What's Changed Since the 2008 Recession?
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What questions frame the episode about changes since the 2008 recession?
Your Money Briefing. Money and Market Stories from the Wall Street Journal. I'm J.R. Whalen in New York. What's changed since the end of the financial crisis in 2008? What's stayed the same? We'll take a look in a moment, but first, these money items you need to know. U.S. consumer confidence fell in March, dragged down by consumers' perception of current and and future economic conditions in light of recent stock market gyrations. Tuesday's report showed consumers remained optimistic toward the state of the labor market, which has shown strength recently with the unemployment rate parked at a 17-year low and the economy adding jobs at a steady pace. Banks can expect to see significant further relief from post-crisis rules in 2018 after the final Trump-appointed leader is seated at the nation's banking regulators later this spring.
What are the top current money headlines listeners need to know?
Jelena McWilliams is currently set to take over the top spot at the FDIC. And when that happens, the FDIC, the Federal Reserve and the Office of the Comptroller of the Currency We'll be able to move ahead on things like adjusting capital and liquidity requirements, also easing restrictions on short-term consumer loans, and relaxing the so-called Volcker Rule, which bars banks from speculative trading or buying into potentially risky investment funds. And U.S. investment banks in London have some of the biggest gender pay gaps in the country, reflecting long-established cultures of men dominating the top trading and advisory roles and women working in junior posts or as administrators. Women are paid about half as much as men in the main U.K.
investment banking units of Bank of America, JPMorgan Chase and Morgan Stanley, marking the widest gaps among around 40 global financial companies that have reported pay data to the U.K. government. All three banks pledged to improve the figures by supporting and encouraging women to climb their way to senior positions and welcoming back women who leave the workforce to have children. This is your Money Briefing from The Wall Street Journal. Welcome back, everybody. Almost daily stock market volatility. A new president some say is untested in the face of economic uncertainty. Cries of income inequality. That's not necessarily today's news. That was the state of the country 10 years ago at the end of the financial crisis.
Wall Street Journal reporter Cesare Podcol joins us to look back and look ahead. So, Cesare, in 10 years, the stock market has seen an astronomical run-up. But it's interesting that bank stocks were stuck somewhere between neutral and drive today. until President Trump took office.
Yeah, it's a very interesting chart.
How did bank stocks and regulation shift after the 2008 crisis?
They were kind of lagging the overall market, and then President Trump got elected promising to take apart the Dodd-Frank financial overhaul bill that Congress put in place to deal with many of the excesses from before the financial crisis. And once that happened, bank stocks had a big pop, and now they're above where they were as of early weight.
But the big banks are still very powerful, and many feel they did not learn lessons from essentially looking death in the face and paying $110 billion in penalties and then reforming their ways.
Yeah, certainly you can make the case that the big banks are more powerful in Washington than ever. I mean, some of the highest echelons of government are now filled with former employees of firms like Goldman Sachs and the revolving door, which was always a problem in Washington, seems to be spinning faster these days. So we detailed that in our comparison of where we are 10 years later. And so, yeah, there's people like Phil Angelides who chaired the official government inquiry into the causes of the financial crisis who say that this is not an industry that has really examined itself and changed its ways in fundamental ways. In many ways, it's sort of business as usual on Wall Street and in many ways in Washington.
Now, you could say looking at 2008 versus today, the more things change, the more they stay the same. A lot of money's flooded the market and the economy, though the recovery has really been uneven since 2008.
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