Photo Illo: Ed Johnson

Like sands through the hourglass, these are the days of our lives. Is that show even on TV anymore? And if it is, are Bo and Hope still together? (Note to self: ask Mom.) Meanwhile, on to another long-running melodrama, the madcap saga we call the market. Where will the Street lead us in 2013? One thing seems certain: it’s going to be a bumpy ride. It always is. Herewith, a few predictions for the year ahead.

Lloyd Blankfein, CEO of Goldman Sachs, will retire and be replaced by Gary Cohn.

You heard it here first. Actually, no you didn’t.But let’s put a date on it just to show that the Up and Down the Street team has predictive powers that go beyond the norm: the firm’s annual meeting will be in May, so Mr. Blankfein will announce the succession on April 15. Any questions?

Steve Cohen, overlord of SAC Capital, will take his leave too.

He knows the Feds are coming for him. He also knows that SAC’s code of employee omertà is beginning to crumble. It won’t take too many 10-year jail sentences to make those canaries start singing. If Mathew Martoma wants to go down as a martyr, that’s his choice, but as more indictments come out of the U.S. Attorney’s office, as seems likely, you can be sure that someone is going to find a plea bargain mighty attractive. Time to claim victory and retire, Stevie. (He also hates that journalists use the name “Stevie,” another motivation to hang up his spurs. My brother Steve, on the other hand, likes the name Stevie. More from him later.)

One who will hang on: Jamie Dimon.

The naive among us thought that whole “London Whale” episode might signal the end of Mr. Dimon’s grip on JPMorgan Chase. Not a chance. He’s a charming guy, that’s for sure, but Mr. Dimon can still throw underlings overboard with the best of them. Happy retirement, Ina Drew! There was a time when he wanted to be Treasury secretary. That time has passed. He’s going to stick around JPMorgan Chase for a while. Did I mention that my 2009 book about Mr. Dimon was called Last Man Standing? And that once Lloyd retires, he will be exactly that? Just saying. (I was informed by my periodontist the other week that his favorite teacher was Ina Drew’s husband. I promised to send him a copy of the book if he took it easy on my gums. No such luck for me. And no book for him.)

Wall Street and corporate America will finally get over their pouting and get back to the business of making money.

There is perhaps nothing I am looking forward to more in 2013 than a quieting of all the whining and moaning from the some of the richest people in this country about Barack Obama’s willingness to throw them under the rhetorical bus whenever it came time to rally the faithful. (Chrystia Freeland said it best.) It’s almost as if they’d never experienced a campaign season before! What’s more, his actions belied the strongest of his words. The president backed unprecedented government bailouts, which kept both Wall Street and the economy itself in business. He also kept global bond investors calm enough about the state of corporate hegemony in the U.S. that borrowing money on a large scale has never been cheaper. And the IPO market remains open, if not necessarily robust. So what’s the problem? Nothing but the hurt feelings of a bunch of people whose self-pity is nothing short of grotesque. I mean, seriously, Leon Cooperman. WTF? I hereby predict that everyone is going to take it down a notch over the next 12 months. Obama doesn’t need to demonize them anymore, and fractional tax hikes won’t take away their hard-earned piles of money. (Bonus prediction: the term “job creators” will be retired forever. Actually, that’s not a prediction but a wish. Pretty please?)

Gun control will go nowhere in Congress, but the market will speak.

As demonstrated incontrovertibly by the batshit-crazy Wayne LaPierre, the NRA will spend 2013 using its lobbying power to keep ridiculous weapons on the streets of America. And Obama will chicken out on serious gun control. But I see some cause for optimism. Although capitalism has showed more than enough of its dirty underside in the last half-decade, the market can also be a force for good. Consider this: With the surprising news that private equity powerhouse Cerberus Capital Group intends to unload its stake in gun maker Freedom Group (a wonderfully exasperating name), there is hope that a more powerful force than the NRA—i.e., the profit motive—could turn against our out-of-control gun culture. If big money shuns big gun makers, those gun makers will find their cost of capital on the rise. Investments in future production will drop, and maybe the next generation of schoolkids will be a little safer. Sure, somebody will fund the Masters of War. But it’s still going to be more expensive for them to do business. Which is change on the margin—probably all we can ask for.

Walmart and the Justice Department will collide for real.

I don’t know about you, but I find the sestoriesabout Walmart and the bribing of Mexican officials pretty shocking. And I don’t shock easy, especially when it comes to the morality of the Beast from Bentonville. According to recent news reports, both the Justice Department and the Securities and Exchange Commission are looking into whether the company violated the Foreign Corrupt Practices Act. Here’s my guess: yes, they did. But I’m no lawyer. Walmart has been reassigning various lawyers internally to show that it’s taking the investigations seriously. But things won’t get really interesting until some actual charges are filed ... this year.

The value of Facebook will remain a matter of hot debate, along with the value of you and me.

Remember the Instagram scandal in December? When everyone lost their minds over the possibility that Instagram was considering using their photos as advertisements—and usage droppedby 25 percent? While I do understand the outrage from a pure privacy standpoint, I think people really do need to get a grip. Did you really think that your photos were going to be sold as ads? Sorry, Fabio. At some point, delusional technology investors are going to realize that the fact that every aspect of our lives is being collected bit by bit doesn’t necessarily mean there’s any value in your status update or the number of “likes” elicited by some picture of a baby. Because really, people, what’s a digital life worth anyway? I asked my brother, an artist who lives in rural Ontario, what price he’d place on his own. “Anyone can have everything I have ever posted or will ever post on Facebook for $5,000,” he offered. (Ping me for his contact information.) Sure, I get the whole targeted advertising thing. And yes, I get that some people actually do click on banner ads, although I don’t think I’ve ever met anyone who didn’t do so by mistake. But at some point people will realize that the value of Facebook and its ilk has been one big digital hustle.

Apple will do something in 2013. And the stock market will do something else.

What? You want more specifics? Please. Despite my own recent rantings on the subject, Apple is a hothouse of creativity and market power, it has an almost unsurprising ability to surprise us. It will do it again. And the stock will rise as a result. And then it will fall for some other reason. Or something like that. Given the company’s bellwether status, that means that the stock market itself will also rise at points during the year and fall at others. I can’t offer you more details than that, because I save those for my $2,500-a-year investment newsletter, which I send out right after I finish this column. Actually, no I don’t. But if you really want a stranger’s advice, there are plenty of those newsletters eager for your business. (Ancillary prediction: investment newsletter sales will remain robust despite an utter lack of value within.)

The money will start flowing again.

There is more than a trillion dollars of cash sitting unused on the balance sheets of U.S. companies. If you don’t believe me, believe Lloyd Blankfein, who wrote about it in a November Wall Street Journal editorial. But the election is over. The time for whining has passed. Our swan dive over the fiscal cliff will have a surprisingly soft landing. Corporate paymasters are going to start spending again in 2013, if only for the simple reason that they’re bored with not doing so. Well, that and the fear that everyone else will, which is the greatest motivator of all. (Only don’t expect Mr. Blankfein to be around to help Goldman’s clients figure out how to spend their money. He’s retiring on April 15, remember?) So things are going to pick up this coming year, both for employment and the economy as a whole. Call me crazy, but I say I’m just an optimist. Happy New Year!

editorial@observer.com

The banks said it would waive or credit certain fees incurred between tonight and Wednesday, Oct. 31. for customers in Connecticut, Delaware, Maryland, New Jersey, New York, Pennsylvania and Virginia, as well as the District of Columbia. Those fees include late charges on credit cards, mortgages and student loans, and overdraft and fees for insufficient funds on deposit accounts.

And so, debtors and deadbeats, underwater(!) homeowners and starving students, take ye down to the Subway Inn and have a round or three on Jamie.

Four executives have departed from the firm's 15-member operating committee in the last year, including, of course, Ina Drew, the firm's former chief investment officer who fell on her sword following the multi-billion trading loss associated with the London Whale. In the shake up that followed, younger executives Mike Cavanagh and Matt Zames rose to new prominence, while Jes Staley, once thought to be a possible successor to Jamie Dimon, went off to audition for Barclays top job.

Then Barry Zubrow, the firm's head of regulatory affairs and former chief risk officer, said he would retire at the end of the year, followed by a Wall Street Journal report on Wednesday that chief financial officer Doug Braunstein would exit his current post for a new role at the bank sometime over the next two quarters.

Fortunately for the kibbitzers among us, JPMorgan had a conference call to discuss third-quarter earnings scheduled for the this morning.

"I find it truly irritating that people yak to the press like that," Mr. Dimon said when asked about Mr. Braunstein's future at the firm. "Doug is a top CFO, we will let you know when and if he moves on, not through gossip and the press."

And so we thought that was that, at least for now, until the end of the call when Mr. Dimon was asked whether he had any closing comments.

"I'm surprised no one mentioned how handsome Doug Braunstein looked in the Journal," he said.

Mr. Lee.

Two giant JPMorgan profiles landed this week, and it was a familiar character who delivered some of the more memorable lines in each of them. James Bainbridge Lee Jr.—better, Jimmy—is the legendary deal maker this paper once described as "the maestro of the syndicated loan market, Wall Street’s most famous corporate bailout artist," now the vice chairman for investment banking at JPMorgan.

That position—and, we suppose, that he was willing to pick up the phone and go on record—made him a natural source for Vanity Fair's profile of Jamie Dimon, in which Mr. Lee offers the first (and last?) word on the JPMorgan chief executive ("[He] has moral courage running through his veins”); and also serves as a catalyst for the tidbit VF used to hype the story—in the middle of the hubbub over the London Whale, Mr. Lee asked New England Patriots quarterback to tell Mr. Dimon "to hang in there."Mr. Lee built his career at Chemical Bank, where he leveraged the bank's lending relationships to win investment banking business, became a key figure in the syndicated loans and eventually, leveraged buyouts. Along the way, he happened to work alongside a particularly competent young trader named Ina Drew—which is how Mr. Lee also wound up providing our favorite anecdote in Susan Dominus' 7,500-word New York Times Magazine write-around on JPMorgan's former chief investment officer (and the woman who presided over the $5.8 billion trading loss that led to Mr. Dimon's phone call with a Super Bowl MVP).

James Lee, who eventually became one of the biggest dealmakers on Wall Street, started out at Chemical Bank in New York sitting next to Ina Drew. He remembers talking to a client on the phone one day, trying to answer some questions about a deal the bank was proposing. “So I told the client what I thought, and I’m answering and answering, and I say, ‘So what do you think?’ ” Lee says. But there was no response. Lee looked at the phone and then looked around. Drew, a foot away, was in the middle of a different phone conversation, but her eyes were on him, and she was shaking her head back and forth — no, that’s not right — and waving her hand to show she had something in it: the phone jack. “She heard part of what I was saying, which was obviously incorrect,” Lee says. “She literally pulled the plug on me.”

In an excerpt published today in Forbes, Ms. Bair looks back on the meeting and wonders whether "the mammoth assistance to those big institutions" didn't amount to "overkill":

We used up resources and political capital that could have been spent on other programs to help more Main Street Americans. And then there was the horrible reputational damage to the financial industry itself. It worked, but could it have been handled differently? That is the question that plagues me to this day.

Which is all fine and good, but what you really want to know is what the former banking regulator thought about the bankers gathered at the Treasury. Well, have no fear:

on Wells Fargo Chairman Richard Kovacevich: "[He]could be rude and abrupt, but he and his bank were very good at managing their business and executing on deals."

on Citigroup CEO Vikram Pandit: "Pandit looked nervous, and no wonder. More than any other institution represented in that room, his bank was in trouble. Frankly, I doubted that he was up to the job. He had been brought in to clean up the mess at Citi. He had gotten the job with the support of Robert Rubin, the former secretary of the Treasury who now served as Citi's titular head. I thought Pandit had been a poor choice. He was a hedge fund manager by occupation and one with a mixed record at that. He had no experience as a commercial banker, yet now he was heading one of the biggest banks in the country."

on Ken Lewis: "He was viewed somewhat as a country bumpkin by the CEOs of the big New York banks, and not completely without justification."

on Jamie Dimon: "always the grownup in the room"; "a towering figure in height as well as leadership ability."

on Lloyd Blankfein: "[his] puckish charm and quick wit belied a reputation for tough, if not ruthless, business acumen."

on John Mack: "the patrician head of Morgan [Stanley]"

on John Thain: "Frankly, I was surprised that he had even been invited. He was younger and less seasoned than the rest of the group."

Kweku Adoboli, the former UBS trader charged with amassing a $2.3 billion loss in unauthorized trading positions, goes on trial in London today. He faces up to 10 years in prison if convicted, according to CNBC.

The U.S. Treasury is selling an $18 billion stake in AIG, in a move that would decrease the government's stake in the insurer to less than 50 percent for the first time since 2008.

Investors betting on a U.S. housing recovery are beginning to cash in holdings in shovel-ready residential land. Firms such as BlackRock, hedge fund Angelo Gordon & Co and real estate investment firm Starwood Capital, snapped up property in bankruptcy proceedings, from struggling developers and banks in foreclosure sales, according to Reuters. Now some of those firms are unloading property, often for gains of 20 percent or more.

Commodities giant Glencore has made its final offer for mining company Xstrata, apparently.

SEC Chairman Mary Schapiro would like to complete rule-making on a uniform fiduciary standard, "but Congress handed us a lot of important things to do,” she told Bloomberg.

A U.S. judge barred former Credit Suisse and UBS banker Christos Bagios from leaving Florida to visit family in Switzerland and Greece, according to Bloomberg. Mr. Bagios, who is charged with helping 150 American clients hide as much as $500 million from tax authorities, is currently free on $650,000 bail.

A day after French President Francois Hollande promised to press ahead with a plan to tax on the country's highest earners at 75 percent, LVMH chief executive Bernard Arnault, France's richest man, said he had applied for Belgian nationality. According to Reuters, Mr. Arnault said he would still pay taxes in France.

George Soros says Germany should lead Europe out of the ongoing sovereign debt crisis, or exit the euro zone itself.

How to define 'subprime?' The answer may determine the fate of the government's case against three Freddie Mac executives alleged to have misled mortgage investors.

Citi became the first U.S. lender to issue it's own credit card in China, Bloomberg reports.

George Soros disclosed a 7.85 percent stake in Manchester United, the British soccer club that began trading on New York Stock Exchange on Aug. 10.

Felix Salmon says Man U's fluctuating share price is another good argument to keep investors away from initial public offerings.

The regulator tasked with overseeing audits of brokerage firms such as Peregrine Financial Group, the Iowa-based futures broker that shuttered last month after it's founder attempted suicide, has disturbing news, Floyd Norris reports in The Times. Every audit reviewed by Public Company Accounting Oversight Board inspectors showed a failure to take proper efforts to verify financial statements or ensure that the audited firms had sufficient capital on hand.

Since the London Whale capsized Jamie Dimon's reputation, Wall Street has struggled to put forth a replacement statesmen, according to Bloomberg.

Despite new law that may allow IPO bankers to publish research on offerings they underwrite as soon as, or even before, shares begin trading, banks have informally agreed to a quiet period of 25 days, The Wall Street Journal reports.

In an about face, Warren Buffett's Berkshire Hathaway terminated $8.25 billion in credit default swaps on municipal debt. If Mr. Buffett has doubts about munis, should you too?

Best Buy reported second-quarter profit fell 90 percent on restructuring charges and week sales. Good news for Richard Schulze?

Spain's short-term borrowing costs fell as markets bet that the European Central Bank would intervene in sovereign debt markets.

Vanity Fair

Who is Vikram Pandit?

a) New York banker                                                                          9%

b) president of the Massachusetts Institute of Technology     14%

c) famous British cricketeer                                                              4%

d) celebrity chef and noted author of Delhi does Dallas           3%

e) no clue                                                                                             70%

Who is Brian Moynihan?

a) North Carolina banker                                                             7%

b) Bridget Moynahan’s alcoholic Hollywood dad                  14%

c) disgraced former mayor of Philadelphia                              3%

d) Naked Cowboy of Times Square fame                                   5%

e) got me                                                                                          71%

Who is Lloyd Blankfein?

a) New York banker                                                                      16%

b) the first Jewish mayor of Birmingham, Ala.                       4%

c) U.S. Postmaster General                                                         1%

d) America's second most popular prop comic                      3%

d) don't know                                                                                76%

*It hardly seemed fair to John Stumpf or James Gorman to include either executive in this exercise. **By informal survey, we mean made the whole thing up, primarily as an excuse to imagine for the merest moment Mr. Blankfein bringing his impish  joie de vivre to the U.S. Postal Service and honoring his father's memory by turning around the downtrodden institution.

Diamond of Barclays.

From outside the elite preserves of the financial industry, Britain’s LIBOR scandal follows a wearily familiar narrative arc: Yes, a leading investment bank has confessed to gaming a central borrowing index—the so-called London Interbank Offered Rate, which establishes how much banks charge each other to borrow money. And yes, that bank—Barclays of London—has coughed up 290 million pounds in fines to stave off the prospect of a criminal prosecution. But jaded consumers of financial news can be forgiven for thinking that this all amounts to the perennial status quo for the investment class, in the city and on Wall Street alike. Haven’t these characters always sought to live by their own self-seeking code—and haven’t fund managers long been little more than glorified corruptionists? If we systemically prosecute this sort of behavior, are we just futilely attempting to issue a restraining order against human nature?

In reality, the LIBOR dustup is a very big deal—and largely because of its very routine profile. Barclays has confessed to artificially deflating its LIBOR rate going back to 2005, in an effort to stave off jitters among investors in the bank’s sprawling derivatives portfolio. But the costs of marginal vanity upgrades to an institution’s profitability run very quickly into the billions in a market that covers hundreds of trillions in investments. LIBOR numbers govern just about every sort of borrowing done on a major scale, from bad mortgage bets to the credit default swaps used (delusionally, it turns out) to hedge against them. What’s more, the evidence suggests that conduct of Barclays—one of 16 banks now under investigation, on both sides of the Atlantic, for manipulating its LIBOR numbers—prolonged, in sweeping fashion, the ghastly derivatives bubble that collapsed in 2008. With much of world economy transacting its credit business on artificially swollen bottom lines during those wheezing boom years, the fallout from LIBOR fixing could run easily into the trillions.

The unprecedented scale of the LIBOR scam helps explain the alacrity that British lawmakers and regulators have so far shown in at least creating the appearance of a crackdown. The present drive across the pond to punish the lords of capital comes, we all know, athwart a long-standing culture of impunity in financial matters; the real outrage of jury-rigging the LIBOR is that it exposes the whole global credit system as an exercise in cronyist bad faith. And even symbolic shows of civil authority in the dealings of the city trigger large-scale cognitive dissonance at this point. Robert Diamond, the American head of Barclays, seemed a bit flummoxed to be so suddenly prevailed upon to resign; if Jamie Dimon and Lloyd Blankfein continue to reign securely atop their scandal-rocked investment fiefdoms, why should he be made an example of—especially with some 15 other banking chieftains potentially on the LIBOR make as well? And why should Paul Tucker—the presumptive incoming head of the Bank of England, who has sedulously groomed himself for the top slot since his arrival at the British equivalent of the Fed more than two decades ago—suddenly be dragged before Parliament to find his nomination in jeopardy for little reason beyond a vague impression that he should have done more to hunt down evidence of LIBOR-rigging back in 2007?

In truth, if British authorities were themselves more vigilant, the LIBOR mess wouldn’t have festered on for so long in the first place; a little-noted institutional side benefit of these nine-figure immunity deals that regulators so routinely cut with prosecution targets is that they insulate both the banks and their lax regulatory stewards from unwelcome public scrutiny. But even so, the public outrage stoking the British inquiries makes for an instructive contrast with America’s largely fatalist outlook on financial malfeasance. As Chancellor of the Exchequer George Osbourne announced in a recent speech on the LIBOR scandal before Parliament, “Fraud is a crime in ordinary business—why shouldn’t it be so in banking?”

Why, indeed? In the United States, the long-hapless Commodities Futures Trading Commission has been conducting its own years-long inquiry into LIBOR-fixing and has a grand jury reviewing potential criminal charges. But as Mr. Diamond well knows, these official investigations have a distinctly Potemkin feel in the States: At most, a fine is assessed, and a plea deal entered. Nothing as gauche  as an actual criminal prosecution ever dogs our scandal-plagued investment class, even though maximum-minimum sentences are standard fare in most jurisdictions when nonaffluent citizens commit their own repeat offenses, or run afoul of our draconian drug wars.

Even though England is a far more class-bound social order than ours is reputed to be, it’s clear at moments like this that the American polity has no real stomach for holding our financial overclass accountable to anyone. Indeed, our leaders have precious little real incentive to put the brakes on the stateside regime of banking impunity when financial titans can pull up stakes from their jurisdictions, taking both payrolls and donor rolls with them—even though the anemic condition of our credit and employment economies is largely the handiwork of that selfsame banking sector Better to shunt the whole business over to the largely captive regulatory system, which at least brokers its appointed fines and honors its appointed silence in somewhat decorous fashion. To really get to the bottom of something like the LIBOR cartel, you have to subject a whole culture of corruption to sustained scrutiny—and worse, to work out actual, enforceable measures to prevent it all from happening again. We have, it seems, gone in stunningly short time from a financial order deemed too big to fail to one that is simply too big to care about.

For collateral evidence of this trend, one need look no further than the wheezing machinery of the presidential race. Presumptive GOP nominee Mitt Romney clearly had banked (as it were) on widespread public indifference to financial niceties when he misleadingly claimed that his tenure as CEO at Bain Capital ended in 1999. So what if, as Mother Jones’ David Corn noted, SEC documents clearly listed him as CEO and 100 percent owner of the equity fund as late as 2002—well past the job-hemorrhaging Bain takeover of the GST steel mill in 2001, recently featured in a series of Obama attacks? Who reads SEC filings, let alone their supporting documentation? And until The Boston Globe sleuthed out the damning documentary record last week, Mr. Romney’s bet was bearing fruit; indeed, the same day The Globe story broke, Mr. Romney’s campaign released its own counterattack ad, seeking to refute the GST saga largely on the grounds that the entire deal went down at a time when Mr. Romney was no longer affiliated with Bain.

One little-noted casualty of the LIBOR scandal is Mr. Diamond’s public role as a Romney booster. Diamond had been a major overseas bundler of expat donations to the Romney campaign and was scheduled to host a July 27 fundraiser for Romney during the candidate’s trip to London for the 2012 Olympics. For obvious reasons, Diamond has had to relinquish that high-prestige gig as well. It’s a pity—the two men doubtless would have had a lot to talk about.

editorial@observer.com