Part of Reuters' Pulitzer-winning series for Breaking News Photography. Mateo, a two-year-old migrant boy from Honduras, is led through dense brush by his mother Juana Maria after a group of two dozen families members illegally crossed the Rio Grande river into the United States from Mexico, in Fronton, Texas October 18, 2018. REUTERS/Adrees Latif
The winners of the Pulitzer Prize have been announced and recipients include The Los Angeles Times’ investigation into George Tyndall, a former USC gynecologist accused of sexually abusing students, the Pittsburgh Post-Gazette’s breaking news coverage of the massacre at the Tree of Life synagogue, and Hannah Dreier, who won for feature writing for her powerful series at ProPublica following Salvadoran immigrants “whose lives were shattered by a botched federal crackdown on the international criminal gang MS-13.”
The full list of the Pulitzer recipients can be found here, and we’ve highlighted some of the winners and honored works below. Read more…
George Benjamin Luks, "The Menace of the Hour," 1899. Wikimedia Commons.
Will Meyer | Longreads | December 2018 | 19 minutes (4,998 words)
As Amazon attempts to wrap its strangling octopus tentacles around Long Island City and the nondescript “National Landing” — a newly renamed portion of Crystal City — in Northern Virginia, one of the words floating in the punch bowl of our popular vernacular to describe the firm’s unchecked power is “monopoly.” The “HQ2 scam,” as David Dayen dubbed it, was never an act of good-faith competition, but rather a cunning scheme to collect data about cities all over the country: What infrastructure did they have? How many tax-breaks was the local (or state) government prepared to hand over to the richest man in the history of the world? What would they do to accommodate a massive influx of professional-class tech workers? The spectacle of the publicity stunt was gratuitous, to put it mildly, but it was also beside the point. In Dayen’s formulation, as Amazon expands from two-day to one-day or same-day delivery, the company will need more infrastructure everywhere. From Fresno, California, to Danbury, Connecticut, at least 236 cities stumbled into Amazon’s HQ2 flytrap: submitting bids — bargaining chips — for the company to use in its quest for monopoly.
The story of HQ2 isn’t about Amazon’s superior products, or even benefit to consumers, but instead how the company is the current poster boy (poster behemoth?) for the unchecked political and economic power of tech giants. Amazon has the ability to drive out rivals, to engage in dirty tricks — like the HQ2 scam — due to its size and inertia. One need look no further than the Forbes billionaire list to see evidence of the damage caused by forgoing antitrust action against tech companies. Zuckerberg, Gates, Bezos are all high on that list. The white collar cops in Washington haven’t bothered them for the most part (they did go after Microsoft enough to scare them in the late nineties, but that was the last serious case), basically allowing these firms to scoop up competitors and amass as much power as they please. Read more…
September 2008 was a whirlwind month for Michael Grynbaum, then a markets reporter for the New York Times. A self-described “newbie” to the paper’s business desk (he had previously worked on the metro desk), Grynbaum was immediately thrust into reporting on a financial maelstrom, a period which included the collapse of Lehman Brothers (otherwise known as the largest bankruptcy filing in United States history), the sale of Merrill Lynch to Bank of America, the transformation of Goldman Sachs and Morgan Stanley into bank holding companies, and what very well could have been the collapse of the nation’s economy.
Among Grynbaum’s responsibilities was “covering all the daily market plunges and the economic reports,” he told me, which meant he was busy that September, trying to keep pace (along with the other Times reporters like Andrew Ross Sorkin, Jenny Anderson, Eric Dash, and Michael de la Merced, among others) with a tumultuous flurry of daily breaking news. “As a reporter, you couldn’t divert your gaze for one minute,” says Diana B. Henriques, then a senior financial writer for the Times. “It was like an atomic blast, with ripples going in every direction.”
One of those ripples was the House of Representative’s September 29th vote on a $700 billion economic rescue plan; despite pleas from both President George W. Bush and Treasury secretary Hank Paulson, the House voted down the bill, 228-205, a move which prompted the Dow Jones Industrial Average to fall nearly 800 points.
Grynbaum remembers reporters and editors gathering around TV screens scattered about the Times’ newsroom to watch the landmark vote, and as it became clear the proposal (which entailed using taxpayer money to buy and absorb troubled assets) would fail, “an eerie silence fell over the newsroom,”he says. And then, “The Bloomberg machines started flashing red: the market was plunging.” He soon realized on that late September day a decade ago that he had to write the “breaking story about a historic stock collapse.”
“Everyone was working on adrenaline, aware of how consequential this moment was,” he says of the coverage:
At 1:30 p.m. the House began to vote on the rescue package that Mr. Paulson and Congressional leaders negotiated over the weekend. About 10 minutes later, when it became clear that the legislation was in trouble, the stock market went into a free fall, with the Dow plunging about 400 points in five minutes.
At his home office in Great Neck, N.Y., Edward Yardeni, the investment strategist, received terse e-mail messages from clients and friends. “Is this the end of the world?” one asked. Another sent a simple plea: “Stop the world, I want to get off.”
At some point, Grynbaum thought to call his parents, suddenly aware of the affects a stock market free-fall would have on their 401(k)s and portfolios, which were “taking a massive hit.” Ten years later, and another Great Depression averted, and Grynbaum can recall those weeks with some necessary and illuminating perspective, adding, “It was a thrilling and slightly scary time to be covering Wall Street.”
To others intimately involved with the roller-coaster fall of 2008, like Gary Cohn, then the president of Goldman Sachs, that same sense of measured introspection is notably lacking.
Since resigning as the director of the National Economic Council, Cohn has emerged as arguably the lone sane voice operating within the current chaos—aka within the Trump administration. First there were reports of his near-resignation following President Trump’s comments on the violence in Charlottesville, VA, and Bob Woodward’s recently published Fear alleged Cohn removed letters from Trump’s desk, thus saving trade agreements with several countries. During a period in which many feel as if they are vainly screaming into a void, Cohn’s protests—real and alleged—have endeared him to those looking for any sort of official resistance.
But that aura shattered around the time of the collapse’s ten-year anniversary. During an interview with Reuters, Cohn outlined the primary cause of the financial crisis, and surprisingly, the former Goldman exec largely laid the blame on Main Street’s front porch, saying,
“Who broke the law? I just want to know who you think broke the law. Was the waitress in Las Vegas who had six houses leveraged at 100 percent with no income, was she reckless and stupid? Or was the banker reckless and stupid?”
Cohn’s comments echo a popular opinion for many of those in the financial industry, and yet, that doesn’t disqualify his statements as anything less than mind bogglingly obtuse. It’s easy to navel-gaze in an attempt to diagnose the financial near-collapse and subsequent recession: yes, Americans became entranced with debt—at the bubble’s peak, the average American owned 13 credit cards—and yes, people flagrantly spent, running up an average household debt of roughly $15,000. But to absolve Wall Street and its employees is negligent, and ignorant that Wall Street became just as cozy with risk. Lehman Brothers and its ilk posted leverages (or the debt to equity ratio) of $30-plus to $1, and the notion that these investment firms, which were in the midst of accumulating massive annual profits (and bonuses for its executives), heeded any attempt to self-regulate proved farcical.
So yes, while that waitress accumulated homes (a fictionalized anecdote that borrows heavily from Michael Lewis’s The Big Short, which recounts a similar—but not exact—instance), Wall Street was creating—and profiting spectacularly off of—the vehicles that allowed people to gamble so recklessly. The events of 2008 were the result of one massive feedback loop: the embrace of a free market economy led to lax oversight of financial firms, which enabled banks to pursue strategies that would lead to tumescent payouts. As the housing market was seen as the bedrock of the American economy, those strategies sought to commercialize that stability, and thus complex and complicated securities and derivatives like CDOs, MBSs, and CDSs were born; everyone wanted to get rich now, and those catchy acronyms allowed both the American people and banking execs to plunge ahead. Greed on Wall Street fueled greed on Main Street (and vice versa), until the very thing that inflated the bubble—debt—was so overextended that it had no other option but to fail. The illusion couldn’t hide anymore.
Cohn may have been the sanest person in the White House, but that he would lay the blame squarely on Main Street is utterly preposterous, and suggests a lack of nuance and perspective that—ten years after the nation’s economy nearly collapsed—is frightening. In Margin Call, a 2011 film which is arguably the best depiction of the financial crisis, Jeremy Irons plays the CEO of an investment bank that, thanks to the levels of risk it carries on its books, is threatened with extinction. After a 24 hour period in which the firm survives by unloading its risk onto Wall Street (thus eliminating its own exposure but contributing to the toxicity that soon engulfs the financial world), Irons justifies the bank’s actions:
It’s just money. It’s made up. Pieces of paper with pictures on it so we don’t have to kill each other to get something to eat. It’s not wrong. And it’s certainly no different today than its ever been. 1637, 1797, 1819, ’37, ’57, ’84, 1901, ’07, ’29, 1937, 1974, 1987—Jesus didn’t that fuck me up good!—’92, ’97, 2000, and whatever we want to call this. It’s all just the same thing over and over. We can’t help ourselves. You and I can’t control it, or stop it, or even slow it, or even so slightly alter it. We just react, and we make a lot of money if we get it right, and we get left by the side of the road if we get it wrong. And there have always been, and there always will be, the same percentage of winners and losers. Happy fucks and sad sacks, fat cats and starving dogs in this world.
That speech is a perfect encapsulation of what happened in 2008. There is none of this equivocation of whoever deserves a greater share of blame, and Irons’ monologue contains more truth and accuracy than anything Cohn is peddling on his rehabilitation tour.
“I don’t like the way he talks about women, I don’t like the way he talks about our friend Megyn Kelly, and you know what, the politicians don’t want to go at Trump because he’s got a big mouth and because [they’re] afraid he’s going to light them up on Fox News and all these other places,” he said. “But I’m not a politician. Bring it. You’re an inherited money dude from Queens County. Bring it, Donald.”
This was in 2015, a year before the money manager began supporting Trump’s bid for president. But like all Trump hires, there’s almost nothing Scaramucci has said in the past his new boss will hold against him. As White House Communications Director, this is a helpful indicator of how reliable their future statements will be, too.
We asked a few writers and editors to choose some of their favorite stories of the year in various categories. Here, the best in business and tech reporting. Read more…
An adaptation from Michael Lewis’s new book, Flash Boys: A Wall Street Revolt, about high-frequency trading and the rigging of Wall Street:
“As the market problem got worse,” [Brad Katsuyama] says, “I started to just assume my real problem was with how bad their technology was.”
But as he talked to Wall Street investors, he came to realize that they were dealing with the same problem. He had a good friend who traded stocks at a big-time hedge fund in Stamford, Conn., called SAC Capital, which was famous (and soon to be infamous) for being one step ahead of the U.S. stock market. If anyone was going to know something about the market that Katsuyama didn’t know, he figured, it would be someone there. One spring morning, he took the train up to Stamford and spent the day watching his friend trade. Right away he saw that, even though his friend was using software supplied to him by Goldman Sachs and Morgan Stanley and the other big firms, he was experiencing exactly the same problem as RBC: He would hit a button to buy or sell a stock, and the market would move away from him. “When I see this guy trading, and he was getting screwed — I now see that it isn’t just me. My frustration is the market’s frustration. And I was like, ‘Whoa, this is serious.’ ”
Mike: Jeremy and Samson seemed so miserable and I was rooting for them to quit and do something else. But something seemed to be holding them back—they didn’t like the idea of leaving the well-paid jobs they hated for an uncertain future. Which is funny to me, because being worried about an uncertain future is what nearly every college senior on the verge of graduating worries about. Their recruitment into Wall Street sort of allowed them to delay this.
Kevin: And I think in some ways that Wall Street has functioned as a delay mechanism. You don’t have to figure out what you want to be. And I think that one of the smartest things that Teach for America did was make itself a two-year commitment just like the banks, because people who are seniors in college want some kind of certainty. They want to know that they’re not going to be unemployed. These are people who’ve connected all the right dots their entire lives—they are very Type A. And they want to move from institution to institution without a break in the middle and so Teach For America saw what Wall Street was doing, I think—I don’t have any intel—but I think they probably looked at what banks and consulting firms were doing and saying, “two years is about the right amount of time. We don’t have to pay them a ton, but if we promise them that it’ll look good on their resume, that they’ll be able to do whatever they want afterwards, it won’t close off any doors and it’ll give them structure and stability.” And you can see it now: One in every six Ivy League seniors applies to Teach for America—it’s insane. And that’s probably the best proof that it’s not all about the money for a lot of college students, because they’re willing to work for a little bit of money teaching in the Mississippi Delta if it means that they’ll be able to put off some big decisions for a few years.
No doubt you are on your way to one right now: an epic party, a night to end all nights. But will your epic party be as legendary as those thrown attended by Truman Capote, Cher Horowitz, Jay Gatsby, Jordan Belfort, Silvio Berlusconi, or the kids from Saturday Night Fever?
While Jay Gatsby may have spent lavishly, in the end he did it for love; in Martin Scorese’s The Wolf of Wall Street, Jordan Belfort does it all for the money.
Before we were rolling with the homies, director Amy Heckerling had to figure out if Cher Horowitz would totally gag if she had to go to a party in the Valley.
The era of Berlusconi may be at an end, but the legend of this Italian version of Benny Hill will never be forgotten, nakedly chasing after topless nymphettes while running the country into the ground.
Truman Capote kept telling people that he was going to invite everybody to his party at the Plaza Hotel in November of 1966. Guests were required to wear only two colors, black and white, to mirror the ascot races in My Fair Lady. Masks were to be worn by all upon entry and removed only at midnight.
By day, Vincent sold paint in a Bay Ridge hardware store; by night he was the best disco dancer in all of New York City. And in 1977, he would be played on screen by John Travolta in Saturday Night Fever. Cohn, meanwhile, later admitted to making most of the story up.
“The financial services sector as a whole accounts for more than 20 percent of US GDP, and this share has grown by around 10 percentage points since the 1970s. Additional expansion has taken place in the business services sector, encompassing law and accounting firms and other outgrowths of a financialized economy. Overall, it seems reasonable to conclude that Wall Street in its various forms accounts for around 20 percent of total US income, a share comparable to that of the US government.”
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