Random Thoughts on Other Notable Headlines of the Day — Issue XXIV

June 7, 2009  

• Mary Schapiro, chairman of the Securities and Exchange Commission, says the SEC has lost credibility and she wants to rebuild it and regain confidence. She points to two episodes as examples — the Bernie Madoff case and SEC employees being investigated for possible insider trading. I doubt anyone believes the SEC has done their job effectively over the past dozen years or so. But there’s only two ways to rebuild credibility; spend the next ten to twenty years of doing absolutely nothing but the right thing, or — immediately prosecute those who have broken the laws and punish them as if they were ordinary citizens who had broken the law. But of course, if the latter is the price to pay for immediate credibility, then ‘we’re just not interested’.
• ‘The economy and the nations health is starting to look up. Job losses were only 345,000 last month and Wall Street is once again making money. Unemployment is only 9.4 percent, with only 7 million people loosing their jobs since December. The downward “acceleration” of those job losses “is slowing“. Big money investors are buying. Oil has risen 116 percent from their lows just 5 months ago. Things are looking great! The folks at CNBC are all smiles‘ (video). Damn, I feel better, don’t you!? And I’ll bet every single one of those 7 million lucky people who have lost their job and have no prospect of finding one are just beside them selves with joy. Well, it’s like I said in November of last year — when Wall Street bounces back, the recession will be over.
• Our soldiers today are treated like royalty by the public compared to the way they were during the Vietnam War. However, we still do not give them their just due. And one guy points that out to us. Cynical Synapse has posted his comments on how Army Private William Long’s murder “deserved only a ‘page 5′ mention”, when he should have been on page 1 of every newspaper of America. Private Long, you will recall (hopefully), was murdered by a domestic born terrorist. CS compares the attention Private Long’s murder received to the attention that Dr. George Tiller’s murder received. Obviously, I completely agree with CS that both deserve front page coverage. Since they both deserve the respect of close attention and wide-spread coverage, one has to ask why we felt Private Long was worthy of only page 5. If you don’t think he deserved better than that, maybe you should watch the video on another one of CS’s post.
• An article by The Washington Post has been setting on my desktop for a couple of weeks now without notice. It’s about the Financial Accounting Standards Board’s intent to remove an accounting practice that played a major role in the financial crisis. In effect, the rule, commonly known as “Q’s” is a “storage facility” where banks place large amounts of mortgage loans. As such, this did two things: it dramatically reduced the amount of capital reserve that banks were required to keep on hand and it was a place to hide potential losses, thus allowing them to report higher earnings. Investors paid the first price when things went south for a bank. We all know who paid the second price. Citigroup had $800 billion in their “storage facility” as of June of last year. When you take into consideration that banks can reduce their required capital reserves by $6 for every $100 in storage, this equates to a lot of money. In CitiGroup’s case, this lowered their reserve requirements by $80 billion. How much did we taxpayers hand over to them? $45 billion? So far?
• How does a politician flim-flam the public and help his corporate friends at the same time? Easy! In some cases, they can “delete a single word and insert two others in a bill”. That’s what Democrat Representative Gene Green of Texas did. With this little slight of hand, he will be helping his oil friends save millions of dollars when the new “Cap and Trade” bill passes. The referenced Post article says with this unnoticed change in the bill “[oil] refiners could get (the) extra allowances in return for cutting carbon emissions by 50 percent at a single point of a vast refinery complex instead of slashing emissions by 50 percent for the entire facility”. Cute! Real cute! Is there any question in your mind now who our politicians really work for?