Back in November the New York Times printed a full-page “who’s who” guide to the bailout introducing readers to a few dozen of the key players — all, without exception, men.
At the time most women took no great offence to this. As Virginia Woolf famously said when declining invitations to volunteer her time during the Depression, women “must not condone this male-made mess.” You break it, you get taxpayers to buy it, the least you guys can do is clean it up yourselves.
But as the months wore on, a few women began gaining notably higher profiles in the epic story of the mess, a few in roles cleaning it up, a few in covering it up, and another handful warning everyone — mostly in vain — about how terrible it was going to be.
Perhaps because there are still so few of them, women who become influential in finance seem to have uniquely revelatory stories — including no shortage of cautionary tales of what happens when women try to “hedge” a firm’s institutional testosterone.
In 2002, Iris Mack, a new analyst at the Harvard Management Company, sent an email to Larry Summers warning him of what she considered to be a sloppily-managed, disaster-bound derivatives trading business. A recent alum of Enron, she knew what she was talking about -- but was nevertheless fired shortly thereafter, and eventually settled with the university.
This year Mack took her story, and the emails to prove it, to the Harvard Crimson in a little-noticed subplot of the saga over the incredible shrinking Harvard endowment. Few media outlets picked up the story; Newsweek killed a planned feature on Mack, but this week's Barron's revisits her story and bolsters it with the insight of her fellow whistleblower, the former HMC tax chief, who said of Harvard's notoriously aggressive money management arm, 'You come from someplace else and realise the place is not normal.'
Mack, now 52 and teaching graduate maths and finance at Embry-Riddle Aeronautical University, was the second African American woman in the history of Harvard to be awarded a PhD in applied maths at the school; we can only imagine what she tells the Alumni Association when they call her for donations.
FDIC chairman Sheila Bair has seen the steepest rise in her stock price since the crisis, but the most outspokenly populist regulator of the crisis has a lot of angry shots talking down her reputation. Tim Geithner reportedly tried to get her ousted, blogger John Hempton wants her indicted, Vikram Pandit hates her, John Dugan loathes her, and someone at the New York Post art department seems to have it in for her, too. And although she's arguably the most powerful woman in the world, the Vogue photo department reportedly nixed her for a profile. (Not that it matters, but this is a better portrait of Bair.)
A former senior adviser to Bob Dole, corporate governance professor and longtime regulator, the self-described 'Kansas Republican' has also made many fans on both sides of the aisle since becoming the first Bush appointee to publicly break with Hank Paulson's policies on housing policy, from House Financial Services Committee Chairman Barney Frank, who recommended her for Geithner's job, to CNBC anchor David Faber and personal finance guru Suze Orman, who donated her spokesman services to the FDIC for some confidence-boosting commercials. Bair was the first regulator to sound alarm bells about the coming crisis, and she's been speaking out about the dangers of unregulated derivatives since a stint on the CFTC in 1993.
We became acquainted with the figure of Laura Pendergest-Holt, the former chief investment officer of the Stanford Financial Group, via this absorbing Texas Monthly story on the Lone Star State's Madoff. Raised in a tiny town of Mississippi, Pendergest-Holt met Allen Stanford's shadowy CFO Jim Davis as a teenager in church, and he groomed her from the age of sixteen to work for the firm.
Promoted to the CIO position at age 31, Pendergest-Holt's meteoric rise at the firm was accompanied by the predictably rumoured six-figure Neiman shopping sprees, $700 bottles of wine, temper tantrums and rumours she and Davis were sleeping together. Few thought she was qualified for the job, but in the end Stanford and Davis demostrated their confidence in her abilities by nominating her for the extra-special assignment of representing the bank in interviews with SEC attorneys -- and thereby becoming the first Stanford executive charged in the suspected Ponzi. She maintains her innocence.
Here's a post that doesn't tempt us even in this job market: running the SEC. And when Obama gave the job to Mary Schapiro in January, many observers were sceptical she was up to the task of restoring the deeply damaged agency.
She came to the post from the financial industry self-regulator FINRA. As FINRA chief she was best known for cracking down on excessive Wall Street parties, a campaign that seemed somewhat hopelessly 'beside the point' in the context of 'Wall Street, excessive things done on.'
But then she took the SEC job -- and almost immediately won plaudits for staffing top positions with respected peers, weighing in regularly and thoughtfully on (though not always in concurrence with) all the administration's regulatory proposals, and bringing the first insider trading case against a trader of credit default swaps. If she seemed almost too ready to take over the place, a GAO report on the SEC under her predecessor Chris Cox sheds some light on this: as it turns out, one of the chief gripes of agency attorneys was that the SEC was so understaffed, and the commissioners so averse to tough enforcement, that they couldn't keep up with the constant flow of tips from…FINRA!
Schapiro, no doubt, had her eye on the regulatory crackhouse on the other end of the Acela tracks for a long time, and she was 'shovel ready' when she got a chance to fix it up.
Elizabeth Warren is the Harvard Law professor who chairs the Congressional Oversight Panel charged with policing the TARP. A friend of Michael Moore and longtime critic of the health care system, Warren is the kind of bleeding-heart consumer advocate right-leaning bloggers love to hate, and she is happy to blog right back at them. Perhaps the staunchest proponent of creating a Consumer Protection Financial Agency, she also works with designated in-house TARP watchdog Neil Barofsky to police the more granular details of warrant buybacks and the like.
Eleven years ago, then-CFTC chairman Brooksley Born campaigned tirelessly for someone -- she wanted it for her agency, but she would have been happy for anyone to have just done it -- to get the authority to regulate derivatives. Bill Clinton now openly admits that his biggest mistake was allowing Larry Summers, Bob Rubin and Alan Greenspan to spend three years bullying her out of the job, in a nasty battle that culminated in a conference call in which Larry Summers bellowed: 'I have 13 bankers in my office and they say if you go forward with this, you will cause the worst financial crisis since World War II.' It wasn't a particularly cerebral debate; as the Wall Street Journal observed at the time, 'the nation's top financial regulators wish Brooksley Born would just shut up.'
Well, they got their wish, along with the worst financial crisis since World War II -- and a few months ago Born got a sheepish invitation to dine with Tim Geithner, whom we don't imagine was accompanied by his mentors Larry Summers and Bob Rubin.
After waiting out the worst depths of the crisis, former Citigroup CFO Sallie Krawcheck is about to tackle one of the toughest jobs in finance: chief of wealth management at Bank of America. This puts her at the helm of Merrill Lynch's massive network of retail brokers, who haven't exactly fallen in love with her already.
Krawcheck's reputation is for being honest -- Fortune once named her the 'last honest analyst' -- and client-focused, and so perhaps unsurprisingly, she incurred the wrath of Citi CEO Vikram Pandit when she attempted to get the bank to reimburse clients for investments they had been peddled under misleading and/or false pretenses. We appreciate Krawcheck's maternal demeanor and soothing voice, which presumably helps inoculate her against the inevitable charges of shrillness and divadom faced by women in such positions of power.
Zoe Cruz was supposed to be Wall Street's first woman CEO, but then she got sacked in a nasty saga that cast her unattractively in the roles of a menagerie of unfortunate female stereotypes. When she called BS on male subordinates, she was 'ballbusting'; when she choked up at work she was accused of being emotionally manipulative.
And when she delivered a speech before management meeting in 2004, according to a juicy New York magazine story, a 'mid-level' employee raised his hand and asked 'Are you high? Because I have no idea what you're talking about.' Like most women whose career paths crossed his own, she was particularly mistreated by Vikram Pandit, but she outlasted him at Morgan Stanley -- only to be unceremoniously dismissed in the spring of 2007 when instructed her trading desk to unwind all their mortgage positions.
Would you believe a woman invented the credit default swap? That and more is in the recently-released book Fool's Gold, but the distinction goes to this special lady, Blythe Masters, a precocious Brit who hatched the whole idea, sort of on the fly during her mid-twenties when her employer, JP Morgan, was looking for a way to loan five billion dollars in oil-spill damage money to its longstanding client Exxon without tying up cash that could be chasing new loans.
Masters came up with the idea of selling off all the risk of the loan to the European Bank of Reconstruction and Development, and after that finance would never quite make sense again. Masters is now CFO at the bank, which has won numerous plaudits for steering clear of the kind of aggressive risks her team's 'innovative' products made possible, whose role she recently defended before Congress, in an appearance that also disclosed that Masters has grown out her hair considerably since this picture was taken.
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