Blog Entries for kcates

Consumer protection agency would burden banks? Precisely.

karlcates@verizon.net — Thu, 25 Feb 2010 23:00:00 +0100

For better or for worse, the proposed Consumer Financial Protection Agency - already being shrunk in Washington shorthand to CFPA - would create another level of government bureaucracy.

Its advocates have a two-word response: "So what?"

If the agency, as its supporters envision it, burdens the banking industry with another set of rules and enforcement, oh well, mission accomplished! On Thursday, however, came sudden word that the Obama administration is willing to [...]

On banking reform, a bipartisan sighting

karlcates@verizon.net — Sat, 20 Feb 2010 23:00:00 +0100

So maybe we're not such a purple nation, after all. Red is red and blue is blue and they're not mixing, especially if you're using bipartisanship in Washington as a gauge. Regulatory reform of banks is a good example. The party in power would if it could resurrect Glass-Steagall, but that's not going to happen unless they rewrite the rules of the Senate and grant simple majority rule.

And they're not going to rewrite the rules, which is why reform has pl [...]

The often-underestimated Internet-driven backlash

karlcates@verizon.net — Tue, 16 Feb 2010 23:00:00 +0100

In what seemed at first blush a weird collision between lowbrow Internet and high-n-mighty government agency, the Federal Depository Insurance Corporation has been busy doing damage control on a YouTube video.

That the FDIC is responding at all to something on YouTube is news in itself, illustrating how Web-based backlashes have grown in influence. Grass-roots Internet campaigns - or those that advertise themselves as grass-roots campaigns - are a throwback to the pamphlete [...]

Tinker, Tailor, Computer Programmer, Spy

karlcates@verizon.net — Sun, 14 Feb 2010 23:00:00 +0100

Okay, as far as I know Sergey Aleynikov isn't a tinker or a tailor. But he is a computer programmer, and prosecutors say he's a spy as well.

In an indictment unsealed the other day in U.S. District Court in Manhattan, Aleynikov is accused of ripping off Goldman Sachs by spiriting away some of its magic formula. I know, the idea of somebody ripping off Goldman may only draw shouts of Robin-Hood glee, but prosecutors say it's not quite like that and that Ale [...]

A daring rate increase by a big insurance company

karlcates@verizon.net — Thu, 11 Feb 2010 23:00:00 +0100

In the you've-gotta-be-kidding-me category of recent news comes word that WellPoint, the big California health-insurance company, wants to increase rates by 39 percent.

To be fair, the company pointed out in a letter on Thursday to Health and Human Services Secretary Kathleen Sebelius, the increase only affects customers who aren't members of group plans and have to buy their own insurance. Still, that's 800,000 people. To be fair again, the company says [...]

Snow day: an affirmation of the value in telecommuting

karlcates@verizon.net — Tue, 09 Feb 2010 23:00:00 +0100

As a blizzard blitzes the East Coast today, millions of workers sit home idle and trapped by a vagary of Mother Nature that provokes the National Weather Service to post no-travel warnings.

The economic cost of this standstill is anybody's guess, but to get a sense of the impact, consider how the federal government is in its third consecutive day of work stoppage because of the one-two weather punch the Washington, D.C., area has endured this month. And yet, as (the) US [...]

The CFO Nightmare Before Easter

karlcates@verizon.net — Mon, 08 Feb 2010 23:00:00 +0100

As professional horrors go, they probably don't get a whole lot more unsettling than Joe L. Price's.

Price, the former CFO at Bank of America, must be tossing and turning lately, what with the attorney general of New York naming him personally last week in a lawsuit over the bank's handling of the ugly Merrill Lynch acquisition/investor-subsidized bailout/compensation party in late 2008.

Now, Price and former BofA CEO Ken Lewis face another unpleasa [...]

The financial crisis: a silver lining for IT?

karlcates@verizon.net — Thu, 04 Feb 2010 23:00:00 +0100

Look around a little bit and you find a horde of anticipation that corporate spending on technology - after a painful slump in 2009 - is destined for a rebound in this New Year, almost 10 percent spent already. Yesterday's banner headline in the WSJ trumpeted the news that Cisco Systems was hiring 3,000 people to keep pace with a surge in demand. The significance of the story came mostly from Cisco's stature as a harbinger of things to come.

That was before the Dow d [...]

Chris Dodd is acting like a bank lobbyist

karlcates@verizon.net — Tue, 02 Feb 2010 23:00:00 +0100

Chris Dodd's scolding of the Obama administration on Tuesday for wanting to do "too much" to restore banking regulation sent me into a short trance and a vision of the future: Dodd as banking lobbyist.

Here's the Dodd quote if you don't believe it: "I don't want to be in a position where we end up doing nothing because we tried to do too much."

It's an outlandish supposition, one may say, to have the chairman of the esteemed Senate Banking C [...]

Naked came the swap

karlcates@verizon.net — Sun, 31 Jan 2010 23:00:00 +0100

Ever read "Naked Came the Stranger," that 1969 hoax in which a bunch of newspaper literati got together anonymously and wrote a terrible pulp novel with gratuitous sex and betrayal as a send-up of bad popular fiction? Me either, but it was a huge hit and its writers were said to have been simultaneously sickened and enriched.

Naked credit-default swaps are also kind of sickening but clearly those who dabble in them aren't put off by the stench. The good news is tha [...]

Davos: Does it serve much purpose?

karlcates@verizon.net — Mon, 25 Jan 2010 23:00:00 +0100

There probably aren't going to be a lot of grinning-banker photo ops this year out of Davos. Organizers of the World Economic Forum – where scholars, titans of finance, regulators and the business press rub shoulders at high altitude every winter – are said to have draped events in a subdued tone.

Felix Salmon, for one, is skeptical as to whether it will be an effective performance. Salmon writes a scathing dispatch today under a dateline from the Swiss town, saying he&# [...]

Glass-Steagall stirs in its grave

karlcates@verizon.net — Thu, 21 Jan 2010 23:00:00 +0100

The "change" president, finally, might actually change something.

"It's a fight I'm ready to have," Barack Obama says on TV in taking a stand against the decade-old racket that lets commercial banks take customer money and go a-gaming with it. This of course is the politically astute thing to say in these troubled times. But the White House stagecraft this week adds gravitas to the rhetoric by bringing Paul Volcker in from the cold and standing him up [...]

How a CFO ran afoul of the SEC

karlcates@verizon.net — Tue, 19 Jan 2010 23:00:00 +0100

Buried beneath all the vast Internet chafe of news blurbs and press releases are untold numbers of gems that shed light on how corporate officers shouldn't behave. One of them includes a recent analysis by two Chicago lawyers who found a cautionary tale in an obscure SEC settlement filing from this past fall.

The story revolves around one Christopher Black, who in the summer of 2007 was the chief financial officer for American Commercial Lines, a publicly trade [...]

China is a garden; China is a minefield

karlcates@verizon.net — Sat, 16 Jan 2010 23:00:00 +0100

There's actually a book -- I'm not kidding -- called "Doing Business in China for Dummies."

It's marketed as a "fun and easy way to grow your business in China," which on its face makes it sound a little too fun and easy. Nonetheless, forewarned is forearmed, and one Amazon review of the "Dummies" guide hints at some of the potentially blind hurdles a Western business faces when it goes into the most populous economy in the world: [...]

Chinese rain on the cloud-computing parade

karlcates@verizon.net — Tue, 12 Jan 2010 23:00:00 +0100

So Google is finally biting back at the Chinese government hand that feeds. Note that the search-engine gorilla is doing so only after finding out it was violated in a big way this past fall by some person or maybe legions of persons within the Middle Kingdom.

According to accounts published all over the place (but perhaps not in China), information for 34 companies or organizations that use Google was breached in a series of cyber attacks. Evidently mo [...]

A Mexican standoff in the U.K.

karlcates@verizon.net — Sun, 10 Jan 2010 23:00:00 +0100

A Mexican standoff is shaping up between U.S. bankers and regulators in the U.K. over a 50 percent surtax on bonuses.

And what's more watchable than a Mexican standoff? Doesn't matter where you come down on this issue, it's a riveting showdown -- stakes are high!

One side sees it as slippery-slope social engineering and market tampering. The other (and probably the biggest, if you're just counting heads and not assets) thinks it's a justified [...]

AIG Confidential

karlcates@verizon.net — Tue, 05 Jan 2010 23:00:00 +0100

Congress is acting like a nest of mad hornets on word that the New York Fed hid some details of AIG’s credit-default insurance payouts to big banks in late 2008.

Recall that the government was in the midst of pouring $180 [...]

Will Chris Dodd go down fighting?

karlcates@verizon.net — Tue, 05 Jan 2010 23:00:00 +0100

As Christoper Dodd prepares to ride off into the sunset, the central drama of his departure is how much punch he has left for financial regulatory reform.

The Connecticut senator, chairman of the Senate banking committee, is the chief author of the Senate's version of a bill that would impose greater oversight over and more transparency into the securities industry. His bill is the counterpart to Rep. Barney Frank's proposal in the House and would in effect expand how cre [...]

The tax man cometh (and cracketh down)

karlcates@verizon.net — Mon, 04 Jan 2010 23:00:00 +0100

Mandated competency is coming finally to the tax-preparation industry. The IRS this week announced plans to make anybody who charges a fee to fill out a tax return register with the federal government. Those who aren't formally schooled in the fine art of tax filing will have to go through 15 hours of continuing education each year (relax CPAs and lawyers, your professional stature earns an exemption from the education requirement).

The federal program more or less mirrors on [...]

2009: the year of the Wall Street book

karlcates@verizon.net — Wed, 30 Dec 2009 23:00:00 +0100

The stock market roared, the regulators stirred, the unemployment rate soared and the banks continued to show great reluctance to lend money.

What else happened in 2009? Oh, right, there was a tremendous binge of book publishing related to the financial crisis that began in the summer of 2008 - and Henry Paulson's version of events isn't even out yet (coming soon - Feb. 1 - to a bookstore/online warehouse near you).

In an article published the night before Christmas [...]