2011 was the year of people power; whether it was the Arab Spring, Occupy Wall Street, recall elections or MF Global customers fighting against the big banks, people demanded to be heard and called for change. Here’s our second annual selection of who and what we saw as the most influencial shapers of events and trends in 2011.
POLITICS
BARACK OBAMA, President of the United States. It was a tough year for the president as he fought the new Republican majority at every turn. But he also okayed the operation to kill Osama Bin Laden and led the coalition that removed Muammar Gaddafi.
TEA PARTY FRESHMEN, new Republican reps. Rarely do newly elected Congresspersons control the legislative agenda, but every time the Republican leadership hinted at compromising with the president, these all-or-nothing freshmen resisted, nearly pushing the government into default.
PAUL RYAN (R-Wisc.), Chairman of House Budget Committee. Ryan played a prominent public role in drafting and promoting the Republican Party’s long-term budget proposal. He introduced the plan, "The Path to Prosperity," in April 2011 to counter the budget proposal of President Obama. It went nowhere.
ANGELA MERKEL, Chancellor of Germany. As the Eurozone debt worries grew, Germany became perhaps the only healthy economy in the Eurozone and Merkel’s power to set the bailout agenda grew.
GOV. SCOTT WALKER (R-Wisc.) & GOV. JOHN KASICH (R-Ohio). Fresh off the GOP landslide in 2010 and perhaps misreading the breadth of the Tea Party movement, these newly elected governors overplayed their hand in restricting the bargaining rights of public employee unions. They appear to have awakened the sleeping giant of labor and both face recall elections.
CHINESE GOVERNMENT. Chinese leaders were more assertive in 2011 as the rest of the world looked for help while criticizing them for human rights and trade policy. Proof can be seen in a Dec. 27 decision by the Treasury to not label China as a currency manipulator.
EVENTS
MF GLOBAL BANKRUPTCY. The eighth largest futures commission merchant and eighth largest bankruptcy of all time shook our industry to its core.
DEBT CEILING DEBATE. If there was one issue that showcased how polarized American politics have become, it was the debate over raising the debt ceiling. Washington’s handling of the situation even prompted S&P to downgrade U.S. debt.
EUROZONE DEBT CRISIS. What began in Greece quickly spread throughout the Eurozone. Rather than staying confined to the PIIGS (Portugal, Ireland, Italy, Greece and Spain) now even Germany and France are feeling the pain.
JAPANESE EARTHQUAKE/TSUNAMI. The 9.0 magnitude earthquake that hit Japan on March 11 and triggered 30-foot high tsunamis impacted more than just the Japanese economy. Immediately after, it sent the yen to record levels, and affected uranium and diesel fuel markets after the nuclear disaster at Fukushima.
OCCUPY MOVEMENT. Some may say this movement petered out with the onset of cold weather, but despite all its warts it’s hard to argue with the overall premise behind it — people are struggling in the global economy and those that caused this crisis, the richest 1%, have not been held accountable and actually have been subsidized by the rest of us. As long as that remains true, the movement will not go away.
REGULATORS
GARY GENSLER, Chairman of the CFTC. Gensler without question is the most high-profile CFTC Chairman in history and would have made this list for his efforts to roll out Dodd-Frank rules amid efforts to reduce or kill the Act. However, he also makes it for the odd non-recusal recusal in the MF Global affair and his agency’s abdication of responsibility.
MICHAEL DUNN, retiring CFTC Commissioner. The lame duck commissioner wielded much power as the swing vote on the CFTC’s proposed commodity position limits. In the end he voted for the proposal despite registering strong misgivings over its efficacy and acknowledging it represented misplaced priorities.
FINRA/SEC (MF Global B/D regulators). Although we still are piecing together what happened at MF Global, we do know that Finra made the firm reveal its foreign sovereign debt positions and required it to post additional capital, leading to credit downgrades and MF Global dropping below minimum capital levels.
JAMES GIDDENS, MF Global Inc. liquidation trustee. Giddens, fresh from his profitable work as the Lehman Brothers’ bankruptcy trustee, raised the ire and suspicion of former MF Global customers who suspected he was in it for fees. Giddens got off to a slow start but through prodding by the Commodity Customer Coalition and CME Group guarantees, distributed close to 72% of customer equity by year-end.
FED CHAIRMAN BEN BERNANKE & FOMC, Improved transparency. Under Bernanke’s leadership, the FOMC has made strides to become more transparent. Part of that new transparency included fleshing out its “exceptionally low rates for an extended period” language to mean until mid-2013.
DODD-FRANK ACT IMPLEMENTATION. Although it was passed in 2010, many of the Act’s provisions were supposed to go into effect in 2011. Most of those deadlines have passed, with many rules still not implemented. Further slowing progress, some rules already finalized are beginning to be challenged in court.
MARKETS/EXCHANGES
JON CORZINE, MF Global Chairman & CEO. The former Goldman CEO, New Jersey governor and U.S. senator built up a huge proprietary position in European debt in his desire to turn MF Global into an investment bank, and stubbornly hung on to it in the face of regulatory warnings. By the time he began to unwind it, it was too late to save the firm or his reputation.
JUDGE JED RAKOFF, Federal District judge for Manhattan. Rakoff rejected an SEC settlement with Citi over negligence charges related to mortgage-backed securities. The judge in 2009 rejected an SEC settlement with Bank of America and has challenged the SEC’s practice of allowing banks to pay a fine and not have to acknowledge any wrongdoing.
TERRY DUFFY, Executive Chairman of CME Group. Duffy managed to make the MF Global hearings interesting by sharing some damaging information on what Corzine allegedly knew regarding account transfers. While Duffy was more forthright than others and CME Group put up $550 million to expedite distribution of customer funds, CME Group does not come off untainted.
OTHER
WARREN BUFFETT, Chairman & CEO of Berkshire Hathaway. In addition to asking Congress to tax him more in a New York Times op-ed, Buffett also single-handedly propped up Bank of America (BoA) with a $5 billion investment. The vote of confidence came after BoA reported an $8.8 billion loss the previous quarter.
RAJ RAJARATNAM, founder of Galleon Group. Rajaratnam was arrested in October 2009 for insider trading. On May 11, 2011 he was found guilty on all 14 counts of conspiracy and securities fraud. He was sentenced to 11 years in prison and fined $92.8 million.
MUHAMMAD AL BOUAZIZI (Arab Spring). Al Bouazizi, an unemployed college graduate who started a business selling produce in his Tunisian town, reached his limit when his small business was closed by police. He literally set himself on fire in December 2010 and figuratively lit the fuse of a movement that has toppled three Middle Eastern governments so far. Al Bouazizi died 18 days after the incident.
JAMES KOUTOULAS, co-founder of the Commodity Customer Coalition. Angered over seeing his MF Global accounts frozen and the lack of response by industry leaders, Koutoulas offered his services to former MF Global customers and created a coalition that arguably has done more to get customers their money back than anything else.
SOCIAL MEDIA. Influential events were transformed and sometimes created by the power of instant communication among groups of people in new and exciting ways.
