Blog Entries tagged 'Obama Administration' Blog Entries tagged 'Obama Administration' Sun, 02 Jun 2013 04:42:24 +0100 FeedCreator 1.7.2 Geithner against government involvement in executive pay decisions

According to a report on Reuters, on Monday Treasury Secretary Timothy Geithner said that the government should not be involved in setting corporate executive pay levels. 

What impact, if any, this will have on how regulation of compensation plays out is unclear, but it does once again bring to the fore the arguments on both sides of the executive pay discussion.

The ability of companies to leverage executive [...] Sun, 07 Nov 2010 23:00:00 +0100 Timothy Geithner Obama Administration Morgan Stanley executive pay executive compensation Credit suisse Careers/Management Keynes' biographer skewers deficit hawks

This piece published today by Project Syndicate is as insightful a critique as I've seen of the consensus that has emerged among policymakers that government deficits must be cut to restore economic growth.

Not that we haven't taken a stab at that ourselves.

But Skidelsky has authored a biography of Keynes, so he knows the economics here a whole lot better than we do and can put them into language that strikes much closer to home.

The writer, who also happens to be a [...] Tue, 17 Aug 2010 23:00:00 +0100 recovery recession Obama Administration government finance global economy Federal Reserve Fed economy ECB demand default career/management When confidence is merely a con

A column published on Tuesday by Project Syndicate sums up the world's flailing (if not downright cynical) response to the financial crisis in particularly apt terms, I'd say.

The governments' efforts to restore confidence in the banking sector without really addressing the causes of its loss of confidence is akin to trying to tickle oneself, observed Paul Seabright of the University of Toulouse in the piece, entitled "Financial History's False Lessons." Tue, 03 Aug 2010 23:00:00 +0100 Timothy Geithner Regulation Obama Administration financial crisis EU compliance Banks banking reform banking industry Banking bailouts The battle to reform banks is far from over

Anyone who thinks the financial reform bill is all that was necessary to finish fixing the banking system needs to read a couple of pieces published in recent days.

As Simon Johnson points out over at Baseline Scenario, a new paper by several respected academics shows that the stiffer capital requirements that the Obama administration is focused are not only easily gamed, but can have major unintended consequences, and these can amount a repeat of the systemic crisis we saw two years ag [...] Wed, 28 Jul 2010 23:00:00 +0100 Risk Regulation Obama Administration Federal Reserve compliance Banks banking reform Banking Time to reread Keynes

I've avoided rehearsing the on-going debate over the bleak macroeconomic picture, because it quickly descends into endless political back and forth along with the usual name-calling, as my colleague Steve Taub and I have been discussing internally today.  But it's time to make an exception:

Is the private sector not hiring because it fears more aggressive action from the public sector, and so the public sector (read Obama administration) should leave the economy to itself [...] Mon, 26 Jul 2010 23:00:00 +0100 recovery recession Obama Administration jobs joblessness investment financial crisis environmental policy energy employment economy demand Congress Careers/Management Why companies aren't spending

There's a political debate heating up about companies' hesitancy to invest the cash they're sitting on.

Essentially, the Democrats--or at least those in favor of further government stimulus measures such as a jobs program or at least extended unemployment benefits--argue that companies are wary of spending because of the lack of aggregate consumer demand.

The GOP--or those in the party who oppose stimulus in favor of austerity or at least tax cuts--prefer to explain th [...] Wed, 07 Jul 2010 23:00:00 +0100 recovery recession Obama Administration Obama jobs joblessness employment economy earnings demand cash position cash management Cash capital expenditures capex The financial crisis is only "on pause"

There's some additional recent work out there that's worth citing in connection with Karen's post on Tuesday.

In particular, I would point readers to the piece posted Monday on by Enrico Perotti, a finance professor at the Amsterdam Business School. Essentially, Perotti's piece explains why Kotlikoff's prescription is necessary. As it did the US Congress, the banking industry has fought off international attempts to get the so-called Basel Committee to force the indust [...] Tue, 06 Jul 2010 23:00:00 +0100 Volcker Rule Risk Regulation Obama Administration financial market reform financial crisis Congress compliance Banks banking reform Banking bailouts Letting Geithner off easy on the TARP

Tim Geithner once again says taxpayers are getting a good return on the funds they provided banks through the Troubled Asset Relief Program.

And his line about 75 percent of the money being repaid may be true enough. It may even reflect this uncomfortable fact.

But 91 banks missing their dividend payments last month is hardly something to write home about.

I'll let Yves Smith go on about how bad the deal was for taxpayers from the  go.

(But here's the mon [...] Tue, 22 Jun 2010 23:00:00 +0100 Timothy Geithner TARP Obama Administration financial market reform financial crisis Congressoinal Oversight Panel compliance Banks banking reform Banking bailouts BP's market value shows reputation gone

The surest sign that BP's reputation has is worthless is the fact that its stock's market value is now about equal to the book value of its assets. After all, any premium over book value is normally considered to reflect a company's intangible assets, and in BP's case at the moment, its primary intangible is reputation, or rather the lack of one.

So observes Charles Mulford, an accounting professor at Georgia Tech and an editorial advisor to CFOZone.< [...] Thu, 17 Jun 2010 23:00:00 +0100 Risk oil production Obama Administration cash flow cash concerns Cash BP's legal options

With more than 100 federal and state cases already having been filed in connection with the Deepwater Horizon oil spill, it is hardly surprising that BP has hired advisers to help it sort out and control its liability exposure.

As Ron Fink reported on June 7, BP has waived its right to seek protection under a federal law that could have limited its liability to $75 million.

But that is not to say the compan [...] Tue, 15 Jun 2010 23:00:00 +0100 risk management regulatory framework Obama Administration liability management corporate liability Cash BP The Fed once again proves to be a regulatory pushover

Anyone who thinks the Federal Reserve ought to oversee systemic risk ought to take a close look at this article.

By now, of course, it's no surprise that banks used yet another financing gimmick to make their capital look stronger than it really was. This one, involving Trust Preferred Securities known as TruPS, is doubly gimmicky, in so far as it involves both hybrid securities (i.e., a have your cake and eat it combination of debt and equity) and off-balance-sheet treatment. In te [...] Tue, 08 Jun 2010 23:00:00 +0100 Timothy Geithner Regulation Obama Administration financial market reform financial crisis Federal Reserve Federal Deposit Insurance Corp. Fed Enron compliance Banks banking reform banking industry Banking Why deeper financial reform remains necessary

Despite the prospective "success" of financial reform legislation, my sense is that very little will change on Wall Street as the bills passed by the House and Senate are likely to emerge from conference committee. And that will prevent any economic recovery that isn't just another asset bubble in disguise.

The fundamental problem, or at least one such obstacle, as I see it, is that reform as currently likely will do little or nothing to restructure the banking industry, i [...] Tue, 01 Jun 2010 23:00:00 +0100 Volcker Rule unemployment Timothy Geithner Risk recovery recession Paul Volcker Obama Administration Geithner financial crisis Congress compliance bubbles Banks Banking Another road to serfdom

As a follow-up to yesterday's rant, I see that investors are applauding the moves of European governments to reduce their budget deficits, as if the answer to deflation is more deflation.

Hasn't anyone ever heard of Keynes and the false dawn of 1937?

Rather than repeat myself, however, I would point to this dystopian projection by University of Missouri economist Randall Wray. It's a tragicomic description of where things are headed given the nearly world-wide re [...] Wed, 26 May 2010 23:00:00 +0100 Timothy Geithner Risk recovery recession Obama Administration jobs global economy financial crisis eurozone Euro area economy Careers/Management bubbles Banks bank failures bailouts alternative energy What to do about Fannie and Freddie

Gretchen Morgenson's piece in Sunday's Times points out how Fannie Mae and Freddie Mac are serving as a source of back-door bailouts for the banks.

And she quotes Dean Baker, co-director of the Center for Economic Policy Research in Washingto,n DC, to the effect that their continuing status as half governmental agency, half private enterprise creates an irreconcilable conflict between taxpayers and shareholders.

While Treasury secretary Tim Geithner acknowledges the proble [...] Sun, 09 May 2010 23:00:00 +0100 Timothy Geithner Risk Obama Administration Geithner Fannie Mae Congress compliance Banks banking reform Banking bailouts Why health-care reform could dampen small-company hiring

Surely, the last thing the Obama administration and Congress intended with the recent passage of health-care reform was to discourage small-business growth. But, as it turns out, that's a distinct possibility.

The culprit is a new tax credit aimed at helping small businesses and tax-exempt organizations offer health insurance to their employees.  Or, to be more precise, stipulations about what type of companies can receive help.

 The tax credit, according to the Int [...] Thu, 29 Apr 2010 23:00:00 +0100 small business Obama Administration Internal Revenue Service In compliance health-care reform Geithner may be getting more religion on banks

Lost in the hubbub over the end of the GOP filibuster of bank reform and Goldman Sachs' role in the crisis that spawned the need for it is the news that Tim Geithner's spine has stiffened on what exactly to do. Or at least that's how I read this Times article.

I'm talking about Geithner's position on the so-called bank tax. Several months ago, he threw cold water on the idea of a special levy on banks, despite pressure for such a tax from his European counterparts. Wed, 28 Apr 2010 23:00:00 +0100 Timothy Geithner Tax TARP Risk Regulation Obama Administration Goldman Sachs financial crisis Congress compliance Christopher Dodd Banks banking reform bank failures bailouts Why financial reform is likely to fail

With Congress expected to debate financial regulatory reform until the cows come home, lots of commentators are weighing in on what it must do to inhibit, if not prevent, an even worse financial meltdown. (And no, we aren't out of the woods, not by a long shot.)

Our own Marine Cole ventured into these waters last week with a piece on to what degree legislation as currently formulated would require bank regulators to toughen their capital reserve requirements. But there's a lot m [...] Mon, 05 Apr 2010 23:00:00 +0100 Volcker Rule Timothy Geithner Risk Regulation Paul Volcker Obama Administration Lehman Brothers financial crisis Congress compliance Banks banking reform Small businesses to banks: We don’t want your money

For months, we have been reminded over and over again that the economy would be in better shape if the tight-fisted banks would just lend more money to small businesses.

We have heard anecdotal examples of small business owners who would like $500,000 here and $2 million there to hire a few people and expand their product offerings.

Too bad this is all one big myth.

Turns out, most small businesses don't want the banks' money, thank you very much.

[...] Wed, 31 Mar 2010 23:00:00 +0100 small and medium-sized business Risk Obama Administration Banks Washington blasted for coddling banks

A conference on financial reform held today by the Roosevelt Institute really tells it like it is when it comes to what's going on in the nation's capital. And "it" isn't pretty. 

I just heard Congressional TARP cop Elizabeth Warren, for example, accuse banks of "bullying" Washington into doing its bidding over consumer protection.

In the report accompanying the proceedings, Warren insisted that the proposed financial consumer protection agenc [...] Tue, 02 Mar 2010 23:00:00 +0100 Obama Administration Federal Reserve credit-default swap Credit Ratings Consumer Financial Protection Agency Congressoinal Oversight Panel Congress compliance Chris Dodd Banks banking reform Banking bailouts The battle heats up over transfer pricing

The Obama administration’s 2011 budget includes many elements to disgruntle the average CFO or finance director, but few raise finance exec hackles at US multinationals as quickly as transfer pricing.

Budget proposals would require US corporations to pay tax immediately on returns of more than 30 percent traced to intangible assets owned by offshore subsidiaries in tax haven countries. The proposal sets an effective corporate tax rate threshol [...] Sun, 28 Feb 2010 23:00:00 +0100 transfer pricing offshore Obama Administration corporate tax rate budget