I nostri promotori finanziari, i nostri wealth managers, i nostri private bankers, i nostri “consulenti addetti alla vendita”, vengono rimpinzati come le oche all’ingrasso con le pubblicazioni delle grandi banche globali di investimento: gli vengono spinti giù per la gola documenti di Goldman Sachs, di JP Morgan, di Morgan Stanley, di Bank of America, di UBS, di BNP Paribas, e di tutte le altre.

E’ proprio per questa ragione, che poi tutti tutti tutti la vedono alla stessa maniera: è il nuovo “pensiero unico socialista” dei mercati finanziari (perché poi le banche globali ripetono soltanto quello che “non disturba” la Banca Centrale oppure il Governo in carica).

E così che tutti ci crediamo in un medesimo “sol dell’avvenir”, tutti andiamo dalla stessa parte, tutti abbiamo la medesima opinione sul futuro.

Quello che poi mai si realizza.

E’ questa ragione che, nel nostro Blog, sono rarissime le citazioni delle analisi delle grandi banche di investimento. Ed è per questo che, sui portafogli dei nostri Clienti, è rarissimo che noi si faccia ciò che viene suggerito dalle banche come Goldman Sachs, JP Morgan, Morgan Stanley, Bank of America, UBS, BNP Paribas, e tutte le altre.

Oggi, in questo Post, facciamo una importante eccezione, e vi proponiamo un documento di JP Morgan. Perché?

Prima di tutto, perché riteniamo utile e corretto presentare ai nostri lettori, di tanto in tanto, anche l’opinione di chi NON legge i fatti ed i mercati nel modo in cui li leggiamo noi di Recce’d. E poi, in questo specifico caso, perché l’intero articolo, a nostro giudizio, serve a avvalorare la nostra tesi, che la prossima grande sorpresa sui mercati finanziari la vedremo arrivare dal mondo delle obbligazioni e non dal settore delle azioni.

E proprio per il fatto che molti, oggi, stanno ancora allineati dietro a JP Morgan. Incluso il vostro promotore finanziario.

Interest rates relative to inflation aren’t getting back to normal anytime soon.

That’s because institutions, including sovereign reserve managers, commercial banks, and pension funds are buying bonds for regulatory reasons or to match their future liabilities, breaking the relationship between a bond’s price and the underlying fundamentals, according to the newly formed Strategic Investment Advisory Group of J.P. Morgan Asset Management. 

“Central banks have backed themselves into a corner from which they will be unable to retreat,” according to the group's inaugural research publication. “The bond vigilantes are now outgunned by the bond pacifists.” The Strategic Investment Advisory Group is made up of the firm’s veteran CIOs, portfolio managers, and strategists, across asset classes and is chaired by Michael Cembalest, chairman of market and investment strategy. 

In the report, called “Getting Real About Rates: the post-war era of substantially positive real interest rates may be gone for good,” the manager detailed the reasons why the low or negative real interest rates are likely to persist for a long period of time.

For example, a weak recovery from the pandemic and an extended period of financial repression have forced real interest rates to deviate from where the Federal Reserve wants them to be. In the long term, the lack of a young workforce makes it hard for the U.S. government to reduce the current debt burden, which is conducive to depressed interest rates.

To adjust to the prolonged low-interest rate environment, institutional investors should consider investing in securitized credit, equities, and real assets, according to the report. 

For fixed income investors, the traditional strategies that protect them from inflation, such as the treasury inflation-protected securities, are “less likely to work well today because they are offering low or negative real yields,” according to Jared Gross, head of institutional portfolio strategy at J.P. Morgan Asset Management. Instead, portfolio managers with the obligation to invest in fixed income should consider securitized credit backed by assets like cars, real estate, and mobile phone contracts because they are “linked to the health and credit of the American consumers.”

“We think the consumer balance sheet right now is quite healthy,” Gross said. “So securitized credit is a very interesting opportunity.”

Gross also noted that the current low-interest rate environment has made value stocks more attractive than growth stocks. In particular, companies with utility-like characteristics, such as wireless carriers and telecom companies, are a good source of return because their stock prices are less volatile.

“You might be receiving a nice, attractive dividend from a company with a high dividend stock, but the price changes can wipe out the gains from dividends very quickly,” Gross said.

Lastly, the report points out that institutional investors should consider investing in “core” real assets that offer stable real yields, such as real estate, infrastructure, natural resources, and transportation. 

“They have relatively low correlations to traditional stocks and bonds, and that is what really makes them compelling,” Gross said. 

Although these alternative assets are less liquid compared to traditional stocks and bonds, they deliver the returns that investors need in the low-interest rate environment, according to Gross.

“Most investors do have room to take on additional illiquidity,” Gross said. “In a market environment such as this one, where public liquid markets simply are unlikely to deliver returns that investors need, you have to do something.”

To conclude, the overarching investment strategy in the low-interest rate environment is to “own cash flows that rise with nominal GDP,” Gross said. 

“Investors seeking to maintain and grow the purchasing power of their portfolios in such a world do have choices, if they’ re prepared to embrace the full spectrum of fixed income and hybrid assets, dividend-paying stocks and core real assets,” the report said.

La categoria dei promotori finanzari diventa di rilevanza nazionale dopo la Crisi Finanzaria del dot.com, nel Duemila.

E’ solo da vent’anni, che questa categoria ha preso purtroppo il comando delle operazioni nel settore dei servizi del risparmio.

Autorità di controllo compiacenti hanno permesso al fenomeno di dilagare: si è instaurata una vera e propria dittatura del promotore finanziario, come Recce’d ha scritto e illustrato più volte. Una dittatura che va a penalizzare l’investitore finale, costringendolo a scelte che non sono nel suo esclusivo interesse, e che invece rendono massimo il guadagno del promotore finanziario e della sua Società

E questo perché un contesto regolamentare ed amministrativo distorto mette il promotore finanziario in condizione di convincere il Cliente del fatto che “non esistono alternative”.

E grazie a questa capacità di persuadere il Cliente di ciò che non è vero, il promotore finanziario ha preso a comandare pure sulle Società dei Fondi Comuni, le quali oggi prendono una piccolissima parte dei flussi di ricavo che vengono generati dai loro stessi Fondi Comuni. E’ la dittatura del venditore: che si fa strapagare, per non fare nulla, non gestire, non capire, non aiutare, non proteggere il patrimonio del Cliente. Unicamente per piazzare la merce.

Nell’ultimo ventennio, si è registrata una sola battuta di arresto di questa tendenza, nel senso di un passo indietro forzato.

Ovvero il cambio forzato del nome: le lobby dei promotori finanziari al parlamento italiano hanno ottenuto, dopo lunghissime trattative, di poter cambiare il nome alla categoria, senza modificare per nulla le modalità con le quali questa categoria avvicina e poi gestisce il rapporto commerciale con il pubblico. Diventano così “consulenti autorizzati alla vendita”, anziché “promotori finanziari”, che è come dare una passata di calce sui danni, gli infortuni e gli errori accumulati in vent’anni. Sotto la calce, come sempre, vengno nascosti l’umidità e i guasti: che non vengono né corretti ne risanati.

Oggi le cose però stanno cambiando: anzi, sono già cambiate. I fatti degli anni 2016-2021, ed in particolare quelli del biennio 2020-2021, privano oggi la categoria dei promotori finanziari del loro più forte argomento di vendita: ovvero che “nel lungo termine tutto si aggiusta sempre, e quindi il Cliente non deve mai preoccuparsi, non deve mai vendere, non deve mai uscire dai Fondi Comuni. Deve sempre avere fiducia ed essere ottimista, e deve per sempre pagare il 3% sui Fondi Comuni (senza saperlo, senza che mai nessuno glielo abbia spiegato).

Un 3% che poi nella grandissima maggior parte si mette in tasca la Società dei promotori finanziari, ed il promotore finanziario medesimo.

Oggi le cose sono cambiate: il promotore finanziario è abituato a mettere sopra a tutto il grafico con la Borsa americana, quella che “non scende mai”. ma gli eccessi del 2020-2021 ora mettono anche la Borsa americana in gravissimo pericolo.

Il nostro amico promotore finanziario potrebbe trovarsi costretto ad andare dal Cliente e spiegare che non è vero, che nel lungo termine tutto si aggiusta, e che non è vero che basta stare lì fermi, con quei quattro Fondi comuni, e alla fine il guadagno arriva.

Anche perché se invece della Borsa americana prendiamo in esame altre Borse, si vede subito che le cose nella realtà del Mondo non stanno così, non stanno nel modo che racconta il promotore finanziario.

La settimana scorsa ne ha scritto anche il Financial Time, e tutti i promotori finanziari, farebbero bene a leggere con la massima attenzione questo articolo, insieme con i loro Clienti, ovviamente.

A tutti e due (al promotore finanziario ed anche al suo Cliente) farebbe poi bene scrivere a noi di Recce’d, e prendere un appuntamento al telefono, per confrontarsi sugli argomenti che, in modo diretto ed indiretto, sono toccati dall’articolo che segue.

Ed in particolare, sulla frase che chiude l’articolo.

The writer is a financial journalist and author of ‘More: The 10,000-Year Rise of the World Economy’

It is a truth universally acknowledged that equities will always go up in the long run. But anyone who backed a fund based on the UK’s FTSE 100 index must be starting to have their doubts.

On the last trading day of the second millennium, the index marked a then record high of 6,930.2, a story this journalist reported for the Financial Times. But the index did not pass the 7,000 level until March 2015, and was below its end-1999 level during trading last Monday. While the index has gone nowhere, at least the total return has been positive. Thanks to the reinvestment of dividend income, the annualised return for the FTSE 100 was 3.3 per cent between the end of 1999 and December 31, 2020. But that is not the kind of return that many investors were expecting back in 1999.

And the importance of dividends is slightly ironic, given that back then, counting on income was seen as a very old-fashioned way of approaching equity investment. Many technology companies did not pay dividends at all. Why has the index performed so badly? In part, this was because the end of the millennium coincided with the peak of the dotcom boom when share prices were bid up to inflated levels. But Wall Street was also involved in the dotcom bubble and its leading indices have performed much better; both the S&P 500 and the Dow Jones Industrial Average are around three times their end-1999 level.

A better explanation may lie in the composition of the index. There has been an enormous rate of turnover in FTSE 100’s constituents; less than half those in the benchmark at the end of the last millennium are still there. Of those, five are banks (Barclays, HSBC, Lloyds, Standard Chartered and Royal Bank of Scotland now renamed as NatWest) which have had a chequered 20 years to say the least. They are the survivors of a much larger group that included Abbey National, Alliance and Leicester, Halifax, and Woolwich.

Many of the other long-lasting constituents are from traditional industries like food and drink (ABF, Diageo, Whitbread), supermarkets (Sainsbury and Tesco), tobacco (Imperial and BAT), mining (Anglo American and Rio Tinto) or insurance (Legal & General and Prudential). What the FTSE 100 lacks are the kind of exciting technology companies that have performed so strongly on Wall Street; the Amazons, Facebooks and Googles.

Sage is the sole tech company to remain in the index from the December 1999 list; the likes of Arm, CMG, Logica, Misys and Sema have been swallowed up in acquisitions while Energis went into administration. There are not many stocks in the current FTSE 100 to set investors’ pulses racing and that is reflected in the way that the market is rated, relative to Wall Street.

Stocks in the FTSE 100 index trade on an average price equivalent to 18.4 times their previous 12-month earnings, compared with the S&P 500 index’s ratio of 31.4. Of course, that difference could conceivably imply that UK equities are much better value than American shares right now. It could also imply that long-run investing may not pay off on Wall Street from current levels.

After all, the UK is not the only market to disappoint over the long run. In Japan, the Nikkei 225 is still well below its end-1989 level. Back at the end of the 1980s, many investors believed that conventional valuation approaches did not apply in the Tokyo market, because the big Japanese companies like Toyota and Sony had discovered the secret of long-term growth. Such was the enthusiasm that the Japanese stock market comprised 44 per cent of the FT World Index, far above its share of global GDP.

So there is more than one reason for equities to struggle over the long run; the UK had too great a reliance on stodgy sectors whereas Japan simply reached a valuation level from which further gains were unlikely. Step forward to 2021, and investors so love the big American tech companies that the US market is more than 58 per cent of the FT World Index. Investors have long stopped worrying about conventional valuation measures like a low dividend yield or a high cyclically adjusted price/earnings ratio since they have not been a barrier to market rises in the past. American equities will always go up, they think. Of course, in 2007, they thought the same thing about US house prices. And we all know what happened then.

Anche il vostro private banker. persino il vostro wealth manager, anche il vostro promotore finanziario adesso è costretto a parlarvi di stagflazione.

Anche se lui non ha ben capito che cosa è, la stagflazione, ed anche se lui, il vostro promotore, preferisce sempre parlarvi di cose allegre: lui vuole tenervi su di morale, disegnare paesaggi assolati, raccontarvi di mari tropicali con le acque limpidissime, lui vuole invitarvi al campo di golf, mica preoccuparvi con le incertezze del futuro, che annoiano ed irritano.

Soprattutto, lui vuole evitare la realtà: ma poi, alla fine e come sempre, la realtà si impone su tutto.

Ed oggi, pure il promotore, pure il private banker, pure il wealh manager e persino il robo-advisor sono costretti a parlare con voi di stagflazione. perché ne scrivono anche sui siti per il trading-on-line, come vedete nell’immagine che apre questo Post.

A quella immagine ne vogliamo contrapporre una seconda: per documentare ai nostri lettori, ancora una volta, il modo nel quale la stampa nazionale affronta i temi dell’economia: il ruolo di tutti i quotidiani, su questa materia, è sempre quello di fare da fanfara per i Governi di volta in volta in carica, quasi come se i quotidiani si fossero assunti il ruolo di “spargitori di ottimismo”.

Noi giudichiamo questo atteggiamento non soltanto poco professionale ma pure un po’ ridicolo

Se solo alziamo gli occhi per un attimo dalla stampa italiana, e leggiamo la stampa internazionale, non troviamo un solo mezzo di comunicazione che oggi insista ancora sul tema della “crescita”, come si face invece per tutto il primo semestre 2021.

Oggi i toni sono decisamente, e vistosamente, cambiati. Ve lo documentiamo qui sotto.

Ed anche sui mercati finanziari, come leggete nell’immagine qui sotto, ed anche in altri Post che noi oggi pubblichiamo nel Blog, si parla soprattutto di stagflazione.

Non si tratta soltanto di Borse. si parla anche, come leggete qui sotto, di materie prime e di valute. E si torna a parlare di panico sui mercati finanziari. A poche settimane di distanza … dal “boom economico”.

Come sapete bene, noi di Recce’d mettemmo all’attenzione dei nostri lettori questo argomento ben 14 mesi fa (e precisamente in questo Post), e molte altre volte nei 14 mesi dall’agosto 2020 ad oggi.

Oggi, è molto grande il numero di commenti ed opinioni, alcune delle quali qualificatissime (immagine che segue) che mettono la stagflazione al centro di tutto.

Recce’d come dicevamo ne ha scritto in numerose ocacsioni, nel corso degli ultimi 14 mesi. affidiamo quindi una ricapitolazione ed un aggiornamento ad oggi all’articolo che segue, leggendo il quale ritroverete quelli che sono stati i temi centrali di questo Blog dall’agosto 2020 ad oggi: a partire dagli Anni Settanta, passando per il fatto che le Banche Centrali oggi sono in un angolo ed impotenti, per finire con il fallimento del “Reflation trade” che andava di moda (anche per i vostri wealth managers e private bankers) fino a qualche settimana fa. Quando a voi, amici lettori, raccontavano: “questo è il momento di investire”.

Allegriaaaaaa ….

Supply chain disruptions sweeping major economies have reawakened an old nemesis for investors: stagflation. Anxiety over rising inflation has been ever-present in markets this year. But with oil topping $80 a barrel, global food prices a third more expensive than they were a year ago and other commodities at decade highs, investors say a longer-than-expected inflationary surge is coinciding with a slowdown in growth — and making it worse. Economists and investors play down comparisons with the aftermath of the 1970s oil shock, which gave rise to the term “stagflation”. Then, inflation and interest rates ran into double digits, unemployment soared and GDP recovered only slowly from repeated setbacks.

But with energy bills now rocketing, many worry about a growth slowdown at a time when central banks are edging towards lifting interest rates in a bid to keep a lid on longer-term inflation. “The conversation around inflation has definitely shifted,” said Seema Shah, chief strategist at Principal Global Investors. “There’s still a broad agreement that a lot of it is transitory, but we still think it will last well into 2022 and really start to hit consumer spending.” “It’s not the 1970s, but this is modern-day stagflation.” Signals from the Federal Reserve and Bank of England last week that they could soon begin lifting rates have fuelled a big bond sell-off over the past week and a half.

But in contrast to the “reflation” trade at the start of this year, stocks have been unable to draw comfort from the prospect that tighter monetary policy will be accompanied by accelerating growth. Ample evidence suggests that the supply shock reverberating around the world, combined with outbreaks of the Delta variant of coronavirus, is tempering the recovery in growth. Data released this week pointed to a sharp slowdown in Chinese manufacturing, as regulatory pressures and high energy prices shut down some production.

Business surveys from the US, UK and eurozone suggest that activity has slowed as delivery times lengthened and backlogs built up. Selling activity spilled over into equity markets this week after data showed that US consumer confidence had dropped to a six-month low in August. The UK has found itself at the sharp end of stagflationary concerns, with a surge in energy prices compounded by driver shortages that left petrol pumps running dry. While revised data show activity bounced back faster than thought over the summer, the recovery now appears to be faltering. The Bank of England’s governor Andrew Bailey acknowledged this week that supply bottlenecks and labour shortages were worsening, and could hold down growth and fuel inflation for some months to come. “The recovery has slowed and the economy has been buffeted by additional shocks,” he said in a speech to the Society for Professional Economists.

Concerns over growth are one reason the pound has not benefited from a sharp rise in UK government bond yields, as they typically do, after Bailey signalled that a rate rise could come as soon as this year. Instead, sterling has slumped to its lowest level of 2021 against the dollar, as some investors fear that early rate increases could choke off a fragile recovery. “If it is stagflation, central banks are in a bind,” said Jim Leaviss, head of public fixed income at M&G Investments. “Hiking will reduce demand a little bit and strengthen the currency. But it will have no impact on supply chain issues [ . . .] it won’t bring back lorry drivers.”

That dilemma — shared by other big central banks — could threaten buoyant equity markets, according to Mohamed El-Erian, chief economic adviser at Allianz. “Central banks will be torn between reacting to the ‘stag’ and the ‘flation’,” he said. “That’s a world where investors’ confidence in policymakers is shaken, and the backstop they’ve had over the past decade isn’t there any more.” Vicky Redwood, senior economic adviser at consultancy Capital Economics, said the UK’s “stagflation lite” was visible in many countries — with the surge in inflation coming earlier in the US, but growth now slowing there too as a result of the spread of the Delta coronavirus variant. But inflation should start to ease in 2022 and the situation was still “a long way off anything like the 1970s,” she said, adding: “we won’t see inflation get into the system like we did then.”

Others warn, however, that there is no sign yet of the strains on supply chains easing, and that the world could be heading for a more sustained period of tepid growth and higher inflation than policymakers have been predicting. “It’s a global problem,” said Kallum Pickering, economist at Berenberg, arguing that companies had little visibility over “very complicated supply chains” and disruption could last much longer than thought. If supply chain problems continued for a further six to 12 months, while consumers still had job security and were willing to pay for the goods they wanted, he said: “the whiff of stagflation might be more of a stench”.

Come viene illustrato oggi, in altri Post pubblicati in questo Blog, la stagflazione è il tema dominante, oggi, sui mercati finanziari di tutto il Mondo.

Chi segue questo Blog ne era informato ormai da 14 mesi, e precisamente dal Post che pubblicammo nell’agosto del 2020.

In quel Post veniva evidenziato proprio il rischio stagflazione come il maggiore rischio per i 12 mesi successivi, con queste parole: Vi chiediamo inoltre di notare i ripetuti accenni al tema della stagflazione, e quindi degli Anni Settanta. Sarà un tema dominante, nei prossimi 12 mesi. Si tratta di un servizio che abbiamo con piacere messo a disposizione di tutti in modo gratuito, in quanto concreto esempio di come un gestore professionale di portafoglio può curare al meglio i vostri investimenti, nel vostro esclusivo interesse.

I nostri lettori più attenti, quindi, considerano la stagflazione il tema dominante oggi dui mercati finanziari, ma allo stesso tempo si domandano: quale sarà il tema dominante, tra 12 mesi? e come devo prepararmi, oggi, con il mio portafoglio di investimenti?

La stagflazione è il rischio di oggi. Quale sarà il rischio di domani?

Noi su questo abbiamo oggi le idee molto chiare, tanto che ne abbiamo scritto, nel nostro The Morning Brief, ogni mattina la settimana scorsa.

Si tratta del tema della diseguaglianza: un tema del quale quotidiani e Tv hanno accennato velocemente, ma in più occasioni, negli ultimi anni, anche a commento del successo di alcuni libri, oppure al margine di manifestazioni e proteste.

Come noi abbiamo illustrato ai nostri Clienti, nell’ultimo anni questo tema è però entrato con forza sia nelle dichiarazioni pubbliche delle Banche Centrali, sia nei documenti, nelle “ricerche” e nelle dichiarazioni delle banche e delle altre Istituzioni internazionali.

E’ quindi indispensabile non soltanto comprendere il problema nei suoi vari aspetti, ma pure capire in che modo andrà ad influenzare le scelte concrete.

Le decisioni di politica monetaria delle Banche Centrali, le decisioni di politica economica dei Governi, ed anche le scelte delle Aziende.

Noi riteniamo che l’impatto sarà molto maggiore, e molto più urgente, dell’impatto dei temi legato ai cambiamenti climatici, quei temi che oggi trovate sulle prime pagine di tutti i quotidiani.

Tra un anno, saremo qui con voi a verificare.

Nel frattempo, tra centinia e centinaia di commenti, ne abbiamo scelto uno particolarmente qualificato, che qui di seguito vi mettiamo a disposizione gratuitamente.

What worries me the most is inequality, both within and across countries. And it’s something that financial markets puts aside as a social problem, not really an economic or financial problem. And we’ve risked seeing the issue of inequality gather momentum. Covid has already been the great un-equalizer, but rather than go back to where we’ve come from, we are now creating the dynamics for inequality to worsen and to assume greater importance in disrupting all sorts of things in our society.

A highly unequal society is not an economic healthy society. But the thing that worries me even more than that is inequality of opportunity. We know what Covid did to people who had no WiFi at home, who had no computers. We know that public school districts lost touch with a lot of their students and these students were not only becoming unemployed, but unemployable, which means a lost generation of young people.

As we slowly emerge from Covid, its aftermath creates different dynamics around the world. If you’re in a developing country today, you can no longer assume that companies will come to you. The onus is increasingly on you coming to the employer. And that is the real issue when education is lagging, when technology is lagging. So I do worry that we’re going to see this massive process get larger, if we’re not careful.

We were watching a tragic movie in play mode and then Covid came along and pressed fast-forward. First, it worsened wealth inequality because the response to Covid involved massive Federal Reserve liquidity injections to boost asset prices. And who owns assets? It’s the rich. So if you look at what has happened, the top part of the wealth distribution, people are much better off than they were before Covid. But at the bottom end, that hasn’t happened.

Think of people whose jobs have been displaced by this big step toward digitalization, who have no financial assets to begin with and don’t benefit from what has happened to asset prices. In addition, they are hoping to buy a house and they’ve been priced out of the housing market. So suddenly both the actual and potential wealth and income has declined.

To add to that, if they are unemployed, there’s suddenly a skills mismatch. There are record levels of vacancies that the labor market is not able to match to workers. And then you get what economists called multiple equilibria: one bad outcome, resulting not in mean reversion, but a high likelihood of an even worse outcome.

We already know what it looks like because we’ve had a taste of it. On the economic side, it looks like insufficient aggregate demand, which is a fancy way of saying that as the rich capture more income and more wealth, they spend less of it. The poor tend to consume more. So if the incremental income and wealth all go to the rich, then you’re going to have the problem of demand, which means you’re going to have a problem of growth.

And we’ve already had a period of so-called secular stagnation, and what my colleagues and I call the new normal, where we get low and insufficiently inclusive growth. We know what that looks like. We know the social consequences. It is cultural war. It’s alienation. It’s marginalization. That’s not good for society. It eats away at the fabric of society.

We know what it looks like politically. People will become single-issue voters, and single-issue voters can be captured by all sorts of things. No wonder we’re seeing an increase in populism across the world. And then it means a less equal world. You know, I grew up interested in developing countries, and for decades it was almost an accepted fact — not a hypothesis, almost an accepted fact — that these countries would converge to the advanced economies.

Well guess what? We’re having divergence going on right now. And I suspect this divergence is not short term. So we may live in a less equal world, or to be more blunt, a much more unequal world. And that’s problematic for global economic policy coordination, interdependency, immigration. I mean, I can go on and on. So it is problematic. We’ve had a taste of it and we don’t quite like that taste, but it could become a lot worse.

The American dream is all about capturing these amazing opportunities and being able to go right up the income ladder. There’s a correct notion that inequality can incentivize people to work harder, to do better, but there comes a point when it goes from encouraging people to do good things to actually detracting from not just economic well-being, but social and political well-being.

I don’t think the American dream is dead. I think it’s harder to achieve. If you don’t have the right education to begin with, if you don’t have a set of assets to begin with, you’re looking at a much steeper curve, and that is a real problem for too many people.

The prescription is investing in human and physical infrastructure. It’s about enabling people to do more and to do better. It’s about providing people with transformational opportunities. It starts at a very early age, at pre-K, exposing bright minds to exciting education and opportunities. It continues throughout the middle school, high school, university, making elite universities more accessible to people who deserve to be there but may be held back because they come from the wrong zip code or because their parents have never had an education.

There’s a lot that can be done. It’s about fundamentally asking the question, ‘How do we enable our resources, human and physical, to be more inclusive and more productive?’

Lo dice lo stesso Jerome Powell, il capo supremo della Banca Centrale più potente al Mondo: le Banche Centrali hanno necessità della fiducia del pubblico.

Necessità: fate attenzione alla scelta dei termini.

Powell questa settimana, durante l’Audizione al Congresso, ha detto: our need to sustain public trust is essence of our work. Ovvero: l’essenza del nostro lavoro è sostenere la fiducia del pubblico.

Si parla della fiducia in senso generale, ovviamente: ma non può esserci fiducia del pubblico se non c’è fiducia in quella Banca Centrale che deve sostenerla, la fiducia.

Per questo, ai nostri lettori noi suggeriamo di valutare le recenti tensioni sui mercati finanziari anche alla luce di ciò che è successo pocchi giorni fa dentro il Consiglio della Federal Reserve.

Si tratta di eventi che non hanno precedenti: la prima volta nella storia. Nella medesima giornata, ben due membri del Consiglio della Fed si sono dimessi per la medesima ragione, ovvero per avere fatto intensa attività di trading sul mercato azionario.

Quel mercato azionario che, negli ultimi dieci anni, si è mosso soprattutto andando dietro a decisioni ed indiscrezione e voci e dichiarazioni dei membri del Consiglio della Federal Reserve.

Immediatamente, molti operatori e molti commentatori si sono addentrati nelle analisi dei cambiamenti all’interno del Consiglio: come cambieranno gli equilibri? Aumenterà il numero dei “falchi” oppure il numero delle “colombe”?

A noi di questo aspetto importa ben poco: abbiamo già scritto, fin dall’inizio del 2021, che a causa delle sue scelte la Federal Reserve si è messa da sola in un angolo, non ha più spazio per manovrare, non può più scegliere e quindi non può più incidere. In sostanza, oggi per i mercati finanziari quello che fa e dice la Federal Reserve è già del tutto scontato, e quindi non ha importanza per ciò che riguarda il futuro. Falchi o colombe, alla Fed tutti sono costretti a fare e dire le sole cose che possono fare e dire, data la attuale situazione.

A noi, quindi, l’aspetto della composizione del Board della Fed interessa pochissimo: invece ci interessano moltissimi i cambiamenti sul piano della fiducia (la fiducia citata da Powell qui sopra) e della politica.

A noi sembra importante sottolineare che è finita la fase nella quale gli uomini della Federal Reserve erano intoccabili, ed erano visto dai media e dalla maggior parte della pubblica opinione come “gli uomini che hanno salvato il Mondo”.

Come leggete qui a fianco, le dimissioni di questa settimana hanno già portato alla prima richiesta di interventi legislativi sulle attività private dei membri del Consiglio. A nostro giudizio, questo è solo l’inizio: è il segnale di un cambiamento di clima politico, ed anche della fina della fase nella quale i membri del Consiglio sono stati trattati come gli Onniscenti e gli Onnipotenti.

Per noi investitori questo cambiamento è significativo: le Banche Centrali (non solo la Fed) da almeno un decennio agiscono come un potere non solo autonomo ma pure esente da ogni verifica. Implicitamente si assume che i banchieri centrali “ne sappiano di più” dei politici, e che per questa ragione non debbano mai rispondere delle loro scelte a nessuno.

Questo cambierà: e per questa spinta, arriveranno cambiamenti anche al modo di condurre la politica monetaria

C’è poi un secondo tema che vogliamo mettere all’attenzione dei nostri lettori: da almeno tre decenni, la società americana in ogni sua componente è stata colpita da una ossessione, che noi vorremmo definire “l’ossessione della Finanza”. Il fenomeno è un fenomeno di massa: ad ogni livello, tutti vogliono partecipare al gioco della Finanza, ed anche per questo chi lavora nella Finanza viene presentato da film e libri si successo come un Superuomo.

A nostro giudizio, così come gli eccessi del 2020-2021 chiuderanno la fase della “bolla di tutto” sui mercati, allo stesso modo gli eccessi del 2020-2021 decretano anche la fine della “ossessione della Finanza” presso il pubblico.

Un esempio concreto di questo lo trovate nell’articolo del Wall Street Journal che segue qui sotto, che mette all’attenzione del pubblico i conflitti di interesse di ben 131 giudici federali.

Perché associare i giudici federali alle dimissioni nel Board della Federal Reserve? Per raccontare al pubblico che l’ossessione della finanza colpisce anche quelle figure (giudici e banchieri centrali) che il pubblico immagina super partes e che invece non lo sono e proprio a causa del loro coinvolgimento nella “ossessione della Finanza”. Questo articolo che vi proponiamo in lettura è un segno dei tempi che cambiano.

More than 130 federal judges have violated U.S. law and judicial ethics by overseeing court cases involving companies in which they or their family owned stock.

A Wall Street Journal investigation found that judges have improperly failed to disqualify themselves from 685 court cases around the nation since 2010. The jurists were appointed by nearly every president from Lyndon Johnson to Donald Trump. About two-thirds of federal district judges disclosed holdings of individual stocks, and nearly one of every five who did heard at least one case involving those stocks.Alerted to the violations by the Journal, 56 of the judges have directed court clerks to notify parties in 329 lawsuits that they should have recused themselves. That means new judges might be assigned, potentially upending rulings.

When judges participated in such cases, about two-thirds of their rulings on motions that were contested came down in favor of their or their family’s financial interests.

In New York, Judge Edgardo Ramos handled a suit between an Exxon Mobil Corp. unit and TIG Insurance Co. over a pollution claim while owning between $15,001 and $50,000 of Exxon stock, according to his financial disclosure form. He accepted an arbitration panel’s opinion that TIG should pay Exxon $25 million and added $8 million of interest to the tab.

In Colorado, Judge Lewis Babcock oversaw a case involving a Comcast Corp. subsidiary, ruling in its favor, while he or his family held between $15,001 and $50,000 of Comcast stock.At an Ohio-based appeals court, Judge Julia Smith Gibbons wrote an opinion that favored Ford Motor Co. in a trademark dispute while her husband held stock in the auto maker.

After she and the others on the three-judge appellate panel heard arguments but before they ruled, her husband’s financial adviser bought two chunks of Ford stock, each valued at up to $15,000, for his retirement account, according to her disclosure form.

Edgardo Ramos, Lewis Babcock, Julia Smith Gibbons

The hundreds of recusal violations found by the Journal breach a bedrock principle of American jurisprudence: No one should be a judge of his or her own cause. Congress first laid out that principle in 1792 to guarantee litigants an impartial judge and reassure the public that courts could be trusted.Judge Ramos, who oversaw the Exxon case, was unaware of his violation, said an official of the New York federal court, because his “recusal list”—a tally judges keep of parties they shouldn’t have in their courtrooms—listed only parent Exxon Mobil Corp. and not the unit, whose name includes the additional word “oil.” The official said the court conflict-screening software relied on exact matches.The unit had informed the court at the outset of the case that it was a subsidiary of Exxon Mobil so Judge Ramos could “evaluate possible disqualification or recusal,” a court filing shows.

After the Journal contacted Judge Ramos, who was named to the court by former President Barack Obama, the court’s clerk notified the parties of his stockholding. TIG attorneys asked the court to set aside his ruling and send the case to a new judge because of “the inevitable appearance of partiality.” Exxon opposed assigning a new judge, calling that a “manifest unfairness, gross inefficiency, and waste of judi” An appellate court has put a hearing on hold until the district court decides what to do.

In the Comcast case, a Colorado couple asked Judge Babcock to issue an order blocking Comcast from accessing their property to install fiber-optic cable. Representing themselves in court, Andrew O’Connor and Mary Henry accused Comcast workers of bullying them, scaring their 10-year-old daughter and injuring their dog, Einstein, allegations the company denied. Judge Babcock, who was appointed to the court by former President Ronald Reagan, ruled the couple had “continually blocked Comcast’s access to the easement.” He sent the case back to state court, as Comcast wanted. “I dropped the ball,” Judge Babcock said when asked about the recusal violation. He blamed flawed internal procedures. “Thank you for helping me stay on my toes the way I’m supposed to,” he said. A Comcast spokeswoman declined to comment. Mr. O’Connor, who settled his case in state court, said, “If you are a federal judge, you should not be holding individual stocks.”

Judge Gibbons from the Ford trademark case, appointed to the appeals court by former President George W. Bush, said she had mistakenly believed holdings in her husband’s retirement account didn’t require her recusal. She later directed the clerk of the Sixth U.S. Circuit Court of Appeals to notify the parties of the violation and said that her husband has since told his financial adviser not to buy individual stocks. “I regret my misunderstanding, but I assure you it was an honest one,” she said. A spokesman for Ford said: “A fair and impartial judiciary is critical to the integrity of our legal system. In this case, the violation of Ford’s trademarks was clear.” “I dropped the ball. Thank you for helping me stay on my toes the way I’m supposed to.” — Judge Lewis Babcock, when asked about his violations

Nothing bars judges from owning stocks, but federal law since 1974 has prohibited judges from hearing cases that involve a party in which they, their spouses or their minor children have a “legal or equitable interest, however small.” That law and the Judicial Conference of the U.S., which is the federal courts’ policy-making body, require judges to avoid even the appearance of a conflict. Although most lawsuits don’t directly affect a company’s stock price, the Supreme Court in 1988 said the law’s purpose is to promote confidence in the judiciary. Conflict-of-interest rules are common for state and federal employees as well as for lawyers, journalists and corporate executives. U.S. government workers may not participate “personally and substantially” in matters in which they have a financial interest.

The Journal reviewed financial disclosure forms filed annually for 2010 through 2018 by roughly 700 federal judges who reported holding individual stocks of large companies, and then compared those holdings to tens of thousands of court dockets in civil cases. The same conflict rules apply to criminal cases, but large companies are rarely charged, and the Journal found no instances of judges holding shares of corporate criminal defendants in their courts.It found that 129 federal district judges and two federal appellate judges had at least one case in which a stock they or their family owned was a plaintiff or defendant. Judges’ stockholdings exceeded $15,000 in 173 cases and $50,000 in 21 of those cases, although under the law, the amount doesn’t matter.

The Journal found 61 judges or their families not only holding stocks in companies that were plaintiffs or defendants in the judges’ courts but also trading the stocks during cases.Judges offered a variety of explanations for the violations. Some blamed court clerks. Some said their recusal lists had misspellings that foiled the conflict-screening software. Some pointed to trades that resulted in losses. Others said they had only nominal roles, such as confirming settlements or transferring cases to other courts, though there is no legal exemption for such work.The ethics code for federal judges “requires recusal when a judge has a financial conflict, regardless of the substance of the judge’s actual involvement in the case,” the Judicial Conference’s Committee on Codes of Conduct wrote in a letter to a judge this month. Some blamed court clerks. Some said their recusal lists had misspellings. Some pointed to trades that resulted in losses.

In response to the Journal’s findings, the Administrative Office of the U.S. Courts said: “The Wall Street Journal’s report on instances where conflicts inadvertently were not identified before a case was resolved or transferred is troubling, and the Administrative Office is carefully reviewing the matter.”It said the federal judiciary “takes very seriously its obligations to preclude any financial conflicts of interest” and has taken steps, such as conflict-screening software and ethics training, to prevent violations. “We have in place a number of safeguards and are looking for ways to improve,” the office said. Chief Justice John Roberts, who heads the federal judiciary, didn’t respond to requests for comment. The nation’s roughly 600 full-time federal trial judges, supplemented by about 460 semiretired jurists called senior judges, wield enormous power.

Holding lifetime appointments, they preside over hundreds of thousands of civil and criminal cases each year in 94 court districts. They have soup-to-nuts control over all elements of their courtrooms, from pretrial process and trial to criminal pleas, judgments and sentencing. Judges have wide latitude for fact findings and evidentiary rulings, most of which can be overturned only for abuse of discretion, a high hurdle.

Violations of the 1974 law almost never become public. Judges’ financial disclosures aren’t online, are cumbersome to request and sometimes take years to access.Judges are informed if anyone requests to see their disclosures, creating a disincentive for lawyers who might fear annoying judges in whose courtrooms they frequently appear. Judges rarely make public the lists of companies on whose cases they shouldn’t work.

When judges disqualify themselves from cases, they typically don’t disclose details. No judges in modern times have been removed from the federal bench solely for having a financial interest in a plaintiff or defendant that appeared in their courtroom.

“I just blew it. I regret any question that I’ve created an appearance of impropriety or a conflict of interest.” — Judge Timothy Batten Sr., when notified of his violations

The Journal analyzed data from the Free Law Project, a nonpartisan legal-research nonprofit that is planning to post judicial disclosure forms online. The findings amount to a pervasive disregard for the judicial conflict-of-interest laws, legal experts said.

A recusal violation in isolation could be viewed as an oversight, but the Journal’s investigation “raises a more systemic problem of judges chronically neglecting their duty to disqualify in such cases,” said Charles Geyh, a law professor at Indiana University, who specializes in judicial conduct, ethics and accountability.The findings “are both surprising and disappointing,” said Timothy Batten Sr., chief judge of the U.S. District Court for the Northern District of Georgia and a member of the Committee on Codes of Conduct for the Judicial Conference of the U.S.“I believe in the vast majority of these cases, it is an oversight and indolence,” he added.Judge Batten himself owned shares of JPMorgan Chase & Co. while he heard 11 lawsuits involving the bank, most of which ended in the bank’s favor, the Journal’s analysis shows. “I am mortified,” Judge Batten said in a phone interview when notified about his violations, which occurred in 2010 and 2011, before he joined the Codes of Conduct committee in 2019. “I had no idea that I had an interest in any of these companies in what was a most modest retirement account” managed by a broker.“I just blew it. I regret any question that I’ve created or appearance of impropriety or a conflict of interest,” he said.

Timothy Batten Sr., Janis Sammartino, Rodney Gilstrap

Judge Batten, appointed by former President George W. Bush, said he stopped investing in individual stocks in 2012 and moved his portfolio to mutual funds, which don’t require recusal, and has since closed the account.The Journal analyzed cases to determine whether judges made rulings on contested motions, such as those seeking dismissal or summary judgment. Judges ruled on contested motions in 21% of the nearly 700 cases in question. Those rulings favored the judges’ financial interests in 94 cases, went against the judges’ interest in 27 cases and had mixed outcomes in 24 cases. Already, several parties on the losing side of the rulings have petitioned for a new judge to hear their cases after they were alerted to the violations identified by the Journal.

Several judges misunderstood the law, initially saying that they didn’t have to recuse themselves because their shares were held in accounts run by a money manager.The ban on holding even a single share of a company while presiding in a case involving the firm means judges must be vigilant. The 1974 law requires judges to inform themselves about their own financial interests and make a “reasonable effort” to do the same for their spouses and any minor children. The Judicial Conference of the U.S. requires courts to use conflict-checking software to help identify cases where judges should bow out.

Judge Janis Sammartino of California traded in stocks of Bank of America Corp., CVS Health Corp., Deutsche Bank AG , Hartford Financial Services Group Inc., HSBC Holdings PLC, JPMorgan, Pfizer Inc., Public Storage, Wells Fargo & Co. and Microsoft Corp. while hearing 18 lawsuits involving one or more of those companies, the Journal found. In all, she heard 54 cases involving companies held in her family’s trusts.In the Microsoft case, a Chicago man alleged the software giant violated the Telephone Consumer Protection Act by sending an unsolicited text about its Xbox gaming console to his mobile phone. He filed suit in 2011. One of Judge Sammartino’s family trusts bought Microsoft stock twice in 2012 and added three purchases in 2013.

The plaintiff’s lawyers sought in 2013 to turn the case into a class action involving 91,708 people who allegedly received the text messages. Microsoft said that it had received permission to send the texts but that records confirming this had been destroyed. Had a class been approved, the case could potentially have cost Microsoft more than $45 million, according to court filings by the plaintiff.Judge Sammartino denied the class-action motion as well as Microsoft’s motion to dismiss the case. She ruled that the law permitted the plaintiff to seek damages of $500 for one alleged violation, potentially tripled. He appealed but settled before the appeal was heard. A spokesman for Microsoft declined to comment. One of the plaintiff’s lawyers also declined to comment.

Judge Sammartino, an appointee of former President George W. Bush, initially referred questions from the Journal to William Cracraft, a spokesman for the Ninth U.S. Circuit Court of Appeals. “She asked me to let you know” her stocks “are in a managed account, so she’s not seeing as how there could be a conflict,” Mr. Cracraft said. “She’s not inclined to discuss her private business with you since it is all in managed accounts, and she thinks that’s sufficient.”An opinion by the Judicial Conference’s Committee on Codes of Conduct in 2013 confirmed that judges must bow out of cases involving stocks they own in accounts run by money managers.Judge Sammartino later informed the court clerk’s office of the conflicts, and the office filed a letter notifying parties to the Microsoft case and other cases with violations identified by the Journal.

“Judge Sammartino was not aware of this financial interest at the time the case was pending,” the letter said. “The matter was brought to her attention after disposition of the case. Thus, the financial interest neither affected nor impacted her decisions in this case. However, the financial interest would have required recusal.”

Before the Journal contacted Judge Sammartino about her recusal violations, she disqualified herself in at least 10 other cases involving companies whose stocks were listed on her disclosure forms, a review of her cases shows.Judge

Rodney Gilstrap, chief of the U.S. District Court for the Eastern District of Texas, had the largest number of conflicts in the Journal’s analysis: 138 cases assigned to him involving companies in which he or his wife held an interest.Judge Gilstrap said he believed he didn’t need to recuse himself from some cases because they required little or no action on his part, and in other cases because the stocks were in a trust created for his wife. Legal-ethics experts disagreed on both counts.“I take my obligations related to potential conflicts/recusals seriously,” he said in an email. “Throughout my judicial career, I have endeavored to comply with all such obligations, and I will continue to do so.” Judge Sammartino’s 54 conflicts were the second-most recusal violations.

Brian Martinotti in New Jersey ranked third, handling 44 cases involving companies in which he had invested. Among his biggest holdings was Alphabet Inc., the parent of Google. He disclosed in 2016, 2017 and 2018 that he owned $15,001 to $50,000 of Alphabet shares. Brian Martinotti, Gershwin Drain, Emily MarksIn 2017, the judge threw out a lawsuit against Google alleging that videos on its YouTube unit falsely said the plaintiff was a sex offender, ruling that the Communications Decency Act let Google off the hook.Judge Martinotti, an Obama appointee, didn’t respond to requests for comment, but after the Journal inquired, the district court clerk notified parties to 44 cases of Judge Martinotti’s stock ownership. His Alphabet holding didn’t affect the judge’s decisions but would have required recusal, the clerk wrote. A spokesman for Google declined to comment.“I would like my case to be re-opened as Judge Brian R. Martinotti was unfairly biased and should have recused himself from my case,” the plaintiff, Nuwan Weerahandi, wrote in an August 2021 letter to the court, after receiving notice of Judge Martinotti’s violation.

The chief judge of the New Jersey federal court, Freda Wolfson, denied Mr. Weerahandi’s request on Sept. 2, saying the Communications Decency Act bars defamation-related claims against computer services such as Google. “Importantly, in making this purely legal determination, Judge Martinotti did not engage in any factfinding that would bear on the credibility of any party, including you,” Judge Wolfson wrote. In at least 18 instances, judges disqualified themselves over conflicts, only to have the case reassigned to a judge who also had a conflict but didn’t recuse.In 2015, Judge Robert Cleland in Michigan, a George H.W. Bush appointee, bowed out of a suit by an injured motorist against insurer Allstate Corp., whose stock the judge had been buying and selling that year.

The case was reassigned to Judge Gershwin Drain, who also owned Allstate shares. Judge Drain heard the case—and six others involving Allstate—and wrote a ruling denying a request by the motorist to move the dispute to state court. The case then settled on undisclosed terms.Presented with his conflicts in 42 cases, Judge Drain, an Obama appointee, said he had added notices to the court’s public docket for each suit.“I can say with absolute certainty that I never made any decision in favor of a company because I owned stock and was invested in that company,” Judge Drain said in an email. “To prevent any future issues, however, I have taken steps to review any new cases and if I am invested in any of the companies among the new cases that are assigned to me I will immediately recuse myself.” Allstate didn’t respond to requests for comment. A lawyer for the motorist declined to comment.Frequent recusals can upset courts’ random drawing of judges for cases and lead to a smaller pool.

In 20 federal districts, a third or more judges owned the same stock in the same year. In the U.S. District Court for the Eastern District of Virginia in 2017, fully a third disclosed a Microsoft stock holding. More than 340 federal appellate and trial judges reported holdings in Apple Inc. at some point from 2010 to 2018 and 300 in Microsoft. About 500 judges owned Bank of America, Citigroup Inc., JPMorgan or Wells Fargo shares at some point. Those numbers reflect only stock ownership, not recusal violations. However, the Journal found 37 judges who owned a bank stock while improperly hearing a case involving that bank.

Judge Emily Marks bought Wells Fargo stock two weeks after she was assigned a Wells Fargo case, a conflict that now threatens to upset a ruling she made.In the suit, Jacob Springer and Jeanetta Springer of Roanoke, Ala., acted as their own attorneys in challenging Wells Fargo’s foreclosure of Ms. Springer’s father’s home. In court filings, they said her ailing father missed a mortgage payment three months before he died, after which his daughter, who inherited the home, made payments. Wells Fargo foreclosed, saying the Springers missed payments of about $4,100 on an outstanding mortgage of more than $80,000; they said they had missed just one $695 payment. “This is outrageous. How am I supposed to know she owns stock in Wells Fargo?” — Jacob Springer, when told of the judge’s violation in the case he lost

Judge Marks, chief judge of the U.S. District Court for the Middle District of Alabama and an appointee of former President Donald Trump, was assigned the case in mid-August 2018. The judge bought Wells Fargo stock at the end of the month. In September, she adopted a magistrate judge’s recommendation to dismiss the Springers’ suit, a decision affirmed on appeal. Judge Marks declined to comment. The court clerk told parties to the case that the judge had informed her of having owned the bank stock and directed the clerk to notify the parties. The clerk told them Judge Marks’s stock ownership didn’t affect her decisions in the case but would have required recusal. Mr. Springer said, “This is outrageous. How am I supposed to know she owns stock in Wells Fargo?”The Springers asked the court to reopen the case, saying in a filing that “a non-interested Judge” might have let them amend their pleadings. The court assigned a new judge to their suit in July. A spokesman for Wells Fargo declined to comment.

The nation’s 94 district courts are organized into 12 circuits, or regions. The Journal identified recusal violations in each region.The U.S. Supreme Court wasn’t part of the Journal’s analysis. Nor did it include bankruptcy or magistrate judges. Half of all federal trial and appellate judges in the Journal’s review disclosed minimum financial assets of $775,000 in 2018, while 31 reported a minimum of $10 million of assets. Some jurists joined the bench after lucrative careers in private practice.

Federal district judges draw an annual salary of $218,600, which isn’t much more than a first-year attorney at a top-tier law firm earns. Some judges said their salary level makes stock investments an attractive option.

Susan Webber Wright, Donald Graham, Benjamin Settle“

I have my judicial salary, but the law really restricts what else judges can do for additional income,” said Judge Susan Webber Wright in Arkansas. She said she held more stock when she was younger and trying to build a nest egg for her family.Judge Wright, an appointee of former President George H.W. Bush, oversaw 2005 and 2006 cases involving Eli Lilly and Co. and Home Depot Inc. while owning shares of those companies. She issued no major rulings before one case settled and the other was transferred to another district.“A judge has to be on her toes, and obviously I was not,” Judge Wright said.Judges who have many conflicts are “either being careless or have people working for them who are not exercising due diligence,” she said, though she added that judges bear the ultimate responsibility for steering clear of conflicts.

Judge Donald Graham in Florida held American depositary receipts of Alcatel-Lucent while assigned to a case involving the French telecom maker. He sold the ADRs in 2010, a day after he approved a $45 million civil settlement between the U.S. Securities and Exchange Commission and Alcatel-Lucent over allegations the company bribed foreign officials. The company neither admitted nor denied the allegations.After being contacted by the Journal, Judge Graham, a George H.W. Bush appointee, notified the court clerk of the violation. In a publicly filed letter to the parties, the clerk said Judge Graham’s holding didn’t affect his decisions.A lawyer for the SEC told the court the agency didn’t believe any further action was required. Alcatel-Lucent’s current owner, Nokia Corp., declined to comment.

Judge Benjamin Settle in Washington state sold as much as $15,000 of Amgen Inc. stock during a case that was settled in 2012. He sold the stock in 2008, while the suit was under seal, giving him access to nonpublic information about an allegation of kickbacks to doctors. The case contributed to a $762 million penalty against the biotech company in 2012.Judge Settle, a George W. Bush appointee, said he hadn’t included all of his holdings on his recusal list when he inherited the case in 2007 as a newly commissioned federal judge. “Amgen was among those mistakenly omitted,” he said. Judge Settle said he directed his broker in 2008 to sell all of his stocks. A spokesman for Amgen declined to comment.The Journal’s tally of recusal violations is likely an undercount. In Mississippi, Judge Sharion Aycock’s husband owned as much as $15,000 in shares of Dollar General Corp. at a time when the Journal found two cases she heard involving the retailer. After being asked about the matter, Judge Aycock found five more violations involving Dollar General and notified the clerk about all seven.

A few of the judges with violations the Journal identified had legendary careers, including Jack Weinstein and Arthur Spatt in the U.S. District Court for the Eastern District of New York. Judge Weinstein, a Lyndon Johnson appointee, oversaw four cases involving Medtronic PLC or Target Corp. while he or his family held their shares. Judge Spatt, who was named to the court by former President George H.W. Bush, had a violation involving Johnson & Johnson. Judge Spatt died in 2020 and Judge Weinstein died earlier this year, both having served into their 90s.

Judge Margo Brodie, chief of the Eastern District, which includes New York City’s Brooklyn and Queens boroughs, acknowledged the conflicts but said the judges’ “involvement was minimal, limited to ministerial actions” such as approving settlements or opinions by magistrate judges.“These two judges have been revered by the practicing bar for their integrity and even handedness,” Judge Brodie said in an email. “There has never been a suggestion, much less an accusation, that either ever acted inappropriately.”

The Journal identified 36 conflicts by one judge in Colorado, R. Brooke Jackson. The cases included Apple, Chevron Corp., Eli Lilly, Facebook Inc., General Electric Co., Home Depot, Honeywell International Inc., Johnson & Johnson, JPMorgan, Pfizer and Wells Fargo.

“I have preferred to stay unknowledgeable about it.” — Judge R. Brooke Jackson, on the stocks in his and his wife’s portfolio

Reached by phone, Judge Jackson said he had no idea which stocks he owns because a money manager handles them and because his wife fills out his disclosure forms. He said that because he doesn’t know, he couldn’t have a conflict of interest.“I’ve never really paid much attention to it,” Judge Jackson said of his and his wife’s investments. “I have preferred to stay unknowledgeable about it.”Told he was required to know under the law, he said: “That’s news to me.” In a later email, Judge Jackson, an Obama appointee, admitted his mistake. “I am taking immediate steps to provide a current list of stocks and other investments held by my wife and by me to our Clerk’s Office so that we can create an appropriate conflicts list and be sure that this does not happen again,” he wrote. In a subsequent 21-page letter to the Journal,

Judge Jackson said he should have recused himself in most if not all of the 36 cases.“I am embarrassed that I did not properly understand and apply the stock ownership rule,” he wrote. “Being informed of what could be viewed as an ethical violation, even a technical one, is no fun.”

R. Brooke Jackson, David Norton, Sharion Aycock

Judge David Norton in South Carolina presided over six asbestos suits beginning in 2012 while his disclosures show he held between $95,004 and $250,000 of stock in two defendants, 3M Co. and GE. In 2015 he heard a case filed by James Chesher, who alleged that he developed cancer from exposure to asbestos in the Navy. Mr. Chesher and his wife sought damages from 3M, GE and about two dozen other companies. They reached settlements with 3M and GE in 2016.Mr. Chesher died in 2017. His widow, Cheryl Ann Chesher, was surprised to learn from the Journal of the judge’s financial interest in GE and 3M.“He should have policed himself,” Ms. Chesher said. “He knows what the law is on that and he should have followed through,” she said, adding: “You have to wonder if he’s looking out for himself...rather than the clients.” In an emailed statement, Judge Norton said he didn’t recuse himself because 3M and GE played no significant role in the suits and were “defendants in name only.” He added: “At the outset the lawyers involved in these cases assured me that 3M and GE would be dismissed and not involved in the case pursuant to a pre-existing agreement between the plaintiffs’ lawyers and GE and 3M.” Peter Kraus, an attorney for the Cheshers, said he and his co-counsel “have no recollection about making any assurances to the judge that GE and 3M would be dismissed.” They “were sued because the evidence in the case implicated them, and were certainly not ‘defendants in name only,’ ” he said, adding that attorneys for both companies participated in depositions.

A 3M spokeswoman said neither the company nor its attorneys ever assured the judge regarding any dismissals. A spokeswoman for GE didn’t respond to questions about whether it had conveyed such an assurance. An attorney for GE said she didn’t recall the case.Told what 3M and the plaintiffs’ attorney said, Judge Norton reiterated his recollection of the case.

As remaining asbestos defendants moved toward trial, Judge Norton, a George H.W. Bush appointee, issued rulings that broadly benefited companies with asbestos liabilities.In hearings, he took aim at the theory behind the cases: that any exposure to asbestos was significant enough to contribute to their cancer.

The defendants said the plaintiffs’ expert witness shouldn’t be allowed to testify because he was unable to show that the men more likely than not would have avoided the disease but for their exposure to the asbestos. Judge Norton sided with the companies, ruling that the expert witness’s testimony—“scientifically sound as it may be”—couldn’t be presented to a jury.

The ruling drew national attention. Plaintiffs’ lawyers denounced it, while lawyers who often defend corporations embraced it as common-sense analysis. A Harvard Law Review article blasted it, saying that “unrealistic legal expectations of science could do great injustice.”Mr. Kraus, the Cheshers’s attorney, called the decision out of sync with court precedent on liability in asbestos cases.

Other courts have adopted Judge Norton’s analysis, including the Ohio Supreme Court. Mr. Kraus said he has never asked to see a judge’s financial disclosure form. He said he wasn’t sure he ever would. “If a judge who is considering a matter you have before him finds out that you’ve been snooping around about his finances, I’d be very concerned as a practitioner that it would cause a negative backlash that would affect my clients’ rights in the court,” Mr. Kraus said.

Judge Norton also violated an ethics rule when he bought a box of cuff links at an auction of the government-seized property of a man he earlier sentenced to prison for a Ponzi scheme, according to the chief judge of the Fourth U.S. Circuit Court of Appeals.“The judge’s purchase did create an appearance of impropriety,” though it didn’t affect the sentence imposed, Chief Judge Roger Gregory wrote in 2017, without identifying the cuff links buyer.

Judge Gregory quoted the unnamed judge as saying he tried to “keep current on all ethical rules and take the yearly ethics test prepared by the Administrative office” but was unaware that his participation in the auction could create the appearance of impropriety.

Judge Norton, who confirmed in a separate filing that he bought the cuff links, told the Fourth Circuit: “Now that I have been made aware of this, my actions will not be repeated.”