And seeing nothing. Barely changed the language from the last time around and certainly had nothing good or encouraging to say about the economy. So now it's ECB and Minister watching as the Euroboys have their get together tomorrow. The silence out of Euroland today was deafening and I'm not even going to speculate as to what mighr occur. Que sera, sera...that's Spanish. Very appropriate.
Oh, should mention one thing. The government lost a big one yesterday. Brian Stoker, a Citigroup executive, had a civil jury rule in his favor in a case brought by the SEC relating to the creation and sale of a large CDO back in 2007. Imentioned two years ago how difficult it was going to be to bring civil if not criminal actions against individuals in regard to these transactions but in another face-saving exercise the SEC moved against Mr. Stoker nonetheless.
I don't know Mr. Stoker nor do I know anything about this case but why I call it important is that I hope it spells the end to this money-wasting, face saving meaningless exercises which simply steals time from the real task of figuring out out to keep this stuff from happening again. Memo to the SEC and all concerned: Dodd/Frank aint the solution. Try again.
Yesterday was also the 10th anniversary of SOX, the first in a long line of stupidities which has accomplished little more than the reduction of the new issue business here in the United States by approximately 70%, not to mention the vastly increased costs that it has brought to small and medium size businesses across the country.
Tune in tomorrow to see if we still have Euroland.
Showing posts with label Sox. Show all posts
Showing posts with label Sox. Show all posts
Wednesday, August 1, 2012
Tuesday, March 1, 2011
NOW, NOW...
Carter, that is simply unkind. To suggest that all Mr. Bernanke has done is with his QE II is to create a stock market bubble...really! Why, no greater mind than the senior economist at Moody's (and we know how clever they have been) is convinced that this is the greatest idea since the stimulus which everybody knows created 2,000,000 jobs and has been stress tested in Japan 20 years ago (and counting). But thanks again for the comment and for pointing out the downgrade on the German banking sub-debt. While not to dismiss it, I think the reality is that it's still covered unless, and I don't think this is the case, that the sub-debt is outside of German or at least Euro hands. If I'm wrong let me know but crony capitalism in Euroland is going to be alive and well for quite a while.
Anyway, while I was away sunning, there was an interesting development regulatory-wise. Barclays PLC decided that their Deleware based U.S. bank holding company, Barclays Group US Inc. had become a tad expensive and moved their credit card operation in the U.S. back under the U.K. parent company by way of a direct subsidiary. Why you ask? Well, up until Dodd/Frank, there was an exception for bank holding companies owned by foreign banks granted by the Federal Reserve in regard to the amount of capital required to be held within the holding company. Under the new regs, that amount is fixed at 4% of tier 1 capital for everbody. Sod that said Barclays and changed the game despite the fact that the new rules do not take effect until 2015. Whether other foreign institutions will do the same remains to be seen.
I don't really care a great deal about what Barclays does or other institutions do or may not do, but this action is illustrative of what are often the unintended consequences of regulation (and especially over-regulation). I have noted before in this space that in our global marketplace it makes increasingly little difference if a particular business line is conducted in New York or Tinbuktu. The first movement away from Dodd/Frank happens to be on the part of a non-American institution solely because of cost of the regulation itself. As SOX has made clear, cost is not the only factor to seek regulatory safe havens; sheer complexity is also a strong motivator. In another industry, off-shore drilling, Transocean, a quintessently American company is now registered in Switzerland. How does The Leader's EPA (have you noticed the now-almost total us of the possessive?) regulate a Swiss company. By not allowing them to work offshore of our coast line? In the end who is hurt by that?
This is serious stuff and at some point we and our legislators have to realize that the United States is locked in combat with jurisdictions around the world for business which is increasingly global in nature. We can write the finest, toughest and most needed regulations in the world covering various business lines or entire industries but if we cannot enfource them, what is the point or the good. There's more of this to come I fear. Stay alert.
Anyway, while I was away sunning, there was an interesting development regulatory-wise. Barclays PLC decided that their Deleware based U.S. bank holding company, Barclays Group US Inc. had become a tad expensive and moved their credit card operation in the U.S. back under the U.K. parent company by way of a direct subsidiary. Why you ask? Well, up until Dodd/Frank, there was an exception for bank holding companies owned by foreign banks granted by the Federal Reserve in regard to the amount of capital required to be held within the holding company. Under the new regs, that amount is fixed at 4% of tier 1 capital for everbody. Sod that said Barclays and changed the game despite the fact that the new rules do not take effect until 2015. Whether other foreign institutions will do the same remains to be seen.
I don't really care a great deal about what Barclays does or other institutions do or may not do, but this action is illustrative of what are often the unintended consequences of regulation (and especially over-regulation). I have noted before in this space that in our global marketplace it makes increasingly little difference if a particular business line is conducted in New York or Tinbuktu. The first movement away from Dodd/Frank happens to be on the part of a non-American institution solely because of cost of the regulation itself. As SOX has made clear, cost is not the only factor to seek regulatory safe havens; sheer complexity is also a strong motivator. In another industry, off-shore drilling, Transocean, a quintessently American company is now registered in Switzerland. How does The Leader's EPA (have you noticed the now-almost total us of the possessive?) regulate a Swiss company. By not allowing them to work offshore of our coast line? In the end who is hurt by that?
This is serious stuff and at some point we and our legislators have to realize that the United States is locked in combat with jurisdictions around the world for business which is increasingly global in nature. We can write the finest, toughest and most needed regulations in the world covering various business lines or entire industries but if we cannot enfource them, what is the point or the good. There's more of this to come I fear. Stay alert.
Monday, February 28, 2011
OFF AND RUNNING
Whew, where to begin? I can't belive so much has happened since we left town. Florida was beautiful by the way, as it always is between Oct 15 and April 15. The other six months it's uninhabitable. Watching the grandkids at Disney World is worth the $11,000,000 it takes to get into the damn place. What a concept.
Anyway, The Leader and his party have the knickers in a twist at the goings-on in the various states and the heat their boys in the union movement are taking. Funny, I don't hear any of that, "I won, deal with it" or "elections have consequences" talk coming out of his mouth lately. In fact not much is coming out that makes any sense at all, especially in the matter of the budget or the nation's finances as we careen towards a shut down of the government. It's not going to happen but in a rather perverse way I sort of wish I could witness a missed payment on the national debt. What a kick; it would make Ali Baba square--or whatever its name is--in Cairo look like a gathering of grandma's knitting circle. One can dream, can't one?
One thing that is important that did occur was the "merger" of the New York Stock Exchange with the Deutsche Bourse. Important in the sense of what this tells us rather than the actually effect it will have in the real world of stock trading. There's very little doubt in my mind that the loss of a substantial amount of the new capital raising business that made New York the center of the financial universe to places like Frankfurt, London and Hong Kong was the result not only of the vast world-wide creation of wealth around the globe in the past 20 years but also as a result of the overregulation--IMHO--of the U.S. markets. With laws such as SOX we are simply a pain in the butt to the rest of the world--and we live in a HIGHLY competitive world. The same thing is going to happen to our hold over the capital markets as a result of the moronic Dodd/Frank debacle (more on that tomorrow). But instead of seeing the light, the only thing that wizz-bang of finance, Chuckie Schumer can respond when asked if the deal will be approved is,"New York had better come first in the new name." Last time I heard that was when Morgan Guaranty bought Chase Manhattan (J.P. MorganChase) and the chairman of Chase said, "Well, at least we saved the name." Tom was a hell of a nice guy; too bad he was an idiot. We lost, guys...WE LOST! And we're about to lose again.
This weekend there was another momentous event: Ireland's ruling party of 70 years got murdered at the polls. Oh, everyone knew they were going to lose but they were slaughtered. Why momentous, you say? Well, for those who were paying attention one of the campaign promises made by the in- coming Fine Gael was to lay on a little "burden sharing" in regard to the treatment of the Irish banking system. Regular readers will know that the previous government was extremely generous towards creditors, basically guaranteeing all of the banks' obligations; not this new bunch. They are looking for bondholders and other creditors to take a haircut and whooo-eee, The French and the Germans don't like that one bit because it's their banking systems we're talking about as well as the good burgers of Kensell Rise and High Street Ken. Needless to say, watching all of this unfolding will be the Greeks and the Spanish and the...well, you get the idea. The thought of this playing out over the next few months is simply delicious. I'll be watching along with my fellow dead-beats. Good to be back.
Anyway, The Leader and his party have the knickers in a twist at the goings-on in the various states and the heat their boys in the union movement are taking. Funny, I don't hear any of that, "I won, deal with it" or "elections have consequences" talk coming out of his mouth lately. In fact not much is coming out that makes any sense at all, especially in the matter of the budget or the nation's finances as we careen towards a shut down of the government. It's not going to happen but in a rather perverse way I sort of wish I could witness a missed payment on the national debt. What a kick; it would make Ali Baba square--or whatever its name is--in Cairo look like a gathering of grandma's knitting circle. One can dream, can't one?
One thing that is important that did occur was the "merger" of the New York Stock Exchange with the Deutsche Bourse. Important in the sense of what this tells us rather than the actually effect it will have in the real world of stock trading. There's very little doubt in my mind that the loss of a substantial amount of the new capital raising business that made New York the center of the financial universe to places like Frankfurt, London and Hong Kong was the result not only of the vast world-wide creation of wealth around the globe in the past 20 years but also as a result of the overregulation--IMHO--of the U.S. markets. With laws such as SOX we are simply a pain in the butt to the rest of the world--and we live in a HIGHLY competitive world. The same thing is going to happen to our hold over the capital markets as a result of the moronic Dodd/Frank debacle (more on that tomorrow). But instead of seeing the light, the only thing that wizz-bang of finance, Chuckie Schumer can respond when asked if the deal will be approved is,"New York had better come first in the new name." Last time I heard that was when Morgan Guaranty bought Chase Manhattan (J.P. MorganChase) and the chairman of Chase said, "Well, at least we saved the name." Tom was a hell of a nice guy; too bad he was an idiot. We lost, guys...WE LOST! And we're about to lose again.
This weekend there was another momentous event: Ireland's ruling party of 70 years got murdered at the polls. Oh, everyone knew they were going to lose but they were slaughtered. Why momentous, you say? Well, for those who were paying attention one of the campaign promises made by the in- coming Fine Gael was to lay on a little "burden sharing" in regard to the treatment of the Irish banking system. Regular readers will know that the previous government was extremely generous towards creditors, basically guaranteeing all of the banks' obligations; not this new bunch. They are looking for bondholders and other creditors to take a haircut and whooo-eee, The French and the Germans don't like that one bit because it's their banking systems we're talking about as well as the good burgers of Kensell Rise and High Street Ken. Needless to say, watching all of this unfolding will be the Greeks and the Spanish and the...well, you get the idea. The thought of this playing out over the next few months is simply delicious. I'll be watching along with my fellow dead-beats. Good to be back.
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