Amex news

American Express to Pay $75 Million Over Credit-Card Practices
http://dealbook.nytimes.com/2013/12/24/american-express-to-pay-75-million-over-credit-card-practices/?_r=0

Important banking news

Rule That Curbs Bank Risk-Taking Nears Approval
Key points:
The rule bans banks from trading for their own gain, a practice known as proprietary trading.
The Volcker Rule also requires chief executives to attest that they have established programs for complying with the rule

http://dealbook.nytimes.com/2013/12/09/regulators-set-to-approve-tougher-volcker-rule/
Approved http://dealbook.nytimes.com/2013/12/10/regulators-vote-to-approve-volcker-rule/?_r=0
http://dealbook.nytimes.com/2013/12/10/war-of-words-over-the-volcker-rule-a-timeline/
 Bitcoins
http://dealbook.nytimes.com/2013/12/09/for-bitcoin-square-peg-meets-round-hole-under-the-law/
 Goldman Profit Falls 19% on Weakness in Fixed-Income Unit
http://dealbook.nytimes.com/2014/01/16/goldman-profit-declines-19-percent/?ribbon-ad-idx=4&rref=business

Bracing for a barrage of legal settlements for their roles in mortgage practices leading up to the financial crisis, banks have been setting aside cash to fund impending payouts

Vocker Rules
deter banks from making risky bets with their own money
prohibits banks from owning more than 3 percent of a private equity or hedge fund and severely restricts proprietary tradin

How software helps firms hire workers more efficiently

THE problem with human-resource managers is that they are human. They have biases; they make mistakes. But with better tools, they can make better hiring decisions, say advocates of “big data”. Software that crunches piles of information can spot things that may not be apparent to the naked eye. In the case of hiring American workers who toil by the hour, number-crunching has uncovered some surprising correlations.
For instance, people who fill out online job applications using browsers that did not come with the computer (such as Microsoft’s Internet Explorer on a Windows PC) but had to be deliberately installed (like Firefox or Google’s Chrome) perform better and change jobs less often.

It could just be coincidence, but some analysts think that people who bother to install a new browser may be the sort who take the time to reach informed decisions. Such people should be better employees. Evolv, a company that monitors recruitment and workplace data, pored over nearly 3m data points from more than 30,000 employees to find this nugget.
Some 60% of American workers earn hourly wages. Of these, about half change jobs each year. So firms that employ lots of unskilled workers, such as supermarkets and fast-food chains, have to vet heaps—sometimes millions—of applications every year. Making the process more efficient could yield big payoffs.
Evolv mines mountains of data. If a client operates call centres, for example, Evolv keeps daily tabs on such things as how long each employee takes to answer a customer’s query. It then relates actual performance to traits that were visible during recruitment.
Some insights are counter-intuitive. For instance, firms routinely cull job candidates with a criminal record. Yet the data suggest that for certain jobs there is no correlation with work performance. Indeed, for customer-support calls, people with a criminal background actually perform a bit better. Likewise, many HR departments automatically eliminate candidates who have hopped from job to job. But a recent analysis of 100,000 call-centre workers showed that those who had job-hopped in the past were no more likely to quit quickly than those who had not.
Working with Xerox, a maker of printers, Evolv found that one of the best predictors that a customer-service employee will stick with a job is that he lives nearby and can get to work easily. These and other findings helped Xerox cut attrition by a fifth in a pilot programme that has since been extended. It also found that workers who had joined one or two social networks tended to stay in a job for longer. Those who belonged to four or more social networks did not.
There is no point asking jobseekers if they are honest. But surveys can measure honesty indirectly, by asking questions like “How good at computers are you?” and later: “What does control-V do on a word-processing programme?” A study of 20,000 workers showed that more honest people tend to perform better and stay at the job longer. For some reason, however, they make less effective salespeople.
Algorithms and big data are powerful tools. Wisely used, they can help match the right people with the right jobs. But they must be designed and used by humans, so they can go horribly wrong. Peter Cappelli of the University of Pennsylvania’s Wharton School of Business recalls a case where the software rejected every one of many good applicants for a job because the firm in question had specified that they must have held a particular job title—one that existed at no other company.

Turning Down a Job Offer

You would have thought a friend or colleague crazy last year if they had asked for advice on how to turn down a job offer as everyone around you held on to their jobs for dear life. But as the economy slowly recovers, people are once again beginning to embrace something many considered long gone: choice.
If you are lucky enough to be in a position to choose between two offers or luckier still to have the ability to simply turn down a job that isn't quite right, your good fortune also brings with it a certain level of responsibility — that of declining the offer graciously and skillfully without burning bridges or creating ill-will.
As with any carefully crafted message, you need to think in advance about how to communicate your decision in a way that makes you look good and leaves your rejected employer with their ego in tact. The best way to do this is to include the following three key points in your conversation:

1. A Gracious Thank You
2. A Well-Thought Out Rationale
3. Forward Momentum

Thank You
The very first thing you must start with when turning down a job offer is a heartfelt thank you to the person who extended the offer. Make sure to communicate that you are appreciative of the offer and state that you respect both the organization and the other person — don't make it seem as though the position was beneath you or that you didn't give the offer serious thought and consideration.
Rationale
Next comes your rationale for turning down the job. This is the most difficult aspect of the conversation but also the most important. There are myriad reasons a job won't be a perfect fit and many of them are perfectly plausible and valid. Others may be harder to justify or voice (it's hard to decline on the grounds of the hiring manager being a jerk or the fact that you can't bear to leave the West Coast).
Even if your rationale strays from the politically correct or socially acceptable, 99% of the time you can communicate even the most delicate of reasons in a professional and tactful way. Here is some helpful language around five common reasons you might turn down an offer:

• External Factors: Geography, family, timing. It's always easier to blame a decision on someone or something else: if issues beyond your control prevent you from accepting a position, be honest: "Unfortunately, I can't make the move because of family obligations." Or, "As much as I am interested in the position, I've decided it's not the right time to uproot my family and move across the country."
  
• Money: It's absolutely okay to turn down a position that doesn't pay well (enough). You are allowed to say: "I wish I could make it work, however I need to be at a higher compensation level. I'm sure you understand."
• Lack of Skills/Qualifications: If you don't have the requisite skill-set to knock the ball out of the park or you suspect you're being set up to fail, then the best way to bow out is to state this: "After much consideration, I've decided I can't realistically exceed expectations and I'd never want to join an organization where I won't be able to under promise and over deliver."
• People Issues: You can't tell someone you don't like them or their colleagues, but you can use "cultural fit" as a catchall when your personality doesn't jive with a team or organization. For instance, "I respect the work you all do but I just don't think it's the right fit for me personally. I'm going to continue looking for something more face-paced/more entrepreneurial/ with a flatter organizational structure, etc.
• Dead End: If a job is appealing today but won't move you in the right direction towards your ultimate career goals, you are entitled to say so. People will generally respect your long-term career goals. "As much as I'd love to join the team, I really need to get some fundraising experience so that I can transition into a development role in the next few years. Truthfully, the program manager position just isn't going to do that for me."

Forward Momentum
Once you've given a thoughtful reason for why you've turned down the position, thank your counterparty again and offer to stay in touch or wish them luck with the hiring process. You can acknowledge that you'd like to be kept abreast of new opportunities or revisit the situation if your external factors happen to change. It's not crazy to think that the employer you dismiss today may be appealing to you down the road, so keep the relationship positive and the door open.

25 Guys to Avoid on Wall Street

There are lots of critical skills you need to succeed on Wall Street. It helps to understand market forces. A facility with numbers is useful. Having a feel for group dynamics is necessary to succeed on trading desks and deal teams. Superb time management, verbal acuity, and judgment are all important.

But, mostly, what you need to do is avoid the things that will destroy your career. And most of the things that will destroy your career go under the general heading of “people.”

I asked NetNet reporter Ash Bennington to look back on his years on Wall Street—where he was a vice-president at Credit Suisse and BB&T—and assemble a list of the people you need to avoid. I thought there might be three or four. I was way off. Ash returned with a list of 25 people to avoid.

You might want to print this out and carry it with you. When you meet someone new, scan the list. Decide if they are someone to avoid. Alternatively, you should take a look at the list and ask if you are on it. If you are, well, don’t be surprised when your colleagues start avoiding you. — John Carney

1. Avoid the guy who calls you 'Chief'.  He doesn't remember your name.
2. Avoid the guy who went to Hotchkiss and Yale and wears Nantucket reds during the summer. He doesn't think you belong.
3. Avoid the dim-witted back-slapping managing director. He's not as smart as you are—but he's been throwing guys like you under the bus since you were in grade school.
4. Avoid the consultant hired by the dumb managing director to do his math for him. Not only will he throw you under the bus, he's smarter than you are.
5. Avoid the guy who always wants you to be his alibi when he cheats on his wife. ("Hey man, is it cool if I tell Kathy that we're going fly fishing in Canada this weekend?"). No, dude: It's not cool.
6. Avoid the guy who keeps failing the CFA Level 1. He's looking for someone to blame.
7. Avoid the girl who cries at her desk. (You can ignore my advice on this one—but either way, you won't make that mistake twice.)
8. Avoid the guy who offers his clients 'a very special opportunity' to invest in anything. He has a problem with cocaine.
9. Avoid any man who has floppy hair after age 30—he's a complete toolbox.
10. Avoid the guy who throws his phone across the trading floor whenever his positions go south. He's an angry dude, and the more time you spend with him the more reasons he'll find to dislike you.
11. Avoid anyone who tells you that you should relax and have a couple of drinks—at 9:15 on a Tuesday morning. You're not cool enough to hang out with this guy.
12. Avoid anyone who won't relax and have a couple of drinks—at 9:15 on a Thursday night. They're not cool enough to hang out with you—and ultimately they'll resent you for it.
13. Avoid any broker who tells you his client is going to DTC in 50MM in securities from Europe and he needs to borrow a C-Note. Just for the weekend. And this is the last time.
14. Avoid the banker who never seems to close a deal but still manages to remain employed. He's got something ugly on somebody—and you don't want to be involved.
15. Avoid anyone who tells you to 'take one for the team'. He got where he is by convincing dopes like you to jump in front of an oncoming train.
16. Avoid the guy who tells you, "Seriously, all I do is work and then go home and lift." He's telling you the truth—and he's as dumb as a stone.
17. Avoid anyone who sits within eye-line of your desk: They know what time you show up and what time you leave—and chances are they think you're a lazy punk.
18. Avoid anyone who is ten years older than you are—and is still more junior in the reporting structure. He hates you more than you could ever imagine.
19. Avoid the guy who posts Facebook pictures of himself getting arrested at the Saint Patrick's Day parade. The guy is fearless—and he thinks you're a complete coward.
20. Avoid the guy who hangs his suit coat on the back of his chair to show off his suspenders. He either still thinks it's 1985 or he's trying to compensate for something.
21. Avoid the guy who can drink all night, take a shower, and come into the office as crisp as a $100 bill. He's got an oxlike constitution—and it will be fatal to your career to try to emulate his example.
22. Avoid the guy who keeps telling you: "Without the back office, you overpaid clowns wouldn't even have a job." He's right—but you don't need to hear it.
23. Avoid the guy who won't share his Adderall: It just speaks to his character.
24. Avoid anyone on Wall Street dumb enough to pick a fight with Bess Levin.
25. Avoid the guy who gets drunk and loves to brag about never losing in arbitration: He's going to get indicted. (Trust me on this one.) 

http://www.cnbc.com/id/41759013

The Survival of the Safest

CORPORATE managers struggling to preserve their companies and protect their core employees have inadvertently contributed to a vicious cycle of rising unemployment and plummeting national morale. If we are to break out of this downward spiral, we first need to understand the problem, then deal with it on a huge scale.

It’s no surprise that business confidence has been shaken over the last few years. Executives are unwilling to take on new risks, and people in all walks of life are nervous about trusting in one another. In a broad sense, damage to morale — which John Maynard Keynes called “animal spirits” — surely ranks as one of the most important reasons for the American economy’s persistent weakness.
Yet professional managers throughout the business world see it as their job to keep work-force morale high. But, paradoxically, the actions they take for their own workplaces often make the overall crisis more severe.
A remarkable book by Truman Bewley, titled “Why Wages Don’t Fall During a Recession” (Harvard, 1999), provides insights into the current situation, even though it focuses on the recession of 1990-91 and the long “jobless recovery” that followed it.
The title derives from a puzzle that has troubled economists for more than a century: Why doesn’t the labor market “clear”? If demand falls in markets for other productive factors — say, wheat as an ingredient in the baking of bread — the price usually drops until the excess supply is mostly gone. What is unusual about the market for labor is that excess supply, which shows up as unemployment, can be prominent and persistent.
Why? In short, the difference is morale. Factors of production like wheat or trucks or pumps don’t have morale issues. Human beings do.
How these issues affect the labor market is a major focus of the research of Professor Bewley, who is a colleague of mine at Yale. He has developed an idiosyncratic approach, interviewing hundreds of corporate managers at length about the driving forces for their actions. The managers consistently told him that they are concerned about the emotional state of their core employees. They said that their companies’ continued success depends on the positive feelings and loyalty of these workers — and lamented the hard choices that would need to be made in a severe downturn.
Keeping all employees relatively idle while reducing their pay or cutting their working hours will hurt everyone. Managers say they usually consider it better to protect the crucial workers — and to engage in sudden mass layoffs of others. The idea is to clear out the less essential people at once, ushering them out the door quickly so their complaining doesn’t spoil the atmosphere. Then managers can make sure that remaining employees receive their full wages and can pay their household bills.
“Losing a job is close to a death in the family,” one manager said. But in a tough economy, when managers view the very survival of their enterprise as in jeopardy, they steel themselves against sentimentality, believing that layoffs are needed to keep the business going with their most loyal and effective people.
UNEMPLOYMENT, in this context, is like battlefield triage, leaving some severely injured soldiers to die so that medics can keep as many as possible in fighting condition. But, of course, such a harsh practice may not contribute to the best morale among those chosen to survive.

Unfortunately, managers often lay off more people than necessary, to ensure that they don’t have to repeat the ordeal anytime soon. The remaining workers must work harder, taking on some of the work of their missing colleagues, and productivity rises. (The economy today shows both increasing productivity and increasing corporate profits.)
Those relegated to unemployment can’t directly “poison the atmosphere” in their former workplaces. But they remain friends and neighbors of the employed, and their anger and distress, repeated in thousands of communities, contribute to a poisoning of the atmosphere of the entire nation.
Moreover, managers interviewed by Professor Bewley in the 1990s said that employees who hold onto jobs often suffer “survivors’ guilt.” They are genuinely pained, experiencing empathy with the less fortunate. In this troubled state, they don’t think about taking extravagant vacations, or buying new houses or fancy new cars. And this frugality detracts from demand that might produce jobs for others.
Similar thinking underlies the relatively low level of business expenditures today on buildings, equipment and software. Lower-level managers won’t ask for scarce resources for such things, because those items look like luxuries to fellow employees, who worry that there won’t be enough in the company budget for them to keep their jobs.
One top manager told Professor Bewley that he had to compensate for the reticence of lower-level managers, who won’t ask for anything. “I tell them to put in a few dreams for equipment they would like, because if they don’t try, they’ll never get what they want,” this manager said.
Of course, while that reticence may preserve jobs in one’s own company, it works against job growth elsewhere. A result is a loss of vigor in the aggregate economy, and the sapping of the very kind of creativity that might spur a recovery.
Professor Bewley shared with me a passage from an interview in July with a manager of a large manufacturing company. “There is more uncertainty, and everybody is afraid,” this manager told him. “Do your job. Keep employed. Don’t come up with a new idea.” In his own company, the manager said, “Everybody is doing the same thing.”
Sometimes the private sector needs help from the government, and this is one of those times. We need to break the cycle of protracted unemployment and sagging morale through big government programs to create millions of jobs.

Robert J. Shiller is professor of economics and finance at Yale and co-founder and chief economist of MacroMarkets LLC.

http://www.nytimes.com/2010/10/03/business/economy/03view.html?partner=rss&emc=rss