Situational awareness: Morgan Stanley is buying E*Trade for $13 billion. It doesn't seem to have any worries that the Trump administration might have a problem with Wall Street's giants getting even bigger.
There's more about President Trump's attitude to Wall Street in this newsletter. Also: Bloomberg's surprising stance on the same issue; the Boy Scouts of America; a 🔥 new memoir; Scandinavian traffic trends; the hottest stock of the moment; and more. All in
1,860 words, a 7-minute read.
Photo Illustration: Sarah Grillo/Axios. Photo: Chris Graythen/Getty Images
Donald Trump loves Wall Street shenanigans. Companies owned by him have declared bankruptcy six different times, and he was once sued alongside Mike Milken for participating in a scheme to artificially inflate junk-bond prices.
Driving the news: Trump pardoned Milken this week, with an official statement positively gushing over Milken's role in developing the wilder side of fixed-income capital markets.
Context: The pardon comes against a backdrop of aggressive Wall Street deregulation. Trump has defanged the Consumer Financial Protection Bureau, loosened regulations on banks, and given free rein to non-bank entities like insurers, ratings agencies, and hedge funds.
Milken has been determined to engineer this pardon for decades, and he's finally found a president whose fondness for ultra-rich financiers makes that possible. Bloomberg's Max Abelson lists many of them, including Apollo Global Management co-founder Josh Harris, Carlyle’s David Rubenstein, and hedge fund manager John Paulson.
The bottom line: Milken, convicted felon and junk-bond billionaire, is the perfect avatar for Wall Street in the age of Trump. His pardon sends a clear message: If you want to get rich through financial legerdemain, now's the time to do it.
Illustration: Sarah Grillo/Axios. Photo: Mark Wilson/Getty Images
Mike Bloomberg is a former head of equity trading at Salomon Brothers, one of the most aggressive investment banks on Wall Street. (It was immortalized in Michael Lewis' "Liar's Poker.") He also makes billions of dollars from Wall Street clients every year.
Context: Bloomberg this week released a very aggressive plan to rein in the financial sector — one that would be fought vociferously by the biggest clients of Bloomberg LP.
Why it matters: Bloomberg's detailed financial reform policy, released Tuesday, could cost Wall Street trillions of dollars. It's a vision that would not be at all surprising coming from Elizabeth Warren, but that was less expected from an avatar of red-blooded capitalism.
How it works: At the top of Bloomberg's wish list is for banks to hold significantly more capital on their balance sheets. While the policy doesn't specify a number, it does approvingly footnote a paper from the Minneapolis Fed that would end "too big to fail" by raising the so-called "capital requirement" for banks from 13% to as much as 38% for the biggest banks.
Also on Bloomberg's list...
The bottom line: Where Trump deregulated Wall Street, Bloomberg wants to re-regulate it — and he wants to go significantly further than even former President Obama managed with the post-crisis Dodd-Frank legislation.
A darling of the first dot-com bubble, E*Trade was inevitably a victim of the dot-com crash.
Illustration: Aïda Amer/Axios
Donald Trump, when accused of overseeing multiple corporate bankruptcies, famously retorted that he had "used, brilliantly, the laws of the country." It seems that the Boy Scouts of America (BSA) were paying attention.
Driving the news: BSA filed for bankruptcy protection this week, Axios' Courtenay Brown reports, with the sole purpose of relieving the legal pressure it faces from sexual abuse victims.
Why it matters: Bankruptcy means that a judge will put a ceiling on how much BSA will pay to victims. The proceedings could limit the degree to which local councils’ billions of dollars' worth of assets can be awarded to victims.
Context: The 100-year old organization is facing 275 lawsuits, and expects thousands more claims to be filed.
How it works: Organizations can turn to bankruptcy courts when facing a monsoon of lawsuits from corporate wrongdoings. Examples include...
By the numbers: BSA is solvent.
The bottom line: One lawyer told the New York Times this strategy is similar to the Catholic Church, whose dioceses — not parishes — filed for bankruptcy protection in an attempt to protect parishes’ assets. (It sometimes worked.)
Book cover via Penguin Random House
Susan Fowler burst onto the public stage in February 2017 with the most momentous blog post in the history of the internet.
Fowler went quiet after her blog post was published. But now, three years later, she's back with a memoir, "Whistleblower," that deserves to start a new conflagration of its own. This time, the system being indicted is not Uber, or even Silicon Valley more broadly, but the entire American patriarchy.
Fowler is a truly extraordinary woman. As a girl born into deeply religious poverty, she home-schooled herself through high school while being allowed "no female friends who did not go to church, no male friends whatsoever, and certainly no boyfriends."
She fought her way into Arizona State University and then the University of Pennsylvania through the sheer force of her thirst for knowledge, but continued to encounter appalling sexism.
Unable to remain in academia, Fowler went to work as a software engineer in Silicon Valley, but the sexism persisted — first at Plaid, then at PubNub, and then, famously, at Uber.
While the media narrative is dominated by #MeToo stories of sexual assault, "Whistleblower" masterfully pulls back the camera.
The bottom line: Fowler's left arm is tattooed with a phrase from Ovid: "Nitimur in vetitum semper, cupimusque negata." American society did its very best to prevent her from succeeding. Her life, and this excellent book, represents her triumph over almost inconceivable odds.
If the rise in Tesla stock this year is incomprehensible, what does that make the rise in Virgin Galactic stock?
Traffic accidents did not kill a single pedestrian or cyclist last year in either Helsinki or Oslo, Axios' Sam Baker writes.
The big picture: The main ingredient in these cities' successes should not surprise you: They made their streets a lot less accommodating to cars.
Denser cities have an inherent advantage in walkability, and older cities often have more rail infrastructure. But Helsinki also employed plenty of modern interventions that other cities can learn from, Streetsblog notes.
Go deeper: In a study published in January, an international group of researchers studied the road and transit layouts of nearly 1,700 cities, breaking them down into nine types to analyze their safety.
The bottom line: "The best approach is to get people out of cars in the first place, and to design cities in ways that people are using motor vehicles less," one of the study's authors told Fast Company.
Photo: Daniel Zuchnik/WireImage via Getty Images
Warren Buffett will release his annual letter to investors on Saturday, alongside Berkshire Hathaway’s earnings report, Courtenay writes
Photo: Hu Huhu/Xinhua via Getty
The one part of the Chinese economy that's booming right now is hospital construction.
The bottom line: When China wants something done fast, all financial and bureaucratic constraints can magically disappear — to the point where authorities can build an entire hospital in less time than most architects would spend on an initial site visit.