Another year, another big fine for JP Morgan Chase. The bank's expected to soon be paying out another $2 billion in criminal and civil settlements to the federal government. This time for ignoring signs of Bernie Madoff's Ponzi scheme. That brings the grand total of fines JPM has paid in just the past year to just about $20 billion.
But the markets aren't paying any heed: Shares are up almost a percent today and CEO Jamie Dimon is still there. The company's doing just fine, it seems. But is there a limit?
Tim Fernholz from Qz.com thinks JPM's seeming invulnerability may be due to Wall Street's indifference to anything but the bank's financial performance:
"What I think to look for with Jamie Dimon is going to be, the company's latest earnings report. Ultimately on Wall Street and I think among the investors and these banks, they're an amoral bunch in the strictest sense of that term in that they do not care about the crime, they care about the stock price and the earnings."
Fernholz also says that it's important to remember that the fines and penalties we see today are punishing crimes and practices that aren't necessarily still happening.
"So it's hard to say...if they've cleaned up their act, and I think that's one of the reasons that prosecutors have reportedly opted for this deferred prosecution agreement," Fernholz says, "They're going to ask JP Morgan to really strengthen the controls that they supposedly put to watch out for things like Ponzi schemes or drug runners or any other kind of money laundering."
For this week's Sandwich Monday, we brave the record-breakingly cold streets of Chicago to try the Ignatius R, a record-breakingly enormous sandwich from Jerry's Sandwiches. It's a potato bun wrapped around pretty much everything you can imagine.
One of the first items on Congress's agenda in the new year is whether to reinstate emergency unemployment benefits that expired in late December.
There is a key vote in the Senate Monday afternoon. House Republicans have said they'd consider the idea, but only if the cost of the extended benefits is offset.
Deals like that are common in Washington, but that doesn't mean the savings always materialize as promised.
“There’s a con going on,” says economist Donald Marron.
Marron is a former economic adviser for George W. Bush, now at the Urban Institute. He says Congress isn’t a bunch of cons, but he says its budget deals are pretty gimmicky, like when Congress ignores a program’s long-term costs, focusing instead only on short-term revenues.
“So they’ll show up and they’ll appear to be helping to pay for whatever the program is you want to pursue, but it still means in the long run that we’re going to lose money," Marron explains.
Now you see it. Now you don’t. That short-term thinking leads leads to itty-bitty deals, like the Senate’s proposed emergency unemployment extension, which would only last three months.
“If it’s only for three months you can sort of slide it under the rug and you don’t have to pay for it," says Henrietta Treyz, a budget expert at Height Analytics.
Just don’t look under the rug. Some Washington wonks say these kinds of games are inevitable right now. Harry Holzer, who teaches public policy at Georgetown, says with some in Congress vowing to take huge bites out of the deficit, normal budget negotiations just aren’t possible.
"It often has to be a bit of a shell game to square with their very severe rhetoric on fiscal austerity right now,” he says.
Schoolchildren are home by the millions. Flights are grounded by the thousands. Wind chills are being measured in the negative double digits. The great Polar Vortex of '14 is making its mark on much of the country, and the economy. Because a lot of things we take for granted day in and day out -- from starting the car to turning on the faucet -- were a little harder today.
“Plumbers get really busy,” says Nolan Doesken, state climatologist in Colorado. “This is the ideal situation for frozen pipes, when it’s not only really cold, but really windy to go with that cold.”
Jeff Cherwenka is used to working in extreme cold. He spent six seasons doing research at the South Pole. Now he’s back at the University of Wisconsin-Madison, where it was minus 17 degrees this morning.
“It looks like it’s minus 9 Fahrenheit at the South Pole today, so it’s actually colder here than at the South Pole,” he says.
At these temperatures, Cherwenka says, plastic and steel become so brittle they can break. Car batteries stop working.
“There’s a lot of little inconveniences,” he says, “but if it’s your car and it’s not starting then it’s a big inconvenience, right?”
At the high-tech end, electronics can fail. Kevin Gutknecht with the Minnesota Department of Transportation says things got dicey today on a reversible toll road on the west side of Minneapolis.
“We call it reversible because it goes in one direction in the morning, and another direction in the afternoon,” he says. “One of the gates on that quit working because of the cold.”
Below ground, water mains break. Even sewers can freeze. Shipping slows down in the Great Lakes. Diesel fuel can congeal.
“Things just break when it’s cold,” says Wilf Nixon, professor of civil and environmental engineering at the University of Iowa. “Unfortunately, they’re under more stress and it’s when you need them most…when they’re most likely to fail on you.”
That includes humans, too. We don’t work so well when it only takes a few minutes in the cold to end up with frostbite.
Fatigue doesn’t help. In Elgin, Il., public works superintendent Daniel Rich says his workers have been doing 12-hour shifts since before Christmas, removing snow, de-icing streets and fixing water main breaks.
“You can tell the guys are getting a little tired, and as a result of that they slow down a quarter step,” he says.
Tomorrow is the start of the Consumer Electronics Show in Las Vegas, the annual bacchanal of all things technological. The tech industry is known for promising us the future, but how often does technology deliver on that promise. We are after all, still waiting on the JetPack.
Benjamin R Harrison was working at CES last year as videographer for the website Engadget when he was ushered into a hotel room, to see the unveiling of a prototype for a virtual reality headset that allows users to become the character in a game. "At that point it was literally ski goggles that had components duct-taped into it," remembers Harrison. Virtual Reality, like JetPacks, was promised to us long ago. In this case, the duct tape ski goggle contraption became Oculus Rift, a virtual reality headset expected to deliver on the promise of virtual reality gaming.
Roughly 20,000 new products will launch at this year's CES. But very few will be big commercial successes. "I think the way to think about this is as more of a case of evolution then things succeeding or failing," says Shawn Dubravac, chief economist and head of research at The Consumer Electronics Association, which produces CES.
Many of the products unveiled this week will flop commercially. Often the first generation of a product is the crummiest. It can take time for bugs to be worked out or for people to understand why something would be useful to them. Many of this year's new products are part of a larger technological trend, the digitization of everyday things.
Dubravac says the future is one of sensorization, where everyday objects, from toothbrushes to tennis rackets, will have sensors that generate streams of data, like the speed of your backhand. The age of autonomy, as Dubravac calls it, where cars drive themselves, and all of our things talk to our computer so it can manage all the data generated by our new gadgets, freeing us to enjoy them.
This final note to observe a long-overdue bit of corporate rebranding.
First, do you know what EADS stands for?
No? Even though you've probably flown on their planes.
The European Aeronautic Defense and Space Company makes Airbuses.
Executives have now apparently recognized the ungainlyness of that name and have renamed themselves simply: Airbus.
When hunter-gatherers started adding grains and starches to their diet, it brought about the "age of cavities." At least, that's what a lot of people thought. But it turns out that even before agriculture, what hunter-gatherers ate could rot their teeth. The problem: At least some of these ancients had a thing for acorns.
Frostbite isn't on most people's health worry lists. But this week it's a concern for millions of people who live in places that don't usually contend with serious risk of cold injuries. Extremities can be affected by frostbite even when bundled up.