exceptions for trades done on behalf of customers.

The CFPB

When lawmakers set out to revamp financial regulation, they noticed several areas that did not have a single authority in charge–instead, a complex network of overlapping agencies was tasked with creating regulations to accomplish several different goals. A notable example of this was consumer protection, which prior to Dodd-Frank was under the control of about 10 different agencies. The fragmented nature meant that no single agency had a primary mandate to protect consumers, which made it difficult for the government to hold financial institutions accountable in cases where individuals were harmed. As a result, an important part of Dodd-Frank was the creation of the Consumer Financial Protection Bureau, an agency with wide powers to regulate and punish the misconduct of a wide range of institutions. The broad authority and unique structure of the CFPB have made it a controversial component of the reform law, with businesses and conservatives criticizing its authority and accountability structure and progressives arguing that it is essential to keep the industry in check.

The CFPB acts as a regulator in that it creates new rules for financial institutions and punishes them for misconduct. It is also streamlined the complaint process to help consumers take recourse with companies when they have a problem. It created a public complaint database, providing important information for consumers and helping regulators identify common problems. Aaron Klein, a fellow and research director at the Brookings Center on Regulation and Markets, compares the CFPB to Google and Yelp, as it provides a central place for information and reviews to help people make informed choices. In the five years that the CFPB has been in existence, it has provided more than $11 billion in relief for 27 million consumers.

Conclusion

As efforts to undo regulations passed in the wake of the financial crisis gain momentum, it’s important to look back at the law central to the current discussion: Dodd-Frank. Passed in 2010, Dodd-Frank marked the most significant regulatory revamp of the financial system since the great depression. It has been particularly controversial, attacked on the right for going too far and the left for not going far enough. Given its controversial nature, many of the law’s provisions are fairly vague, leaving a lot of latitude for regulators. As a result, the various agencies in charge of creating, updating, and enforcing regulations have a lot of control over how regulation works in practice. Changes to the underlying structure of the law will likely require new legislation, a prospect that does not seem likely given the need for bipartisan support in the Senate. But changes at the margins remain possible and even likely under the new administration. As President Trump continues his efforts to undo regulations and lessen the burden faced by businesses, we may see changes to the Volcker rule or even significant attempts to block its enforcement.

While there are a number of ways that existing laws and rules could be modified in the coming years, it’s important to remember the goals of the law that underlies the current regulatory framework. In many ways, Dodd-Frank was a compromise between various visions of financial reform, including new capital requirements to improve stability as well as the creation of new regulators and a complex set of rules to prevent risky behavior in the largest and most important financial institutions.

Kevin Rizzo

Kevin Rizzo is the Crime in America Editor at Law Street Media. An Ohio Native, the George Washington University graduate is a founding member of the company. Contact Kevin at krizzo@LawStreetMedia.com.

The post What are the Most Important Components of the Dodd-Frank Act? appeared first on Law Street.

On Thursday, House Republicans are set to vote on a bill that would significantly repeal or alter major parts of the 2010 Dodd-Frank Act. Enacted in the wake of the 2008 financial crisis, and designed to prevent another meltdown, Dodd-Frank has been a Republican target since it was signed into law seven years ago.

Though the bill that would repeal it is expected to narrowly pass the House, entirely on the backs of Republicans, it faces a much higher hurdle in making it through the Senate, where 60 votes would be required to pass. If all 52 Senate Republicans vote for the bill, at least eight Democrats would have to support it to ensure its passage.

Critics of Dodd-Frank contend it stifled economic growth. Supporters say it helps bring financial security to everyday Americans, and is vital in preventing another recession.

The bill that would undo Dodd-Frank, called the Financial Choice Act, was drafted last year by Representative Jeb Hensarling (R-TX), the chairman of the House Financial Services Committee. Among other provisions, it would allow banks to waive some of Dodd-Frank’s restrictions on lending if they can show a substantial reserve of capital to cover potential losses.

On Wednesday, Speaker of the House Paul Ryan (R-WI), framed the new bill as a way to “rescue” small-town America from federal overreach. He said: “The Dodd-Frank Act has had a lot of bad consequences for our economy, but most of all in the small communities across our country.”

The bill is likely to pass the House despite unequivocal Democratic opposition; Republicans maintain a large advantage in the chamber. To Representative Louise Slaughter (D-NY), Republicans who support the Choice Act are “ignoring the past” and “endangering the future of millions of Americans.” She added: “Dismantling the law will force consumers to go it alone against Wall Street.”

The Choice Act will also weaken the powers of the Consumer Financial Protection Bureau, an agency that was formed after the 2008 crisis. Under the new law, the president would have the authority to unilaterally remove the head of the agency, and many of its oversight functions would be reduced. The law might also gradually reduce the federal deficit. According to a Congressional Budget Office analysis, the legislation would lower the deficit by $24.1 billion over a decade.

Still, Democrats see the bill as a direct rebuke of President Donald Trump’s promises to reign in Wall Street. “The Wrong Choice Act is a vehicle for Donald Trump’s agenda to get rid of financial regulation and help out Wall Street,” said Representative Maxine Waters (D-CA), the ranking Democrat on the Financial Service Committee. “It’s a deeply misguided measure that would bring harm to consumers, investors and our whole economy.”

Alec Siegel

Alec Siegel is a staff writer at Law Street Media. When he’s not working at Law Street he’s either cooking a mediocre tofu dish or enjoying a run in the woods. His passions include: gooey chocolate chips, black coffee, mountains, the Animal Kingdom in general, and John Lennon. Baklava is his achilles heel. Contact Alec at ASiegel@LawStreetMedia.com.

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On the eve of International Women’s Day, under the cloak of darkness, a 4 foot 2 inch bronze girl appeared in front of the iconic “Charging Bull” statue in New York City’s Financial District. People quickly took note of the “Fearless Girl,” praising the statue for its symbolism of gender equality in the workplace; however, one man notably took offense. Sculptor Arturo Di Modica, the bull’s creator, says the pint-sized statue violated his rights and distorted the meaning of his sculpture. Now he’s threatening to sue.

Di Modica argues that the clever placement of the Fearless Girl statue was copyright infringement and distorted the meaning of his sculpture. Instead of consulting with Di Modica first, State Street Global Advisors placed the statue created by Detroit-based artist Kristen Visbal there without his permission.

“The statue of the young girl becomes the ‘Fearless Girl’ only because of the Charging Bull: the work is incomplete without Mr. Di Modica’s Charging Bull, and as such it constitutes a derivative work,” wrote Di Modica’s attorneys in a letter Tuesday to Ronald O’Hanley, president and CEO of the investment firm.

State Street Global Advisors commissioned the statue for the anniversary of its Gender Diversity Index SHE, which tracks companies that are gender diverse.

Similar letters were also sent to New York City Mayor Bill de Blasio and McCann Worldwide, which Di Modica’s lawyers’ said developed an ad campaign for the statue. But based on Mayor de Blasio’s Twitter Wednesday, he appears to have sided with the girl statue’s creator.

Men who don’t like women taking up space are exactly why we need the Fearless Girl. https://t.co/D2OZl4ituJ

— Bill de Blasio (@NYCMayor) April 12, 2017

The Charging Bull first appeared in front of the New York Stock Exchange in 1989 as a guerrilla art installation. The bronzed bull, which took two years to complete, was designed to symbolize the American people’s resilience following the stock market crash of 1987. The city eventually removed the permitless art piece, but it was later reinstalled permanently in Bowling Green Park.

“The bull represents strength,” said Di Modica. “The strength of America, the strength of the market.”

Now, pitted against the independent little girl, Di Modica’s bull looks aggressive and menacing. Instead of being a symbol of American economic strength, it’s become a symbol of gender oppression thanks to Visbal’s pigtailed girl fearlessly staring down the bull with her hands defiantly on her hips. Without the bull, one could argue that the girl–which has become a tourist sensation–wouldn’t have been nearly as popular.

In March, de Blasio announced that the temporary month-long installation would be extended until February 2018 thanks to its overwhelming popularity. But Di Modica wants the statue moved to somewhere else in the city, and is requesting unspecified monetary damages.

Since Di Modica intended for his bull to stand alone, his attorney, Norman Siegel, could argue that the statue violates the Visual Artists Rights Act of 1990. This act grants visual artists the right “to prevent any intentional distortion, mutilation, or other modification of that work which would be prejudicial to his or her honor or reputation, and any intentional distortion, mutilation, or modification of that work is a violation of that right.”

Slate’s Christina Cauterucci noted that this law doesn’t apply to artworks created before the law’s enactment. So in other words, Di Modica will need to find another legal basis for his lawsuit against the city if he chooses to file one. Although, a more optimal solution would be for the city to simply relocate the statue and put the issue to bed.

While Visbal’s statue appears to have been well-intended, it clearly derives its meaning from the Charging Bull, distorting its legacy.

Alexis Evans

Alexis Evans is an Assistant Editor at Law Street and a Buckeye State native. She has a Bachelor’s Degree in Journalism and a minor in Business from Ohio University. Contact Alexis at aevans@LawStreetMedia.com.

The post Is the “Charging Bull” Sculptor Right to Want the “Fearless Girl” Removed? appeared first on Law Street.

Welcome to RantCrush Top 5, where we take you through today’s top five controversial stories in the world of law and policy. Who’s ranting and raving right now? Check it out below:

America’s First Female Muslim Judge Found Dead in the Hudson River

Yesterday, police found the body of Judge Sheila Abdus-Salaam, the first female Muslim judge in U.S. history, floating in the Hudson River. Abdus-Salaam was 65 years old and had been reported missing earlier that day. Authorities said there were no signs of foul play so far, but the investigation is ongoing. Abdus-Salaam made history as the first black woman on the New York Court of Appeals–she was nominated in 2013 as part of Governor Andrew Cuomo’s effort to diversify the court. Many described her as a professional and intelligent but above all a warm and empathetic judge who often sided with vulnerable parties. Many high-profile New Yorkers expressed their condolences on social media.

Justice Sheila Abdus-Salaam was a trailblazing jurist and a force for good.

On behalf of all New Yorkers, I extend my deepest sympathies. https://t.co/hnic07Shp1

— Andrew Cuomo (@NYGovCuomo) April 12, 2017

Emma Von Zeipel

Emma Von Zeipel is a staff writer at Law Street Media. She is originally from one of the islands of Stockholm, Sweden. After working for Democratic Voice of Burma in Thailand, she ended up in New York City. She has a BA in journalism from Stockholm University and is passionate about human rights, good books, horses, and European chocolate. Contact Emma at EVonZeipel@LawStreetMedia.com.

The post RantCrush Top 5: April 13, 2017 appeared first on Law Street.

On Monday August 24, the main Chinese stock market, the Shanghai composite, fell 8.5 percent in one day. This massive drop set off losses worldwide, beginning in nearby Asian markets including Japan. However, the worry and lack of confidence quickly spread to Europe and to the United States. In the west, this led to massive sell-offs of stocks and the value of the American market dropping 10 percent below its record high, which was achieved only a few months earlier at the beginning of summer. While this was initially blamed on the volatility of the Chinese market and its slowing economic growth, the loss also revealed more issues in the other global markets. Read on to learn about the history of an up and down global stock market, the reasons for the recent crash, and what is expected in the future.

History of Volatility in the Global Stock Exchange

The recent stock market losses, while severe and brisk, are by no means the first and certainly not the worst that have occurred in history. Since ideas such as interconnected economies and even nations are relatively new concepts, to find the first major market crash one would only have to look back less than 400 years. This crash occurred in the Netherlands in 1637. Based on speculation, tulip prices in the country soared, leading many citizens to invest. But the prices eventually peaked and then plunged back to earth, causing many investors to lose everything.

Several more speculative bubbles grew and then burst over the ensuing years in economic powerhouses like Britain and France. The phenomenon would reach a head however, with the stock market crash in 1929 which ultimately led to the Great Depression. This stock market crash, like the ones before it, was the result primarily of speculation, which had been fueled by massive economic growth within the American economy during the 1920s.

However, when the economy began to stagnate, investors initiated a mass sell-off which caused the market to plummet. This was followed by a run on banks so severe that thousands were forced to close. The effects of this collapse spread beyond the borders of the United States to Europe, due to both places’ reliance on the gold standard. The Great Depression would play a major role in the lead up to WWII and it was not until after the war that the global economy recovered.

Despite the devastation of the 1929 collapse, major market meltdowns would continue to take place. In 1987 the U.S. market lost over a fifth of its value in just one day, a day known as Black Monday. The oldest bank in England, Barings Bank, was forced to close due to speculation. Meanwhile in Japan, following a thirty year growth spurt, the market collapsed beginning in 1989 and has left the country in a prolonged state of malaise ever since.

The two most recent crashes both originated in the United States. The first was at the turn of the millennium–the dot-com bubble. The bubble had built upon the belief that the internet was ushering in a new type of economy, which was not subject to the same issues as the past. This led to a number of unwise investments in companies mired in debt or with no value. The crash began in 2000 and continued into 2002. The bursting of this particular bubble cost the NASDAQ 80 percent of its value and led to a recession.

The most recent crash began in 2008.  From its pre-recession peak until the market bottomed out 18 months later in 2009, the Dow lost more than 50 percent of its value. This collapse was triggered by sub-prime mortgages, but spread to other industries such as automotives and was prolonged due to other connected issues globally, including the debt crisis in Europe. The economy was only saved and confidence only tentatively restored through massive bailouts.  The video below explains the 2008 crisis and the root of many of the stock market crashes:

Reasons for the Recent Crash

Like other crashes before it, the current crash is the result of a number of factors which have combined to cause speculation and panic on a global scale.

China

At the center of the most recent stock market crash is China. China had already been dealing with a declining market since at least June of this year. On June 12 the Chinese government stepped in to fill the void left by a bubble, which had been created by Chinese citizens investing money they did not have. While the government tried a variety of stop-gap measures, these appear to have had little effect. Compounding this problem more was China’s slowing growth. In fact, many of those who invested did so based on the prolonged growth of China’s economy for the last 20 years.

Additionally, confidence in China from the outside also appears to be faltering. This comes as a result of several recent events. The most glaring is the government’s inability to handle this current stock crisis. Even after intervening and devaluing the currency in an effort to make borrowing money cheaper, the market has continued to fall. Other events as well, such as the fiasco with a chemical plant explosion and China’s dubiously reported economic figures have caused foreign investors to lose confidence.

Commodities

Another area directly impacted by China’s recent crash is the commodities market. Commodities are things such as oil, gold, and copper. Many emerging markets, such as Brazil and Turkey, relied on selling commodities in order to build up their economies. However, with China losing vast tracts of wealth daily in its stock market, it can no longer buy as many commodities as in the past. This has resulted in less demand, which means reduced commodity prices and subsequent losses in the emerging markets reliant on them.

United States

Another area feeling a market correction, a loss of 10 or more percent, was the United States. Along with the news about China’s falling market, was the fear of the interest rate hikes in September, which would make borrowing money more expensive. While the United States is not the economic engine it once was, nor the borrower of last resort, it is still the world’s largest economy and any sudden crash in experiences would reverberate worldwide with even greater force than China.

Other Countries

Aside from the United States and emerging markets like Brazil, other places around the world also felt the crunch from China’s continued market crash. This included places like Europe, whose combined market had its worst losses since at least 2011. This also includes countries closer to home near China, such as Japan and Australia, each of whom saw sharp losses in the immediate wake of China’s loss. The accompanying video provides a thorough overlook of the recent Chinese Stock Market crash:

After the Drop

So with all the recent fluctuations in the stock exchange it bears asking, what is next for the world’s markets? The answer is seemingly more of the same. In the U.S. the Dow plummeted 588 points first on Monday, then another 204 points Tuesday. However, on Wednesday and Thursday the market rallied, gaining over 1,000 points in two days. The rally means that, for the week, the market is actually up. In fact the surge on Wednesday and Thursday marks the largest gain in any two-day period in the history of the American stock market.

Around the world, other markets were also experiencing a rebound on Thursday. In Europe and Japan, the stock market rose following dramatic losses earlier in the week. Even in China, the market rose more than five percent, ending a week of losses. In fact, even with all the recent losses, China’s market is still up 43 percent from a year ago.

However, even with markets quickly rebounding, China’s stock market crash cannot just be dismissed. The recent collapse has certainly shaken faith globally, for those who viewed China as the number one growth engine for the future. Furthermore, if this is unfortunately true, there is really no one to take China’s place. Emerging markets, such as Brazil, are overly dependent on commodities, Japan is still stuck in stagnation and Europe, as China’s largest trading partner, is too interconnected, especially as it still recovers from the 2008 crisis.

This leaves the U.S. as the world’s steadying force. While U.S. markets rebounded on the back of news that the GDP grew 3.7 percent in the second quarter, up from the original estimate of 2.3, and that jobless claims continued to fall, that status remains shaky.

Certainly, everything is not perfect in the American economy either. Following the recent market correction and due to the tumultuous world economy, the Federal Reserve has said it will probably not raise interest rates after all. This means that money can still be borrowed cheaply, however it also reveals the fear of weakness in the U.S. and global economies. This weakness is especially troubling because unlike before, when interest rates could be slashed, that option is no longer available. The following video looks at the future of the economy:

Conclusion

There is a saying that goes, “those who don’t learn from history are doomed to repeat it.” The history of the global stock market can offer many examples that attest to the validity of this sentiment. Throughout its history, the market has repeatedly surged and crashed, like waves against a beach. The recent case of China is just one more example of this situation. Luckily in this case though, the losses seem temporary and appear to offer no long-term threat to the global economy.

Nevertheless, the danger remains. This is due to the persistent existence of rampant speculation which falsely builds up the value of any market. When a market is then faced with stagnation or a correction, investors panic and begin selling off their shares or running on banks for cash. This cycle has repeated itself time and time again and shows no sign of stopping despite the numerous examples of markets failures and warning signs. This most recent crash again offers the opportunity to learn and stop repeating the same mistakes which have plagued people and nations as long as markets have existed.

Resources

Vox: The Global Stock Market Crash, Explained

The Economist: The Causes and Consequences of China’s Market Crash

Reuters: Markets Rebound from China Slump, Strong U.S. Data Helps

The Bubble Bubble: Historic Stock Market Crashes, Bubbles & Financial Crises

History: The Great Depression

About News: Stock Market Crash of 2008

International Business Times: China Stock Market Crash Explained in 90 Sseconds

The Wall Street Journal: China to Flood Economy with Cash as Global Markets Lose Faith

USA Today: Stock Leaps

The Guardian: China’s “Black Monday” Sends Markets Reeling Across the Globe

CNN Money: Dow sets a 2-day Record, Finishes up 369 Points

Michael Sliwinski

Michael Sliwinski (@MoneyMike4289) is a 2011 graduate of Ohio University in Athens with a Bachelor’s in History, as well as a 2014 graduate of the University of Georgia with a Master’s in International Policy. In his free time he enjoys writing, reading, and outdoor activites, particularly basketball. Contact Michael at staff@LawStreetMedia.com.

The post Riding the Wave: The Tumultuous Global Stock Market appeared first on Law Street.

It’s official–Hillary Clinton will be the Democratic nominee for president. For weeks, any other legitimate potential Democratic challengers have been backing away very quickly from a nomination consideration. Honestly, with the way this race is probably going to go we might as well just have the convention right now, because Hills is definitely sitting pretty.

So now we turn our eyes to the much more interesting and significantly less important race on the Democratic side–who will be Hillary Clinton’s Vice Presidential nominee?

Given that everyone is still freaking out over her announcement, it’s probably best to let the dust settle before coming up with any concrete answer. But that doesn’t mean we can’t have some fun speculating in the meantime.

Speculation about who Clinton may pick includes a lot of mid-to-high-level players in the Democratic Party. Both sitting Virginia senators, Tim Kaine and Mark Warner, might be legitimate choices, as they are from a crucial swing state. Martin O’Malley, Governor of Maryland, and long considered a potential contender to fight Clinton for the nomination, could also make a strong partner.

Julian Castro, the Housing and Urban Development Secretary and former mayor of San Antonio, could also be a tempting second in command. While Texas isn’t purple yet, it may be relatively soon, and capitalizing on that in advance could be a smart overall strategy for the Democratic Party. Castro is Hispanic, a voting bloc that has become a priority to win for both the Democrat and Republican tickets. Furthermore, Castro is 40 years old–30 years Clinton’s junior. In addition to balancing out her perspective, Castro will look young and virile standing next to Clinton, and assuage those who have concerns about her health.

There are also questions over whether Clinton would only limit the search to men. There are a lot of female rising stars in the Democratic Party, including Elizabeth Warren, the popular senator from Massachusetts. She has said she’s not planning on running, despite the fact that she’d presumably have quite a bit of grassroots support if she chose to. More liberal than Clinton in many ways, including on financial issues and ties to Wall Street, she could energize young liberals who are still hurting from the 2008 recession.

Also from the ranks of Democratic women there’s been talk of Senator Kirsten Gillibrand (D-N). That one seems like a long shot though, despite the fact that Gillibrand took over Clinton’s seat when she vacated it to become Secretary of State. She’s gone after some big, important issues in her time in the Senate, such as sexual assault in the military; however, in addition to the fact that Clinton and Gillibrand are seen as somewhat similar, there are concerns over whether a ticket with two people from the same state could even work. The 12th Amendment effectively prohibits that both the President and Vice President be from the same state, but exactly what that means is somewhat difficult to parse out. Clinton and Gillibrand both served as Senators from New York, but does that make them “from” the same state? That would be an issue that would have to be decided, but the idea that she chooses Gillibrand is unlikely to begin with. It could however, impact any other possible VPs from New York, including Governor Andrew Cuomo.

There are plenty of other names for consideration on this list. There’s also Senator Amy Klobuchar from Minnesota. She was an attorney with a strong record on crime and safety before being elected to the Senate. Senator Cory Booker is another rising star, particularly after his much-respected time as mayor of Newark, New Jersey. Former Governor of Massachusetts Deval Patrick has been brought up, and even though he says he’s not interested, that was over a year ago, and he may change his mind.

No matter who Clinton picks, she’s got a solid list from which to choose. As the Republican Party contenders spend the next few months tearing each other down, she’s got time to groom a running mate and solidify her base.

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

The post Hillary’s In, But Who Will She Run With? appeared first on Law Street.

Name: Robert S. Khuzami

Born: August 2, 1956

Position: Partner

Place of Occupation: Kirkland & Ellis LLP, Washington, D.C.

Current Salary: $5,000,000/year

Former Notable Positions:

• Head of Enforcement Division at Securities Exchange Commission (SEC)
• U.S. Federal Prosecutor – Chief of Securities and Commodities Fraud Task Force
• General Counsel at Deutsche Bank AG (DBK)

Law School: Boston University School of Law, Class of 1983

Links:

• Robert Khuzami – Kirkland & Ellis LP Profile Page
• Robert Khuzami – Wikipedia page
• Ex-SEC Enforcement Chief Joins Kirkland & Ellis for $5 Million a Year
• Under Khuzami, SEC Filed More Than 150 Cases Related to Financial Meltdown
• A Legal Bane of Wall Street Switches Sides

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Rob Anthony is a founding member of Law Street Media. He is a New Yorker, born and raised, and a graduate of New York Law School. In the words of Supreme Court Justice William O. Douglas, “We need to be bold and adventurous in our thinking in order to survive.” Contact Rob at staff@LawStreetMedia.com.

Featured image courtesy of [Donald W Reynolds via Flickr]

Robbin Antony

Rob Antony is a founding member of Law Street Media. He is a New Yorker, born and raised, and a graduate of New York Law School. Contact Rob at staff@LawStreetMedia.com.

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