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The race is on! US Banks are desperate to pay back the TARP funds they borrowed from the taxpayer so that the we don’t actually expect to have a say in how much they pay the so-called “best and brightest”. I will fore-go discussing how the financial industry, which brought the world to its knees and a huge cost to taxpayers around the world, could possibly continue to delude themselves into thinking they are the smartest people on the planet because, well, errr, its insane! Do the people running GM and Chrysler think they are the smartest auto-execs? Does the country perceive them to be? Enough said.
Continue reading Bank Bonuses at Shareholders and Taxpayers Expense!
You are probably asking yourself why I would ask such a question, General Electric is coming back from the lows it saw during the recession. The answer is that General Electric paid a $50 million fine to the Securities and Exchange Commission last month to settle accounting fraud charges. The Judge in the case rubber stamped the deal (unlike brave and ethical Judge Rakhoff in the Bank of America case) and it was quietly reported by the media without much emphasis. As a result, the outcome is exactly what was intended: the SEC can pretend it held the company to account and the management responsible are still at the helm while the shareholders pay the fine (and paid bonuses to the same management based on fraudulent earnings).
Continue reading Should General Electric CEO Jeff Immelt Resign?
Ex-Federal Reserve Chief Alan Greenspan outlined in a speech to Tokyo Clients of Deutsche Bank, his concern for inflation pressure in the United States “ It’s the politics in the United States that worries me, whether the Congress will basically feel comfortable with the Fed withdrawing its stimulus…if inflation rears its head, it will swamp long-term markets,” referring to bonds. He went on to say “the U.S. must rein in its “very dangerous” level of debt, citing the threat of increased issuance of Treasuries undermining the dollar. According to Bloomberg News, Greenspan went on to say that if there were a significant issuance of Treasury securities that increased the national debt, “there would be of necessity downward pressure on the dollar.” At the same time, he said, “you can’t say that without saying what the counterparty currency would be….Very Dangerous”. All I can say is why does anyone care or better yet pay to hear what this man says anymore? By his own admission he did not see the financial crisis coming something, many other economists and analysts predicted for years. Secondly, it can be argued that it was his policies, economic theories and politics which caused the crisis in the first place!
Continue reading Greenspan Worried About Inflation and Debt: Does Anyone Care What He Thinks?
In a ruling yesterday which took many by surprise, Judge Jed S. Rakoff refused to accept a $33 million settlement by Bank of America that would have resolved the Securities and Exchange Commission’s (SEC) that the bank deceived shareholders in November about bonuses to be paid by Merrill Lynch, which the bank was in the process of buying. Judge Rakoff accused the SEC and Bank of America of devising the settlement as a means of absolving themselves of further responsibility, and bringing to a quick end, an embarassing situation for both.
Continue reading Judge Holds SEC Accountable for Regulating Wall Street!
This weekend’s New York Times gave us insight into a problem that links economics and ethics in a very meaningful way. The first is the story of Treece, Kansas, where residents are seeking a government buyout and relocation of their town which sits on contaminated soil. Their sister town in Oklahoma, separated from Treece by a gravel road, has already received a Federal buyout and all but a handful of their 1,800 residents have been relocated. You see, this area was the epicentre of a vast mining district, rich in lead, zinc and iron ore. After the last mines closed in the 1970’s, the towns were left sitting on a toxic waste-dump of lead tinged dust, contaminated soil and sink holes. The second is a well researched and written report on the state of the nation’s drinking water which showed that one in 10 Americans have been exposed to drinking water that contains dangerous chemicals or fails to meet federal health benchmarks in other ways including carcinogens in the tap water of major American cities.
Continue reading Pollution is a Corporate Subsidy
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About this video This video seemed appropriate for the anniversary of the Lehman Brothers bankruptcy which was the catalyst for the financial crisis to spread around the world very quickly! The lack of ethics on Lehman CEO Richard Fuld's part can only be eclipsed by his ego and total disregard for anyone but himself. It begs the question of whether any of the players who clearly misled shareholders and regulators will ever be called to justice.
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