On The Record

Thank you to New York Attorney General Andrew Cuomo and US Treasury Department Special Investigator Neil Barofsky for bringing civil charges of fraud against Bank of America and its former CEO Ken Lewis and CFO Joseph Price.  Regulators are charging that BofA lied about its fragility in order to secure federal funding to solidify its position and ensure the acquisition of the floundering Merrill Lynch.  Much of that taxpayer money ended up being doled out in bonuses and allowed B of A to carry on business as usual while the rest of the economy was barraged with shrapnel from the bubble burst.   These charges reflect our justice system at work, and offer hope of reform and reconciliation for our twisted economy. 

Bank of America received another well deserved pockmark today with the announcement of its $150 million dollar settlement with the SEC for similar charges and, lo and behold, a suggestion that the ongoing investigation could lead to criminal charges.  All of this comes on the same day as the announcement of a settlement between state and federal regulators with State Street Bank, which will pay $313 million to atone for its role in misleading investors regarding exposure to sub-prime mortgage holdings at the outset of the credit crisis.  State Street’s settlement even came with a conciliatory statement, the likes of which have been all to absent in the past decade of reckless profiteering. 

Let us hope that we are moving in the right direction as a nation where we will once again have responsible corporate leaders and a system that enforces its rules.  In the past 10 years accountability has all but disappeared from the corporate landscape leaving us stuck in the quagmire of a floundering economy.  America needs to roust its corrupt business leaders from their legalese hideout to admit their mistakes.  With the return of accountability, we have the hope of restoring this once great nation.

Bank of America charges and settlement:

http://www.washingtonpost.com/wp-dyn/content/article/2010/02/04/AR2010020402146.html?hpid=topnews

State Street settlement:

http://www.boston.com/business/ticker/2010/02/state_street_in.html

Artists Unite

 

Thank you to the collection of artists who are working to release an update of “We Are The World” to bring attention to the crisis in Haiti.  Efforts like this do linger in the public conscience for ever afterward.  I remember the original “We Are The World” when it came out, and though I preferred Band Aid’s “Do They Know It’s Christmas,” the efforts of so many artists to collaborate and create an everlasting song for such hardship was truly sobering and inspiring.  My mind is still startled to attention each time I hear those songs, their cause renewed and hope rekindled.  As resolute and productive as last month’s Haiti tribute was, it was a singular event.  The songs from that event are available and selling tremendously, though I haven’t heard any of them on the radio.  A charity single offers the prospect of endurance.  With each second of airplay, a reminder is sent throughout the ether, springing the cause to the forefront of our minds.  Just as the scurge of Ethiopian famine receded from the headlines, it is inevitable that Haiti’s plight will diminish from the media’s spotlight in favor of a new story.  Yet the crisis will remain, and no matter how well the country may one day heal, we can always be reminded of how tragedy brought artists, so often maligned for offering political opinions, to dutiful action.  I’ve never understood criticism of artists who try to use their celebrity to bring attention to a cause, if you don’t believe in it, you can just ignore it.  Artists have achieved fame for other efforts, whereas politicians have achieved fame based on the pretense of representing the people’s voice.  Most times when we see politicians rallying an issue, it is simply to extend their own coverage in the hope of extending their power, not because it is the true interest of their constituency.  The current program of obstinance in Washington is simply an exercise of undermining the opposition regardless of the cost to the people.   Showbusiness is certainly a minefield of warring egos, but this horrible disaster has riveted so many to look beyond themselves, work together, and use their fame for a good cause.  That’s a good lesson for us all.

http://news.yahoo.com/s/nm/20100202/music_nm/us_quake_haiti_song

Further Reading

Below is an excellent piece on the sad state of modern politics which, besides being an exercise in obstinance, is ultimately a game of distraction.  Those facts are nothing new but it is sad to see how uninformed and self-righteous voters can be.  Our politicians are well aware that we will not only ignore but even take umbrage at carefully presented facts in order to act directly against our own better interests.

http://news.bbc.co.uk/2/hi/americas/8474611.stm

Island Nation

Day after day goes by and the malaise not only spreads but thickens throughout America.  Horrific calamities like the devastation in Haiti catch our attention but are unable to penetrate our nationwide cynicism.  Rather than offer a jolt of light into our darkened conscience to provide perspective and renewed purpose, we remain blinded by the petty grievances of our situations.  The headlines, held captive by the never ending cyber/Twitter/24 hour cable news cycle shout at us with relentless hyperbole begging for monetary distraction.  Whether it’s the fear factor of a massive amount of Toyotas that accelerate on their own like characters in Stephen King’s Maximum Overdrive or the trigger of compulsive want ignited by the new giant iPhone (excuse me, iPad), we are inundated by a constant wave of storylines to keep us spinning. 

And spin takes on an entirely different dimension in Washington, where our elected leaders refuse to address the great many needs of our fading nation in order to focus on their own party numbers.  This is a fact that has become all too apparent in the week since the State of the Union address in which our President’s call to action through bi-partisanship has been scoffed at by the Republican party.  Whether you witnessed the caustic meeting with the Republican House on CSPAN or are willing to take the word of any number of news outlets, there is a unified opposition to compromise.  Though I have just focused on the Republicans, let me be clear that the Democrats are equally responsible for their years of outright refusal to cooperate with the previous administration.  And under the current one, they have omitted an air of superiority and righteousness that is completely oblivious of their own ineffectiveness.   

This is a sad time in America.  Our country is quickly losing its grip on its global pre-eminence.  And this may not be so devastating if there were another nation poised and equipped to take the lead.  Yet despite India’s burgeoning growth, China’s economic development, and the EU’s continued strength, the world is without leaders.  As our world gets smaller, we seem to grow further isolated from one another.   The goal of the 21st century seems to be personal wealth, to hide in a corner and sneer at the rest.  But like a primitive that hordes its quarry rather than share with the tribe, security is only temporary.

Action

What a relief to see that the Obama Administration is finally taking strong action to limit the power of super-banks in U.S. economy. This move is both encouraging and over due, despite the initial panic reaction being seen by investors. As detailed in previous articles listed on this page, the repeal of the Glass-Steagall Act in 1999 has had a calamitous effect on our economy and brought us into this time of realing. To see Paul Volcker finally being allowed a vocal role in the administration’s economic policy is a very welcome site. The pain may come now for those riding Wall Street’s status quo, but too many have improperly soared on borrowed wings and now it is indeed time to bring competition back into banking.

http://online.wsj.com/article/SB20001424052748703699204575016983630045768.html

Common Sense Hailed As Innovation.

To give everyone an idea how backward healthcare administration is in this country, read the following report touting the bold innovation instituted by CIGNA, making Quicken software available to some its members.

Only now, under the treat of regulation, does one the nation’s largest carriers make a step to help members organize their own healthcare records by offering access to a software program widely available to the public for decades. We’ve got a long way to go to fix this mess.

Story:

http://www.healthcarefinancenews.com/news/cigna-makes-quicken-software-available-health-plans

A Root of the Problem

Great article below uncovering a root of our current financial disaster.  The euphoria of prosperity clouded reason.  Despite the hysteria, a few were wise enough to see the inherent dangers and voice their dissent.

We must never forget that the past is a guide to our future.

http://www.nytimes.com/1999/11/05/business/congress-passes-wide-ranging-bill-easing-bank-laws.html

Numbers without Meaning

Numbers without Meaning

I’ve been avoiding the furor over bailout spending and executive payouts for 2 reasons, previous coverage and exhaustion.  After dedicating much of this space to TARP earlier in the year, I was pleased to see the media push the issue into the spotlight.  The story is now ubiquitous, cavernous, incessant, and, despite my contempt for corruption, I’ve grown weary.  But the story below has blown my mind and made the wound fresh again.

Apparently Goldman Sachs is planning to return its TARP funds by mid-April.  The move is not the result of any newfound stability within the operation.  Instead, it is a means to avoid public scorn for being a corrupt, inept, and disorganized institution completely out of step with reality.  Rather than acknowledge nationwide frustration with a company that saw its net-worth plummet into oblivion while at the same time setting a record for executive compensation, Goldman Sachs hopes to obscure itself from its role in sinking the country by giving back the $10 billion in TARP funds that were absolutely essential for their survival just a few months ago.  By giving the money back, the bank hopes to escape from the public relations disaster.  And they are not alone, JP Morgan Chase, who plan to spend $138 million on two new corporate jets and a luxury airport hangar, also plan to return their TARP funds to the government.  Once they do, they’ll go ahead and finish their air travel upgrade, free of any public dissention.  After all, Jaime Dimon, JP Morgan’s CEO was quoted just two weeks ago saying, “When I hear the constant vilification of corporate America I personally don’t understand it.” Clearly.

Of course you don’t, Jaime, neither do any of your colleagues.  What is more troubling is that none of you are willing to understand it.  The bailout was intended to keep the foundations of our economy intact by keeping your businesses alive. Now, more than ever, it is clear you should have been allowed to fail (that would have been better for you, as then your bonuses never would have been under the threat of congressional rescission).  You refuse to learn from your mistakes and develop better, more efficient business models.  You are intent on running everything straight into the ground so long as you can continue to line your overstuffed pockets.  You claim that bonuses are essential to retain your top talent. Your companies have all devalued and eroded the global economy, you don’t have any talent.  You did not require government funding, you just got in line for free money that the government never should have offered.  But you took it, saying it was necessary.  Now, under pressure for inept practices, you are eager to return it, despite no considerable gains in your performance. You have no credibility, no integrity, and deserve no respect.  Oblivious to the frustration of millions, whose lives are stalled and even destroyed by your greed; continue on in your opulent, wayward, stupor.  You are worthless.

Goldman Sachs to Return TARP Funds by Mid-April:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aW2jw0bHcg3s&refer=home

JP Morgan Chase Spending Millions on New Jets and Luxury Private Airport Hangar

http://abcnews.go.com/Blotter/WallStreet/story?id=7146474&page=1

Chase Will Repay TARP Funds Before Making Jet Purchase:

http://dealbook.blogs.nytimes.com/2009/03/23/jpmorgan-to-proceed-with-new-jets-and-hangar/?hp

Expanding Out By Dumbing Down

Expanding Out By Dumbing Down

NBC Universal is changing the name of its SciFi Channel to SyFy based on a myriad of considerations including everything but proper use of the English language.  In order to offer a “broader range of content,” and have trademark control of the brand, NBC Universal will make it easier for people to forget the proper origins of its (granted, abbreviated) name.  Just as doughnuts became donuts and drive throughs became drive thrus, sci-fi will only bear a scant trace of its original foundations, science and fiction. Soon enough, SyFy will enter the lexicon of blogs, texting, and likely find its own dictionary entry.  Make no mistake, this is entirely due to corporate policy, i.e. greed; the need for a brand to be “own-able, portable, extendable.”  And I have to say that I agree that it makes perfect business sense, you should be able to control your own brand.  But I have a problem with the collateral result of empowering a bunch of idiots who will have even further difficulty being able to spell properly.

I am not a fan of text-speak, questions beginning with contractions, or dumbed down abbreviations.  Moreover, I don’t find corporate creations legitimate additions to the language.  You will not ever see me describe something as gr8 when it is, in fact, great. Language is beautiful and sacred.  It is organic and evolving.  Lexicon changes based on oral expression, and further feed written language.  This is why we, mercifully for the sake of time, no longer express ourselves like Geoffrey Chaucer.  Just as “on the morrow” is replaced by the more direct “tomorrow”, slang terms like “trainspotting” and “hook-up” rightfully find their space in official dictionaries.  But corporate constructs and laziness do not represent linguistic evolution.  They serve to further devolve the language.  Though the trend will continue and be inconsequential to most, I will be happy to voice my opposition.

http://www.reuters.com/article/televisionNews/idUSTRE52F34W20090316

Rather Then Let It Crumble, Take It Down Brick By Brick

Rather Then Let It Crumble, Take It Down Brick By Brick

These days it is hard to look at the news without feeling daunted, dismayed, or disgusted.  Most stories, particularly anything involving financial services, cause us to feel all three.  I have been rendered inert by the preponderance of bad news flooding our society.  Revelations of corruption, extortion, and moral ambiguity by what were once seen as conservative pillars of responsibility have become so extensive that it is hard to know where to start.  Yet it is therefore a time when it has become more important than ever to be engaged and voice opinions.  Otherwise these travesties will continue on, and in greater number than they already have.  That is the lesson learned from the fleeting outrage brought by the collapse of Enron, Tyco, and WorldCom earlier this decade.  After only 5 years, we have been besieged by the complete pollution of the American finance, auto, and insurance industries.  Corruption is inherent in mankind and therefore eternal, but it can be tempered by an active society.  Technology has enabled us to find more forums, this blog being an example, but it has also allowed us to withdraw further into isolation with ipods, blackberries, and cell phones.  With multiple outlets, it is increasingly difficult to find a wide audience.  Major media outlets are all controlled by large corporations and have their own agendas, and when a comedian like Jon Stewart provides the loudest voice for journalistic integrity it is clear we are living in a state of decay.  But rather than succumb to the pollution that surrounds us we should root it out, reconstruct, and build anew.  This is an unprecedented time that requires renewed and profound vigilance.  All is not lost, there is still positive to be found, Jon Stewart being an example.  His frustration should inspire greater concert to us all to speak up and become involved.  Let the outcry shake out the corrupt in our government and our industries.  Let them hear from us on the streets and in our offices, as well as on the web.  This November marked a major step for change in our political system, but necessary work ahead will not be done solely by who in office.  We have to remain engaged for anything positive to take shape.  Prosperity will not be delivered, it is up to us to create it.