Mainly a crisis produces losers. Those who were previously thought to be geniuses, standing above everyone else, are exposed, and brought down to earth.
This recent crisis has been particularly nasty, bringing down politicians, bankers, traders and businessmen of all stripes.
But as always, an elite group has emerged from the crisis with even more power and prestige than they had before. Some grew wealthier. Others became more prominent voices. And still others just consolidated their power.
Prior to March, 2009, few folks had heard of Doug Kass. But right at the bottom, he said the stock market was at an 'intergenerational low,' and boy did he nail it. Since then, he's had some missteps in the media, calling the rally over prematurely. But he's still a beloved figure online and on CNBC. When Kass speaks, people listen.
If there's any swagger left on Wall St., Jamie Dimon has it. Widely hailed as a remarkable survivor of the financial crisis, JPMorgan's CEO is perhaps the most admired man in finance, mostly for avoiding bad subprime bets.
Dimon has already repaid the $25 billion in TARP funds JPMorgan received, and says the emergency loan wasn't necessary. Despite significant write-downs, the now-second largest bank is relatively strong after buying Bear Stearns and Washington Mutual at firesale prices.
Unlike fellow survivor Goldman Sachs, JPMorgan is one of the few banks in the good graces of Washington and the media.
Billionaire hedge fund manager John Paulson has the distinction of having predicted the mortgage market crash in 2007 and the collapse of banks and financial firms in 2008. He reportedly made $2 billion in 2008 on those bets.
Recently, Paulson & Co. bought big stakes in Citigroup (C), Bank of America (BAC), along with other inflation bets like gold miners and real estate.
Sallie Krawcheck had a messy separation from Citi last September. But her last minute advocacy of having Citi pay off customers who bought toxic auction rate securities from the bank helped put her in a positive light. Brokers cheered her advocacy of long-term customer interest over short-term gains.
Last month she was tapped to run Bank of America's brokerage business, which is largely made up of the former Merrill Lynch operations. The job is a huge challenge because Merrill has been a mess for years and is still in the midst of a culture clash as it struggles with the Bank of America merger.
As head of the suddenly powerful FDIC, Sheila Bair is now one of the most influential women in the world (#2, according to Forbes).
During the Bush administration, she was marginalized as one who was not a team player. But she's hung on, and with so many small banks failing, her responsibilities and influence have only grown. She has the power and stature to thwart many of Obama's desired regulatory reforms.
The new SEC boss, Mary Schapiro comes in with a big mandate -- and big pressure -- to reform the struggling agency and improve financial oversight.
Unanimously confirmed by the U.S. Senate, Schapiro is the first woman to serve as the agency's Chairman. Her bi-partisan background as CEO of FINRA, Chairman of CFTC and as an SEC Commissioner positions her well to reform the regulatory body that missed much of the financial crisis causes and fraudsters like Bernie Madoff and Allen Stanford.
Fed Chair Ben Bernanke recently won Obama's endorsement for a second term in his role. He has his critics, to be sure, but the man has spent his entire career studying the depression, and it seems to have paid off, as Bernanke helped bring us back from the brink of disaster -- at least for now.
James Douglas, the governor of Vermont, helped the state largely avoid the sub-prime debacle and maintain the lowest foreclure rate in the country.
While strict mortgage-lending laws were in place before he took office and they came at a cost -- less home ownership and slower economic growth -- the state's conservative rules, as WSJ notes, 'largely prevented the state's residents from signing the types of dubious home loans written in other markets across the country.'
As the Republican inaugurated in 2003 told the Journal: 'We generally do often lag the national economy -- both up and down,' said Republican Gov. James Douglas. 'We don't benefit from the boom times, but we don't fall as deeply into the abyss when things get tough.'
Could Douglas be the Republican Howard Dean, perhaps?
When Apple CEO took six months off from work for health reasons in January, people worried his amazing run was over. But Jobs is back after a successful liver transplant.
Not only is he back physically, but he and his company showed that you can sell a premium product, and still dominate during a weak economic period.
More than two years after its introduction, iPhone is still the product to beat in the mobile market, and he's in the final stages of designing the next super-product, a jumbo sized iPod touch, that has fanboys aflutter.
One of the few success stories out of Detroit recently is Ford CEO Alan Mulally. Ford is the only major U.S. automaker to avoid bankruptcy and increased production recently as Washington's cash-for-clunkers program boosted demand.
As a recent Fortune profile says, 'Ford's financial independence is largely due to a new operational discipline that Mulally has installed, as well as some timely strategic moves he initiated.' By timely strategic moves, they basically mean that he raised more debt when the market was still open to carmakers.
The disgraced former New York governor is on the comeback trail!
Since a brief post-prostitution-bust silence, he's taken to commenting in the media on the financial crisis, skewering Goldman Sachs, the AIG bailout and others in the Washington Post, Slate; appearances on MSNBC; and an interview with our very own Henry Blodget.
The New York Post keeps saying he wants to be governor again. Watch out.
Like his predecessor in the New York AG slot, Andrew Cuomo came in with big ambitions to be a bulldog reformer. But what would be his cause? The financial crisis and Wall Street bonuses turned out to be the answer. Cuomo has been relentless in going after Bank of America and Merrill Lynch over the bonuses they paid last year. And the public loves this stuff, putting Cuomo in a good position to advance to higher office.
New York City's super-mayor, Mike Bloomberg, appears to be a lock for a third term come November.
The billionaire former media mogul has plenty of critics, but has won praise for improving schools, reducing crime, and helping hard-hit New York push through the recession.
And despite staying out of the 2008 presidential race, he's close with Washington's elite, including Barack Obama.
Have you heard of Andy Beal? Probably not, and that's just the way he likes it. The Dallas banker, best known for playing poker for the highest stakes against the pros, stopped lending during the boom, and has started again during the bust. He's a true contrarian. And though he gets no media love, his power has grown simply due to his financial position.
Citi trader Andrew Hall is at the centre of a controversy over whether he can get the $100 million that's owed to him by the zombie bank. He's already wildly rich and lives in a castle. Most likely, he'll be leaving Citi shortly, and given his track record, will be able to write his ticket anywhere he wants.
Now more than ever, Wal-Mart's low prices -- from legendarily lean operations -- is appealing to consumers.
At the helm is CEO Mike Duke, whose painless transition from Lee Scott helped the world's largest retailer seize the recession's opportunity. Indeed, 2008 was a horrible year for stocks, but Wal-Mart managed to be the Dow's best, rising 18%.
And there's probably plenty more to come -- as Duke recently said at a company meeting, Wal-Mart has 'more opportunities today than ever in its history.'
If there was any clear corporate winner of the recession, it was McDonald's.
CEO Jim Skinner already deserves plenty of credit for moving the company away from the unattractive images portrayed in 'Super Size Me' and 'Fast Food Nation.' But McDonald's performance in the recession was even more remarkable: sales growth in 2008 surpassed the previous two years; the fast-food giant opened nearly 600 stores; and same-store-sales have increased in each of 2009's first seven months. That type of perfomance also made it one of the recession's best performing stocks.
As The Big Money's Daniel Gross says, the Golden Arches was 'chief among the Great Recession's winners.'
Every Ivy League school with a fat endowment has seen theirs shrink, forcing the schools to come begging to Alums for more donations. But the hot schools of the boom, like Harvard, have been whacked horribly, taking huge losses on PE stakes. Penn, meanwhile, whose Chief Investment Officer Kristin Gilbertson has done far better than most, minimising its losses by using conservative strategies.
Short sellers have been demonized during much of our financial crisis. But Jim Chanos, the founder of the world's biggest short selling firm, hasn't run for cover. Instead, he's become an advocate of financial reform and an adviser to policy makers.
Last year, as legendary funds such as SAC Capital and Citadel stumbled, Chanos's short positions reportedly earned him a return of 50 per cent. The latest intelligence says that where many other funds have suffered outsized redemptions, his firm is doing well despite the broader market rally. Indeed, insiders at Kynikos (greek for 'cynic') say that the market rally is viewed within the firm as a terrific opportunity for putting on short positions.
Now, when Harry Markopolos talks, people listen.
The once-ignored Bernie Madoff whistle-blower got a ton of credibility when his warnings to the SEC played out exactly as he had predicted -- and feared.
Now, Markopolos is warning that CDS fraud will make Madoff look 'small-time.' We assume regulators are taking note.
The brash billionaire and Dallas Mavericks owner was vindicated in July when a federal judge dismissed the SEC's insider-trading case against him.
Now, the outspoken HDnet founder famous for yelling at NBA refs has a new target: short-term financial traders. Taxing them at higher rates is an increasingly popular argument, but as usual, who knows if anyone is listening to Cuban's blog rants.
Frank Quattrone was one of the poster-bad-boys of the dot com bubble. But nobody disputes his strategic chops, and he's since come back with his own firm -- Qatalyst -- through which he advises clients like Google. Once again, he's benefiting from the overall market collapse, which makes those involved in the last bust look like choir boys.
Gregory Reyes was supposed to be the Bush Administration's poster child for a options back-dating prosecution. A once swaggering billionaire CEO of Brocade Communications, Reyes resigned in 2005 when the SEC and DOJ started investigating.
But a US Circuit Court of Appeals judge just threw out the verdict -- He was to be sent to jail for 21 months and pay $15 million in fines -- vindicating Reyes consistent claim of innocence.
Congressman Alan Grayson (D-FL) has emerged as one of the most popular politicians among those frustrated by the endless bailouts and second-chances for Wall Street. He's been a fierce critic of TARP and the Fed, asking probing questions during hearings, which have received endless play on YouTube.
Elizabeth Warren chairs the Congressional Oversight Panel for TARP, making her one of the most powerful women in Washington.
Warren is also a professor at Harvard Law and has written eight books and more than a hundred scholarly articles dealing with credit and economic stress. Her latest two books, The Two-Income Trap and All Your Worth, were national bestsellers. She also serves as a member of the FDIC's Commission on Economic Inclusion.
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