Any idea how much PROFIT was made by Barclays over the last 7 years by the manipulation of the LIBOR rate?
Wednesday, June 27, 2012
Useful definitions for liberals
Failed Policies of the Past
Definition: Limited government, free markets,
personal responsibility, liberty.
We Are All In This Together
Definition: For the love of God who do we tax back
to the stone-age to get out of this!?
Social Darwinism
Definition: Essentially a darling concept of the
progressive left of the first half of the 20th century (along with eugenics its
even more vile cousin). It now is defined as "any attempt by conservatives and
libertarians to rein in the unsustainable spending of out of control
government."
Fairness
Definition: A word used to motivate making sure
outcomes do not match abilities or effort. Note, pre-1970 it meant roughly the
opposite.
Social Justice
Definition: Redistribution based on group
affiliation, regardless of anything the actual individuals in question did, or
even their specific ancestors did, but instead based on the actions of other
individuals in the past who just kind of looked vaguely like those in the
relevant groups being discussed now, both victim and oppressor. Also applies to
redistribution of any kind, whether based on actual unfairness, or on simply
outcomes liberals do not like.
Alternative definition: Unspecific. Just a
meaningless phrase that screams “I am liberal and this phrase sounds liberal and
nice with just a hint of revolutionary sexiness.”
Antonym: Justice (which, even if it must be
applied broadly to address real group-wide wrongs, is always and everywhere an
individual notion)
The Phrase “Deny Access to…”
Used in a sentence: “It is unfair to deny access
to healthcare to 26 year olds living off their parents.”
Definition: When a person isn’t given something
they want for free, and they have not found a way to steal it yet, they have
been “denied access” to it. In general it is the “1%” that “denies access.” See
“1%” below.
Entitlement
Definition: Something provided by other men and
women’s labor that some claim as their right, sometimes claiming to have paid
for it during their lifetime, when all forms of modern mathematics and
accounting reject that notion.
Rights
Used in a sentence: “I have a right to
healthcare.”
Definition: A more extreme form of “entitlement”
defined above. Note that modern usage throws out the long tradition of natural
rights only of a negative nature, that is, the right not to have something done
to you, for rights of a positive nature, that is, the right to certain goods and
services, like health care, Apple products, and soy milk. Since, no matter how
important these items are, these modern positive rights must still be produced
and taken from others, essentially the word “rights” now often stands for a
system of slavery and theft.
Main Street
Definition: A place liberals used to ridicule as
Mayberry but now pretend to love.
Regular Americans
Definition: People who support me.
Special Interests
Definition: People who support you.
Fat Cat
Definition: Something a politicians calls someone
with 3x more money than the median voter who supported the politician in
question.
Alternative Definition: Someone the same exact
politician hits up for cash.
The 1%
Definition: Those who pay more than 1/3 the total
federal income tax and are never thanked for it. More generally, they are
responsible for all evil in the world today (unless they work in Hollywood or
hi-tech in which case they are “honorary 99%-ers” regardless of income, tax
rate, and lifestyle).
Middle-Class
Definition: A focus-group tested better word than
“the poor” for progressives to use to advance their statist schemes. Some
speeches by progressives now consist of just saying it over and over again in
different hypnotic musical tones.
Income Inequality
Definition: What occurs when a free and productive
economy includes people with different abilities, work habits, and, of course,
luck. Also, one of the main reasons anyone actually works at anything.
A Fair Tax System
Definition: One in which the “rich” (i.e., those
making more than the speaker of these words, or those voting for the speaker)
pay 50% more than they currently pay, and the speaker and his constituents get
to pay 50% less than they currently pay. These figures remain unchanged despite
any starting tax rates. If this change pushes the “rich” to over 100% or the
non-rich to below 0% more the fairer.
Julia
Definition: The person living the ideal
progressive life where no responsibility is taken, no risk is taken, the
government perks are endless, you never see who pays for it, and the tyrannical
hand of big-brother never makes it into the cartoon narrative.
Synonym: Sheep Antonym: Men
Citizens United
Definition: The ultimate evil Supreme Court
decision (narrowly defeating Dred Scott) which expanded free speech, thus
allowing those with money to, uh, speak freely.
SCOTUS
Definition: A delicious breakfast treat that goes
well with English Breakfast tea and clotted crème. Conservatives prefer theirs
in the traditional 9 pack, liberals enjoy up to 15.
Elizabeth Warren
Definition: An “Elizabeth Warren” is any brilliant
scholar who both thinks we can fix the U.S. financial system simply by adding
another giant bureaucracy with near unlimited power, and who can, by dancing
vigorously in a circle, make it rain. Both equally as likely.
The IMF and/or the World Bank
Definition: Nobody knows. See SMERSH and CHAOS for
similar definitions.
The European Financial Crisis
Definition: A complex multi-year dance whose sole
purpose is to see how much money can be shaken out of the German
middle-class.
Universal Health Care
Definition: The system formerly known as single
payer.
Single payer Health Care
Definition: The system formerly known as
socialized medicine.
Socialized Medicine
Definition: Something Democrats claim they don’t
want, as they simply want Universal Health Care.
Nobel Peace Prize
Definition: A prize awarded to the left’s favorite
person that year.
Antonym: Any prize having anything to do with
actual Peace, or frankly accomplishment of any kind.
Stimulus
Definition: Taking money from current and future
Americans to undertake projects that didn’t make sense before, don’t make sense
now, will net cost jobs as the stimulus must be paid for privately, but since
the job losses will be hidden, and the direct hires put on the evening news,
might let those in charge keep their cushy jobs a bit longer.
World War II
Definition: Mainly important as proof that
Keynesian stimulus works (side note: also led to defeat of Nazis and Imperial
Japan). Since it is the only such “proof” ever, and we all have nuclear weapons
now, different options are being considered for future stimuli. Actually, since
World War II ending did not crash the economy as Keynesians predicted at the
time, frankly we’re rethinking the whole thing.
Cash for Clunkers
Definition: What we came up to replace World War
II as stimulus. Many perfectly good cars destroyed, no Nazis defeated.
Quantitative Easing
Definition: The act of printing pieces of paper to
purchase other pieces of paper and thinking it matters at all for anything. See
“dogs chasing cars” for related examples.
Austerity
Definition: Spending much more than ever before
but slightly less than you had once thought you might spend which itself was a
completely insane amount to spend.
Synonym: Profligacy
Paul Ryan
Definition: A “Paul Ryan” is a Hollywood monster
which kills and devours old people simply by showing them a preliminary
reasonable plan to grow spending slower than we currently are, while keeping any
obligations already made to the elderly.
Grand Bargain
Definition: An agreement to raise taxes now while tacitly agreeing to waive the corresponding spending cuts later. Usually done in at least a 10:1 ratio as waiving 10x the future cuts is a particularly effective amount of waiving.
Reform
Definition: To make something (e.g., government)
bigger, more intrusive, less efficient, and more dictatorial.
Bipartisan
Definition: We found one old sap from the other
party dying for one last shot at relevance who will add his name to our highly
partisan effort.
Dodd-Frank
Definition: A verb, to “Dodd-Frank” something is
to use the perpetrators of a major crime to fix things for next time. Like
taking ex-computer hackers and putting them in charge of your security (this
example is not perfect as this might actually work). Used in a sentence: “We
really Dodd-Franked that financial reform.”
See also “Searching for the real killers.”
Right Wing Extremist
Definition: Someone objecting in any way to left
wing extremism.
Conservative
Definition: Moron
Liberal
Definition: A word that when applied to yourself
conveys an instant halo of goodness that does not have to be justified with
actions, logic, or even the slightest examination of what the policies you
support have wrought. Works particularly well for rich hypocrites (Wall Street)
and rich morons (Hollywood).
Progressive
Definition: A rebranding of “liberal”
post-Dukakis, going back to an older word, that means essentially the same
thing, but contains the very positive word “progress” within it, and the always
welcome “ive” ending.
Libertarian
Definition: A philosophy held by annoying bastards
who happen to be right about nearly everything. Fortunately, due to the
frustration that comes with being right about nearly everything, in a world
wrong about those same things, there are only 19 of them, and we’re going to
find the bastards soon.
The Party of No
Definition: Legislators who are rightly demonized
by the press and progressives for being elected to bring down the size of
government and then actually trying to do so. Sons of bitches.
Synonyms: Obstructionists, Do-nothing Congress
The Buck Stops There
Definition: Something Barack Obama says about
George W. Bush.
Foreign Policy
Definition: A process where the USA makes amends
to the rest of the world for being more successful than them, footing many of
their bills, and shedding our blood to keep them safer and freer.
Due Process
Definition: Something progressives get misty over
when Henry Fonda is being denied it on the silver screen and when in power they
deliver at the end of an explosive drone after Judge David Axelrod pronounces
the target guilty.
Climate
Definition: A non-linear chaotic system that is a
near-perfect example of something that is very very difficult, even using modern
methods, to explain or forecast. This in no way takes away from the possible
reasonableness of man-made climate change described below. Though, one might
note, we get frustrated by weathermen as they can’t forecast the climate
today.
Global Warming
Definition: What we now call “climate change”.
Global warming was phased out as it also leads to things being too cold, and
sometimes being just right. Mama Bear has been replaced with a highly volatile
mix of all three bears.
Climate Change
Definition: The fact that over time the climate,
uh, changes.
Man-Made Climate Change
Definition: The entirely reasonable idea that
seven billion industrialized humans may be affecting the climate.
Krypton Seven Seconds Before Kal-El Was Launched Into Space
Definition: The stage liberals are certain the
Earth is at.
Jor-El
Definition: Both a character once played by Marlon
Brando and coincidentally the fictional character Al Gore pictures himself as.
Nobody listened to Jor-El and look what happened! A fascinating additional
coincidence is that when Brando was alive, Marlon and Al alone actually omitted
¼ of the USA’s greenhouse gases.
Infinity
Definition: The amount progressives will spend to
combat man-made climate change without any assessment of the costs and benefits
of these actions.
The Green Agenda
Definition: The additional use of man-made climate
change, even if it’s fully true and it makes economic sense to sacrifice to
fight it, to have government and its anointed priests take over much more of our
lives. Any questioning of it is absolute proof of evil. Children must be
indoctrinated in it in grade school before reading or writing or arithmetic.
They must then be sent to spy on and lecture their parents.
Resistance is futile.
Ronald Reagan Definition: Right wing extremist
President who kicked people off welfare which progressives said would be a
holocaust, radically broadened free trade which progressives say has since
killed American manufacturing, and whose administration perpetuated the horrible
banking deregulation progressives say brought on the financial crisis.
Bill Clinton
Definition: The guy who actually did those things
right above (though Reagan did some other cool
things). Oddly today’s Democrats insist that it’s Republicans who’ve changed and gotten “way more extreme” since the 1990s.
things). Oddly today’s Democrats insist that it’s Republicans who’ve changed and gotten “way more extreme” since the 1990s.
Trickle Down Economics
Definition: A brilliant marketing phrase for
denigrating the truth: that a freer economy helps everyone. Not to be confused
with “trickle up poverty” a perfect definition of socialism.
Democracy
Definition: An excellent form of government where
if you can cobble together 51% of the people, by promising them other people’s
stuff, or scaring them that you’ll take away their stuff, you can rule as a
dictator. It is decidedly not the form of government originally chosen by the
United States of America, which is a constitutional republic with limited
government. Thankfully we’ve mostly done away with that nonsense.
Socialism
Definition: A word that is a hate crime if used
about an American politician who wants us to be more like Europe. Or,
alternatively, a word used by many European politicians to define
themselves.
Monday, June 25, 2012
No drug testing, no accountability, $80 Billion
Americans spend $80 billion each year financing food stamps for the poor, but
the country has no idea where or how the money is spent.
Food stamps can be spent on goods ranging from candy to steak and are accepted at retailers from gas stations that primarily sell potato chips to fried-chicken restaurants. And as the amount spent on food stamps has more than doubled in recent years, the amount of food stamps laundered into cash has increased dramatically, government statistics show.
But the government won’t say which stores are doing the most business in food stamps, and even it doesn’t know what kinds of food those taxpayer dollars buy.
Coinciding with lobbying by convenience stores, the U.S. Department of Agriculture, which administers the program in conjunction with states, contends that disclosing how much each store authorized to accept benefits, known as the Supplemental Nutritional Assistance Program (SNAP), receives in taxpayer funds would amount to revealing trade secrets.
As a result, fraud is hard to track and the efficacy of the massive program is impossible to evaluate.
As the House debates the once-every-five-years farm bill, the majority of which goes to food stamps, there is a renewed and fervent call from a broad spectrum of camps that the information - some of the most high-dollar, frequently requested and closely held secrets of the government - be set free.
“We can’t release it based on federal rules. If it were up to us, I wouldn’t have a problem releasing the information. It’s taxpayer money,” said Tom Steinhauser with the division of benefit programs for the Virginia Department of Social Services.
The District said it would be illegal to tell the newspaper how many food stamp dollars were flowing to each local vendor, but first offered to sell The Washington Times the information for $125,000.
“Why don’t you just pay the charges? Your paper has a lot of money,” said David Umansky, spokesman for the District’s chief financial officer.
Told that the newspaper would not pay, the CFO’s office then said that only JP Morgan, to which it contracted out operations, had access to the store totals and that the office had never looked at them. After six months of the local government attempting to extract the information from JP Morgan, the District finally said that releasing the information would be illegal.
States instructed not to tell
Maryland denied The Times’ request for data under the Freedom of Information Act, saying the information belonged to the federal government, which instructed states not to release it.
Legislation seemingly designed to protect the industry goes so far as to say that anyone who releases the amount of food stamp dollars paid to a store can be jailed.
Profiting from the poor’s taxpayer-funded purchases has become big business for a mix of major companies and corner bodegas, which have spent millions of dollars lobbying Congress and the USDA to keep the money flowing freely.
The National Association of Convenience Store Operators alone spends millions of dollars on lobbying yearly, including $1 million in the first quarter of this year.
In February, 7-Eleven hired a former aide to House Speaker John A. Boehner, Ohio Republican, to lobby on “issues related to the general application and approval process for qualified establishments serving SNAP-eligible recipients.”
The USDA is notoriously secretive about who receives its money, relying on weak legal reasoning, said Steve Ellis of the watchdog group Taxpayers for Common Sense.
“USDA hides behind a specious proprietary data argument: The public doesn’t want to know internal business decisions or information about specific individuals’ finances,” he said. “The USDA sees retailers, junk food manufacturers and the big ag lobby as their customers, rather than the taxpayer.”
The agency also has no idea what type of food the benefits are buying, even though the combination of universal bar codes and benefit cards makes that entirely feasible.
“It’s one of those questions that frankly those of us who have been working on this issue have been struggling with a long time because we need to see the data. The industry looks at it as proprietary. The USDA doesn’t track where that money goes,” said Beth Johnson, a former Senate Agriculture Committee and USDA staffer who now consults for the Snack Food Association.
She noted that stores have breakdowns of products bought with food stamps but declined to share them with the USDA.
The junk food lobby appreciates the informational void.
‘Anecdotal info’
Susan Smith of the National Confectioners Association, a candy trade group, dismissed assertions that food stamp recipients commonly buy candy and soda as “anecdotal info,” while declining to call for the collection of statistics.
The government is “keenly interested” in what types of food the $80 billion purchases, but has not made an effort to track it.
“USDA is preparing to update a study of the feasibility of capturing detailed purchase data from over 200,000 retailers that redeem SNAP benefits, and continue to explore other options to gather information on SNAP participants’ diet quality,” Jimmie Turner, a spokesman for the USDA, said by email.
The demand for the information has been festering for years.
Last year, the Argus Leader, a South Dakota newspaper, sued the USDA for the information, and the USDA has fought fiercely in court filings that have stretched through this month to prevent disclosure.
This month, the public-interest group Eat Drink Politics called on the USDA to release the totals by retailer and for Congress to require the USDA to determine what types of food are purchased.
In a few cases, states have released subsets of the information, triggering the anger of the USDA.
In two years, Wal-Mart received about half of the $1 billion in SNAP expenditures in Oklahoma, the state revealed to the Tulsa World, as Eat Drink Politics noted.
In the District and other urban areas, much more is likely spent at corner stores where junk food is more abundant and fraud is more common. If a small corner store reported high levels of food stamp sales, that could be an obvious indicator that it was accepting customers’ food stamps and giving back cash, a common scheme.
Eat Drink Politics called on the House to mandate that the USDA begin tracking food types and release store totals, calling them “critical to effective evaluation.”
The Senate passed a version of the farm bill Thursday that lowers food stamp spending by $4.5 billion. But no one in either chamber has proposed an amendment to require the USDA to reveal where the remaining money is going.
Food stamps can be spent on goods ranging from candy to steak and are accepted at retailers from gas stations that primarily sell potato chips to fried-chicken restaurants. And as the amount spent on food stamps has more than doubled in recent years, the amount of food stamps laundered into cash has increased dramatically, government statistics show.
But the government won’t say which stores are doing the most business in food stamps, and even it doesn’t know what kinds of food those taxpayer dollars buy.
Coinciding with lobbying by convenience stores, the U.S. Department of Agriculture, which administers the program in conjunction with states, contends that disclosing how much each store authorized to accept benefits, known as the Supplemental Nutritional Assistance Program (SNAP), receives in taxpayer funds would amount to revealing trade secrets.
As a result, fraud is hard to track and the efficacy of the massive program is impossible to evaluate.
As the House debates the once-every-five-years farm bill, the majority of which goes to food stamps, there is a renewed and fervent call from a broad spectrum of camps that the information - some of the most high-dollar, frequently requested and closely held secrets of the government - be set free.
“We can’t release it based on federal rules. If it were up to us, I wouldn’t have a problem releasing the information. It’s taxpayer money,” said Tom Steinhauser with the division of benefit programs for the Virginia Department of Social Services.
The District said it would be illegal to tell the newspaper how many food stamp dollars were flowing to each local vendor, but first offered to sell The Washington Times the information for $125,000.
“Why don’t you just pay the charges? Your paper has a lot of money,” said David Umansky, spokesman for the District’s chief financial officer.
Told that the newspaper would not pay, the CFO’s office then said that only JP Morgan, to which it contracted out operations, had access to the store totals and that the office had never looked at them. After six months of the local government attempting to extract the information from JP Morgan, the District finally said that releasing the information would be illegal.
States instructed not to tell
Maryland denied The Times’ request for data under the Freedom of Information Act, saying the information belonged to the federal government, which instructed states not to release it.
Legislation seemingly designed to protect the industry goes so far as to say that anyone who releases the amount of food stamp dollars paid to a store can be jailed.
Profiting from the poor’s taxpayer-funded purchases has become big business for a mix of major companies and corner bodegas, which have spent millions of dollars lobbying Congress and the USDA to keep the money flowing freely.
The National Association of Convenience Store Operators alone spends millions of dollars on lobbying yearly, including $1 million in the first quarter of this year.
In February, 7-Eleven hired a former aide to House Speaker John A. Boehner, Ohio Republican, to lobby on “issues related to the general application and approval process for qualified establishments serving SNAP-eligible recipients.”
The USDA is notoriously secretive about who receives its money, relying on weak legal reasoning, said Steve Ellis of the watchdog group Taxpayers for Common Sense.
“USDA hides behind a specious proprietary data argument: The public doesn’t want to know internal business decisions or information about specific individuals’ finances,” he said. “The USDA sees retailers, junk food manufacturers and the big ag lobby as their customers, rather than the taxpayer.”
The agency also has no idea what type of food the benefits are buying, even though the combination of universal bar codes and benefit cards makes that entirely feasible.
“It’s one of those questions that frankly those of us who have been working on this issue have been struggling with a long time because we need to see the data. The industry looks at it as proprietary. The USDA doesn’t track where that money goes,” said Beth Johnson, a former Senate Agriculture Committee and USDA staffer who now consults for the Snack Food Association.
She noted that stores have breakdowns of products bought with food stamps but declined to share them with the USDA.
The junk food lobby appreciates the informational void.
‘Anecdotal info’
Susan Smith of the National Confectioners Association, a candy trade group, dismissed assertions that food stamp recipients commonly buy candy and soda as “anecdotal info,” while declining to call for the collection of statistics.
The government is “keenly interested” in what types of food the $80 billion purchases, but has not made an effort to track it.
“USDA is preparing to update a study of the feasibility of capturing detailed purchase data from over 200,000 retailers that redeem SNAP benefits, and continue to explore other options to gather information on SNAP participants’ diet quality,” Jimmie Turner, a spokesman for the USDA, said by email.
The demand for the information has been festering for years.
Last year, the Argus Leader, a South Dakota newspaper, sued the USDA for the information, and the USDA has fought fiercely in court filings that have stretched through this month to prevent disclosure.
This month, the public-interest group Eat Drink Politics called on the USDA to release the totals by retailer and for Congress to require the USDA to determine what types of food are purchased.
In a few cases, states have released subsets of the information, triggering the anger of the USDA.
In two years, Wal-Mart received about half of the $1 billion in SNAP expenditures in Oklahoma, the state revealed to the Tulsa World, as Eat Drink Politics noted.
In the District and other urban areas, much more is likely spent at corner stores where junk food is more abundant and fraud is more common. If a small corner store reported high levels of food stamp sales, that could be an obvious indicator that it was accepting customers’ food stamps and giving back cash, a common scheme.
Eat Drink Politics called on the House to mandate that the USDA begin tracking food types and release store totals, calling them “critical to effective evaluation.”
The Senate passed a version of the farm bill Thursday that lowers food stamp spending by $4.5 billion. But no one in either chamber has proposed an amendment to require the USDA to reveal where the remaining money is going.
Headlines says one thing, the chart another!
This morning new home sales came in
at 369K, a "big beat" to expectations of a 347K print and up from the 343K
previously. But what does this really mean?
The chart above sums it up. The lowest of the lows for the past 50 years is the highest of the highs for the
past 2 years. The chart goes back 50 years and we're at lowest in all that time and of course the population has
more than doubled in that time.
Friday, June 22, 2012
Just plain ol' common sense.........
Every single time that Obama promises something for America in his second term I wish the main stream media puppets would ask him point blank why he didn't do that specific thing during his first term.
The silence is deafening.
The silence is deafening.
Wednesday, June 20, 2012
Lead or get the hell out of the way...
I don't know this man. Wish I did. I would hire him in a New York second. This is what America needs. No politics, no bullshit. America enjoys leadership today that rewards so many dipsticks who are looking for the perfectly legitimate excuse as to why they can't be successful.
I wish the thousands of American lives sacrificed in the Middle East were Bush and Obama bedtime stories. Unfortunately we are in the grasp and claws of the military industrial complex and it's an election year. I hope you appreciate this guy as much as I do. Thank you to all who serve our great nation. Click this link:
Great Leadership!!!
Absolutely apalling CFTC
American investors. They thought their money was safe. There is over $1.2 BILLION of customers money missing from MF Global and these saps are worried about a lack of funding and technology. There is no shame with these clowns.
I suppose that doesn't come as a surprise to anyone in this room full of visionaries. Technology is a tremendous asset; it provides leverage and is a force multiplier. My two eldest daughters, Kelsey and Claire, both have quite an aptitude for math and science. Looking towards their future, I hope that they will hear me when I tell them in their own times of uncertainty, "Technology."
As a regulator, it is an honor to be invited to speak at an event like this since most folks don't think of the Commodity Futures Trading Commission ("CFTC") when it comes to technology. And frankly, that makes sense since we have largely remained in the world of "plastics" when it comes to deploying and utilizing technology to support our oversight responsibilities.
Today, in addition to addressing technology in the markets and in the hands of regulators, I would also like to discuss a few other topics including the Commission's rulemaking progress and budget issues as they relate to implementation of the Dodd-Frank Act and the choices we are making. I'm also happy to answer any questions you may have at the end.
I am grateful for the kind introduction by SIFMA President and CEO Tim Ryan. I would like to give you a few more details about my background and explain why I am so focused on technology.
Prior to my nomination to the Commission, I served as the Clerk of the Senate Committee on Appropriations, Subcommittee on Energy and Water where I had responsibility for funding the Department of Energy ("DoE"). That position's mission was focused on deploying improved energy technologies. But, what few people realize is that the DoE also funds research on everything from nuclear physics to the nuclear weapons program. Simulating, solving and understanding the most challenging physics questions require massive computer hardware and software operating at speeds that previously didn't exist. And it was my job to fund this cutting edge technology.
After the ban on underground nuclear testing, the weapons program relied heavily on computer simulation that required bigger and faster computers than what currently existed. So, we invested millions of research dollars into advanced computing and simulation. I am especially proud of the Roadrunner supercomputer, a joint effort with Los Alamos National Laboratory and IBM to create what was then the world's fastest computer. On May 25, 2008, Roadrunner became the first computer to break and sustain the petaFLOP barrier by processing more than 1.026 quadrillion calculations per second. As you all can imagine it is hard to just walk away from one million, billion calculations per second. And, so I didn't.
Technology Advisory Committee 2.0
I have continued to fly the technology flag, and I have focused a great deal of my term thus far on advancing the use of technology to more effectively meet the CFTC's surveillance, oversight and regulatory responsibilities largely through reestablishing and chairing the Technology Advisory Committee (TAC).
We are re-chartering for a second two-year term, and, like every technology upgrade, I have branded it TAC 2.0.
I have been fortunate enough to bring together a diverse membership with industry-wide expertise and shared goals of establishing technological "best practices" for oversight and surveillance while informing the Commission of the technological issues related to ongoing rulemakings under the Dodd-Frank Act. We have covered such issues as pre-trade functionality and pre-trade credit checks, data collection standards, technological surveillance and compliance, the deployment of technology solutions in the swaps market, and most recently, algorithmic and high frequency trading. To put a finer point on what we have accomplished since bringing back the TAC in June 2010 with its 24 charter members, we have:
CFTC is the LEI Leader
In reviewing today's agenda, I noticed that the Legal Entity Identifier ("LEI") is a panel topic. Let me take a moment to update you on where the Commission currently is in its LEI implementation strategy. There is good news and not so good news depending on your time horizon. In terms of progress at the CFTC, I've got some good news. As to the Global LEI, the news is not as good.
By way of brief background, the CFTC's swap reporting rules require that counterparties report their trades to a swap data repository (SDR) and be identified by a legal entity identifier. LEIs will be a crucial data aggregation tool that enables the CFTC to utilize the data in SDRs to perform the fundamental mission of monitoring both the swaps and futures markets. It will also give us insight into systemic risk exposure, one of the main goals of the Dodd-Frank Act.
CFTC Leads in Establishing the Legal Entity Identifiers
As was made abundantly clear by the TAC Subcommittee on Data Standards in its final recommendations at our March meeting, a LEI is feasible and the sooner we apply it, the better. As I noted, there is good news and not so good news. The good news is that the Commission is moving to bring LEI's online for U.S. firms (or anybody transacting in the U.S.) to have an LEI by the time mandatory reporting is required for credit swaps and interest rate swaps, which will be 60 calendar days after the publication in the Federal Register of the Commission's final rule providing further definition of "swap" (a/k/a "Compliance Date 1").[1]
As part of its cooperation with international process, and because the use of identifiers will begin in reporting under CFTC jurisdiction before the global system is established, CFTC is referring to the identifier to be used in reporting under its rules as the CFTC Interim Compliant Identifier or the "CICI". The Commission anticipates that when the global LEI system is established, the CICI will transition into the global system.
On March 9, 2012 the Commission requested submissions from industry participants wishing to be considered to provide the CICI. The Commission received submissions from several industry participants, and all candidates have provided written demonstrations and live, on-site demonstrations. As I mentioned earlier, the Commission anticipates determining whether a CICI meeting its requirements is available, and designating that provider as the source for CICIs to be used in swap data reporting under Commission jurisdiction, in the very near future.
Status of International LEI Process Coordinated by FSB
While, I was assured that the initial issuance of LEIs by an international body would occur by spring 2012, the international effort has been delayed until March of 2013. The delays are related to governance issues and the insistence upon greater public sector involvement, albeit they still require a private sector solution to implement the systems.
At its May 2012 meeting in Hong Kong, the Financial Standard Boards ("FSB") approved recommendations for a global LEI system to the G-20 Leaders for consideration (this week) at their summit in Los Cabos, Mexico.[2]
The recommendations set out a three-tiered governance framework that includes:
Let me remind you of the good news. In the meantime, the Commission will be adopting its interim LEI, and this should cover roughly half of the overall swaps market. I hope the timely application of an LEI by the Commission will reduce the costs of applying an LEI system retroactively.
HFT Technology in the Market
I would like to spend a few minutes to share with you my thinking on high frequency trading. This topic has generated passionate views, both pro and con, and spawned headlines, economic studies and even books on the subject.
HFT currently accounts for a majority (56% in 2011) of the U.S. equity volume[3] and is approaching 50% of our futures market transactions. The influx of high frequency traders are behind the massive trading volume increases. Supporters argue that HFTs are the modern pit trader market makers that narrow bids and provide essential liquidity. Detractors complain that HFT have changed the market dynamics by playing games with trade strategies that bait hedgers and have reduced trade size. The bottom line is there is no definition for, or, rather, there is a struggle to find an appropriate characterization of this practice in our markets.
In a forthcoming study to appear in The Journal of Portfolio Management, Easley, Lopez de Prado, & O'Hara[4] point out that automated trading systems have created two markets. One market populated by low frequency traders that focus on "macro factors" like available supply, monetary policy and financial statements, while the HFT market focuses "market microstructural factors such as "rigidities in price adjustments across markets" and "variations in matching engines." The authors accurately point out that the "the goal [of HFT] is to exploit inefficiencies derived for the markets microstructure, such as rigidities in price adjustment within and across markets [agents], idiosyncratic behavior and asymmetric information." What we have here is a tale of two markets operating in one venue.
This is a topic I am very interested in, especially in terms of its relative impact on the markets. What I find most intriguing about the debate itself is that it is not always clear that folks on the pro side and folks on the con side are even talking about the same thing. One person's HFT may not be another's. In an effort to take the first step and define the practice, last November, I sent a letter to the Technology Advisory Committee members asking them for their opinion on a definition of HFT. After hearing back from them, I took the next step and formed through a public nomination process the Subcommittee on Automated and High Frequency Trading to develop an appropriate definition of HFT within the universe of automated trading. My goal is to have a working description of the attributes of HFT activities in order to better understand the impact they have on our markets. Developing a nomenclature is important if only as a means to study this trading activity on a consistent basis. Before we implement a new regulatory regime on any continent or in cyberspace, I believe we need to agree on what and who comprises this growing segment of our markets.
Within the ATS/HFT Subcommittee, we have established four working groups, each tasked with identifying specific issues associated with automated trading. The first working group is tasked with defining high frequency trading within the context of automated trading systems. The second group is examining whether or not there should be multiple categories of HFT. Specifically, this working group is examining distinctions in trading activity and how such distinctions should be identified or tagged by the exchanges in which they operate. The third working group is focusing on oversight, surveillance and economic analysis, to understand how HFTs behave as compared to other automated systems. The fourth working group is addressing market micro structure issues to identify possible disruptions that might be provoked by automated trading systems and potential solutions to mitigate such events. Under the leadership of CFTC Chief Economist Andrei Kirilenko and fellow CFTC staff these working groups have been conducting weekly conference calls and will be presenting their preliminary views at the public meeting of the TAC I am holding tomorrow at our CFTC headquarters in Washington.
My goal is to collect the facts, develop the data about the impact of HFT (and all automated trading for that matter) and establish a consistent, universally acceptable view on our new market participants. I never intended to assemble this group to develop rulemakings. This expert group was organized to define and discuss the current and potential impacts of HFT in the futures and swaps markets. It is up to the Commission to develop the policy solutions, and I hope that the Commission will benefit from the extensive debate and hard work of the Subcommittee as well as empirical market data before it considers taking action.
Technology in the Hands of Regulators
Technology in the hands of regulators is a good thing, and I will always support it in any role I have. We are now at the CFTC only beginning to leave "plastics," but our new Office of Data and Technology headed by Chief Information Officer John Rogers is making progress. Trust me, it is all relative. What my colleagues are seeing now is that technology offers us the opportunity to see across our jurisdictional markets (futures and swaps) and the only way we can develop the appropriate level of surveillance is through the deployment of algorithms and automation. Expanding our surveillance to include order data will require additional hardware to store and sort a massive amount of data. The CFTC has a long way to go, especially when it comes to automating some of our more mission-critical goals such as monitoring systemic risk, but we have learned a thing or two during our first attempts to automate large trader reporting for swaps and I have some ideas as to how we can leverage our expertise.
High-Frequency Regulation
One thing I have been critical of is our speed of regulation—which has nothing to do with technology. In fact, it is speed that I think has caused us to err in some of our rules such as the large trader swaps reporting rules and in our cost-benefit analyses. I do have good news on both fronts though, and things are looking bright and shiny, but not like plastic.
For those of you who are unfamiliar with the typical Washington rulemaking process, it is generally long and all-consuming. Before the Dodd-Frank Act, the Commission issued three or four rules a year at best. My friend and former Commissioner Mike Dunn would always say that most of the Commission's rules normally take anywhere from 15 to 18 months to finalize. So, trying to complete more than 50 rules in that amount of time guarantees mistakes and errors.
Remember the bumper sticker during Bill Clinton's 1992 campaign, "It's the economy, Stupid". Well, that is still true today. However, in the Dodd-Frank microcosm "It's the implementation, Stupid." Let me give you an example of how important it is for the Commission to develop well thought out rules, informed by actual and realistic cost benefit analysis. We can't guess or make assumptions about the swaps market and hope or expect market participants will be able to comply.
The Commission passed its final large trader reporting rule for physical commodity swaps under Part 20 in July 2011.[5] There were a number of problems including:
On November 20, 2011, the Commission started to receive records on a limited basis. Today, our CIO informs me that we are now receiving approximately 500,000 records per day from clearing members and an additional 200,000 records from clearing organizations. The no-action relief issued to reporting industry participants by the Division of Market Oversight[9] will end in less than two weeks on July 2nd, so I am eager to hear the numbers.
I know ODT is eager about the upcoming final rule that will further define the term "swap". Swap dealers will be required to submit data under Part 20 just 60 days after that final rule is published. Today, 50% of clearing members are in compliance with the FIXML or FpML reporting, and given what we have put them through, that is good news to me.
The lesson, I think, has been learned: swaps and futures markets are different. The large trader reporting project proves my point that the Commission must spend an appropriate amount of time understanding swaps markets and the ramifications of these rules, including the cost and benefits of each and every rule before they are finalized, not after.
Some of you may know that I have been very critical of the Commission's cost-benefit analyses. The Commission previously minimized the role of performing complete cost-benefit analyses by turning the process into an administrative, check-the-box exercise. The good news is the Commission has altered course and the Chairman recently signed a Memorandum of Understanding with the Office of Information and Regulatory Affairs ("OIRA") within the White House to provide technical expertise in order to develop a more thorough process for conducting the Commission's cost-benefit analyses during the implementation of the Dodd-Frank Act.
In my view, there are three critical areas where the Commission can and must improve its cost-benefit analysis. First, the Commission should develop a realistic and status quo ante baseline. Second, the Commission should develop replicable quantitative analysis, which will allow it to make informed decisions about the market. Finally, the Commission should develop a range of policy alternatives for consideration. All three of these standards are best practices recommended in the Office of Management and Budget Circular A-4, Regulatory Analysis, which was issued in 2003. I can't help but wonder that if we had committed the time and resources towards engaging in more thorough cost-benefit analyses that considered not only the differences between the futures and swaps markets, but that set appropriate baselines, considered alternatives, and truly attempted to quantify those baselines and alternatives, that we wouldn't be challenged as an agency to put forth rules that are sure to stand the test of time—or at least a legal challenge. Plastic might last for an awful long time, but our rules need to be even stronger than that. We need to move on from that illusion and be "different."
Budget
Before I close, I would like to a moment to highlight the budget situation.
This year, we have a unique budget situation. There are two budget deals that the Commission must manage. The first is our annual appropriation. Every year, brings uncertainty when the House and Senate produce two different funding solutions. This year is no different, and it will be resolved. The Senate and House will reconcile their differences and we are likely to have more funding in 2013 than we have in 2012. The only remaining question is, "When?"
The second budget factor is the debt summit that Congress and the Administration agreed to last August. This deal is set to implement on Jan 1, 2013, and it will automatically cut discretionary spending government-wide by 8 percent ($1.2 trillion in 2013). The impact on the Commission's current year budget would be a $16.4 million reduction, translating to $188 million in total spending.
I am not aware of any plan of action for the Commission to hedge its budget exposure in the likely event that the mandatory cuts occur in January. I want to make sure the Commission avoids layoffs or other morale-busting action. Also, I don't think anyone can predict what spending baseline the January cuts will be initiated. The prudent action is to avoid over-spending until our budget future is clear.
I have asked our budget officers for some information about the Commission's spending outlook. Today, we have 692 people on board, less than the 710 FTE's planned for under our $205.3 M budget. This amounts to $130 million in spending on employees and $45 million on IT, which is $175 million total, $13 million below the level proposed to be cut in January.
Just like the markets, we need to hedge our risk. Clearly our most pressing risk is the impact of morale-busting layoffs. We have worked our staff extraordinarily hard to develop the rules, take the meetings and respond to questions. Now we are moving toward critically important rules (e.g. margin, SEF, mandatory clearing and trading, definitions, extraterritoriality). We are also entering into the implementation phase. We need people to interpret the vague and uncertain rules we have just put into effect.
Now is the time for the Commission to lock in our hedge, freeze our spending so we don't risk over-spending and forced layoffs. This debt summit deal has been in place for almost one year. To not prepare for the worst would be irresponsible and unfair to our current employees and the Commission as a whole.
Closing
Without a doubt the Commission has a number of very real challenges ahead. First, we are adapting sensible rules that fulfill the statutory mandates of the Dodd-Frank Act. These rules must be developed with careful cost benefit analyses to ensure both the market and the Commission have the capacity to implement the proposals in a cost-effective and timely manner. We must also pay closer attention to the rule implementation. The more we work to understand the impact of our rules, the more likely the implementation process will be successful.
Second, as we approach the end of the fiscal year, we must be very careful about our spending. The budget challenges facing this nation are real and must be addressed. As such, the Commission must pick its path carefully to navigate the fiscal challenges ahead.
Finally, the Commission must make technology a much higher priority. We have taken the right steps to begin to adopt the 21st Century market technology, and put the fax machine era in our rear-view mirror, but we still have a long way to go before we are at an acceptable position. We also need to work hard to continue to understand the role technology plays in both the fundamental trading strategies as well as the microstructure strategies that the HFTs deploy. I will continue to use the Technology Advisory Committee to engage market participants to find solutions to these challenging questions.
Thank you.
I suppose that doesn't come as a surprise to anyone in this room full of visionaries. Technology is a tremendous asset; it provides leverage and is a force multiplier. My two eldest daughters, Kelsey and Claire, both have quite an aptitude for math and science. Looking towards their future, I hope that they will hear me when I tell them in their own times of uncertainty, "Technology."
As a regulator, it is an honor to be invited to speak at an event like this since most folks don't think of the Commodity Futures Trading Commission ("CFTC") when it comes to technology. And frankly, that makes sense since we have largely remained in the world of "plastics" when it comes to deploying and utilizing technology to support our oversight responsibilities.
Today, in addition to addressing technology in the markets and in the hands of regulators, I would also like to discuss a few other topics including the Commission's rulemaking progress and budget issues as they relate to implementation of the Dodd-Frank Act and the choices we are making. I'm also happy to answer any questions you may have at the end.
I am grateful for the kind introduction by SIFMA President and CEO Tim Ryan. I would like to give you a few more details about my background and explain why I am so focused on technology.
Prior to my nomination to the Commission, I served as the Clerk of the Senate Committee on Appropriations, Subcommittee on Energy and Water where I had responsibility for funding the Department of Energy ("DoE"). That position's mission was focused on deploying improved energy technologies. But, what few people realize is that the DoE also funds research on everything from nuclear physics to the nuclear weapons program. Simulating, solving and understanding the most challenging physics questions require massive computer hardware and software operating at speeds that previously didn't exist. And it was my job to fund this cutting edge technology.
After the ban on underground nuclear testing, the weapons program relied heavily on computer simulation that required bigger and faster computers than what currently existed. So, we invested millions of research dollars into advanced computing and simulation. I am especially proud of the Roadrunner supercomputer, a joint effort with Los Alamos National Laboratory and IBM to create what was then the world's fastest computer. On May 25, 2008, Roadrunner became the first computer to break and sustain the petaFLOP barrier by processing more than 1.026 quadrillion calculations per second. As you all can imagine it is hard to just walk away from one million, billion calculations per second. And, so I didn't.
Technology Advisory Committee 2.0
I have continued to fly the technology flag, and I have focused a great deal of my term thus far on advancing the use of technology to more effectively meet the CFTC's surveillance, oversight and regulatory responsibilities largely through reestablishing and chairing the Technology Advisory Committee (TAC).
We are re-chartering for a second two-year term, and, like every technology upgrade, I have branded it TAC 2.0.
I have been fortunate enough to bring together a diverse membership with industry-wide expertise and shared goals of establishing technological "best practices" for oversight and surveillance while informing the Commission of the technological issues related to ongoing rulemakings under the Dodd-Frank Act. We have covered such issues as pre-trade functionality and pre-trade credit checks, data collection standards, technological surveillance and compliance, the deployment of technology solutions in the swaps market, and most recently, algorithmic and high frequency trading. To put a finer point on what we have accomplished since bringing back the TAC in June 2010 with its 24 charter members, we have:
- Held seven public meetings;
- Established the 19-member Subcommittee on Data Standardization charged with providing recommendations based on public/private solutions for creating well-accepted standards for describing, communicating, and storing data on complex financial products;
- Established the 23-member Subcommittee on Automated and High Frequency Trading charged with advising the Commission as to a working definition of high frequency trading ("HFT") in the context of automated trading strategies;
- Issued Recommendations on Pre-Trade Practices for Trading Firms, Clearing Firms and Exchanges involved in Direct Market Access; and
- Issued recommendations on data standardization through the use of legal entity and product identifiers.
CFTC is the LEI Leader
In reviewing today's agenda, I noticed that the Legal Entity Identifier ("LEI") is a panel topic. Let me take a moment to update you on where the Commission currently is in its LEI implementation strategy. There is good news and not so good news depending on your time horizon. In terms of progress at the CFTC, I've got some good news. As to the Global LEI, the news is not as good.
By way of brief background, the CFTC's swap reporting rules require that counterparties report their trades to a swap data repository (SDR) and be identified by a legal entity identifier. LEIs will be a crucial data aggregation tool that enables the CFTC to utilize the data in SDRs to perform the fundamental mission of monitoring both the swaps and futures markets. It will also give us insight into systemic risk exposure, one of the main goals of the Dodd-Frank Act.
CFTC Leads in Establishing the Legal Entity Identifiers
As was made abundantly clear by the TAC Subcommittee on Data Standards in its final recommendations at our March meeting, a LEI is feasible and the sooner we apply it, the better. As I noted, there is good news and not so good news. The good news is that the Commission is moving to bring LEI's online for U.S. firms (or anybody transacting in the U.S.) to have an LEI by the time mandatory reporting is required for credit swaps and interest rate swaps, which will be 60 calendar days after the publication in the Federal Register of the Commission's final rule providing further definition of "swap" (a/k/a "Compliance Date 1").[1]
As part of its cooperation with international process, and because the use of identifiers will begin in reporting under CFTC jurisdiction before the global system is established, CFTC is referring to the identifier to be used in reporting under its rules as the CFTC Interim Compliant Identifier or the "CICI". The Commission anticipates that when the global LEI system is established, the CICI will transition into the global system.
On March 9, 2012 the Commission requested submissions from industry participants wishing to be considered to provide the CICI. The Commission received submissions from several industry participants, and all candidates have provided written demonstrations and live, on-site demonstrations. As I mentioned earlier, the Commission anticipates determining whether a CICI meeting its requirements is available, and designating that provider as the source for CICIs to be used in swap data reporting under Commission jurisdiction, in the very near future.
Status of International LEI Process Coordinated by FSB
While, I was assured that the initial issuance of LEIs by an international body would occur by spring 2012, the international effort has been delayed until March of 2013. The delays are related to governance issues and the insistence upon greater public sector involvement, albeit they still require a private sector solution to implement the systems.
At its May 2012 meeting in Hong Kong, the Financial Standard Boards ("FSB") approved recommendations for a global LEI system to the G-20 Leaders for consideration (this week) at their summit in Los Cabos, Mexico.[2]
The recommendations set out a three-tiered governance framework that includes:
- A Regulatory Oversight Committee (ROC) committed to support governance in the public interest;
- A Central Operating Unit (COU) for ensuring application of uniform global operational standards, and having a Board of Directors that may include both industry representatives and independent participants; and
- Local Operating Units (LOUs) that provide the primary interface for entities wishing to register for an LEI, and provide local implementations of the global system.
Let me remind you of the good news. In the meantime, the Commission will be adopting its interim LEI, and this should cover roughly half of the overall swaps market. I hope the timely application of an LEI by the Commission will reduce the costs of applying an LEI system retroactively.
HFT Technology in the Market
I would like to spend a few minutes to share with you my thinking on high frequency trading. This topic has generated passionate views, both pro and con, and spawned headlines, economic studies and even books on the subject.
HFT currently accounts for a majority (56% in 2011) of the U.S. equity volume[3] and is approaching 50% of our futures market transactions. The influx of high frequency traders are behind the massive trading volume increases. Supporters argue that HFTs are the modern pit trader market makers that narrow bids and provide essential liquidity. Detractors complain that HFT have changed the market dynamics by playing games with trade strategies that bait hedgers and have reduced trade size. The bottom line is there is no definition for, or, rather, there is a struggle to find an appropriate characterization of this practice in our markets.
In a forthcoming study to appear in The Journal of Portfolio Management, Easley, Lopez de Prado, & O'Hara[4] point out that automated trading systems have created two markets. One market populated by low frequency traders that focus on "macro factors" like available supply, monetary policy and financial statements, while the HFT market focuses "market microstructural factors such as "rigidities in price adjustments across markets" and "variations in matching engines." The authors accurately point out that the "the goal [of HFT] is to exploit inefficiencies derived for the markets microstructure, such as rigidities in price adjustment within and across markets [agents], idiosyncratic behavior and asymmetric information." What we have here is a tale of two markets operating in one venue.
This is a topic I am very interested in, especially in terms of its relative impact on the markets. What I find most intriguing about the debate itself is that it is not always clear that folks on the pro side and folks on the con side are even talking about the same thing. One person's HFT may not be another's. In an effort to take the first step and define the practice, last November, I sent a letter to the Technology Advisory Committee members asking them for their opinion on a definition of HFT. After hearing back from them, I took the next step and formed through a public nomination process the Subcommittee on Automated and High Frequency Trading to develop an appropriate definition of HFT within the universe of automated trading. My goal is to have a working description of the attributes of HFT activities in order to better understand the impact they have on our markets. Developing a nomenclature is important if only as a means to study this trading activity on a consistent basis. Before we implement a new regulatory regime on any continent or in cyberspace, I believe we need to agree on what and who comprises this growing segment of our markets.
Within the ATS/HFT Subcommittee, we have established four working groups, each tasked with identifying specific issues associated with automated trading. The first working group is tasked with defining high frequency trading within the context of automated trading systems. The second group is examining whether or not there should be multiple categories of HFT. Specifically, this working group is examining distinctions in trading activity and how such distinctions should be identified or tagged by the exchanges in which they operate. The third working group is focusing on oversight, surveillance and economic analysis, to understand how HFTs behave as compared to other automated systems. The fourth working group is addressing market micro structure issues to identify possible disruptions that might be provoked by automated trading systems and potential solutions to mitigate such events. Under the leadership of CFTC Chief Economist Andrei Kirilenko and fellow CFTC staff these working groups have been conducting weekly conference calls and will be presenting their preliminary views at the public meeting of the TAC I am holding tomorrow at our CFTC headquarters in Washington.
My goal is to collect the facts, develop the data about the impact of HFT (and all automated trading for that matter) and establish a consistent, universally acceptable view on our new market participants. I never intended to assemble this group to develop rulemakings. This expert group was organized to define and discuss the current and potential impacts of HFT in the futures and swaps markets. It is up to the Commission to develop the policy solutions, and I hope that the Commission will benefit from the extensive debate and hard work of the Subcommittee as well as empirical market data before it considers taking action.
Technology in the Hands of Regulators
Technology in the hands of regulators is a good thing, and I will always support it in any role I have. We are now at the CFTC only beginning to leave "plastics," but our new Office of Data and Technology headed by Chief Information Officer John Rogers is making progress. Trust me, it is all relative. What my colleagues are seeing now is that technology offers us the opportunity to see across our jurisdictional markets (futures and swaps) and the only way we can develop the appropriate level of surveillance is through the deployment of algorithms and automation. Expanding our surveillance to include order data will require additional hardware to store and sort a massive amount of data. The CFTC has a long way to go, especially when it comes to automating some of our more mission-critical goals such as monitoring systemic risk, but we have learned a thing or two during our first attempts to automate large trader reporting for swaps and I have some ideas as to how we can leverage our expertise.
High-Frequency Regulation
One thing I have been critical of is our speed of regulation—which has nothing to do with technology. In fact, it is speed that I think has caused us to err in some of our rules such as the large trader swaps reporting rules and in our cost-benefit analyses. I do have good news on both fronts though, and things are looking bright and shiny, but not like plastic.
For those of you who are unfamiliar with the typical Washington rulemaking process, it is generally long and all-consuming. Before the Dodd-Frank Act, the Commission issued three or four rules a year at best. My friend and former Commissioner Mike Dunn would always say that most of the Commission's rules normally take anywhere from 15 to 18 months to finalize. So, trying to complete more than 50 rules in that amount of time guarantees mistakes and errors.
Remember the bumper sticker during Bill Clinton's 1992 campaign, "It's the economy, Stupid". Well, that is still true today. However, in the Dodd-Frank microcosm "It's the implementation, Stupid." Let me give you an example of how important it is for the Commission to develop well thought out rules, informed by actual and realistic cost benefit analysis. We can't guess or make assumptions about the swaps market and hope or expect market participants will be able to comply.
The Commission passed its final large trader reporting rule for physical commodity swaps under Part 20 in July 2011.[5] There were a number of problems including:
- The futures and options position reporting format under Parts 16 and 17 of the Commission regulations simply could not accommodate the new data needs for Part 20 swap reporting, and
- Industry standards for large trader swaps reporting (via XML) did not exist.
- The Industry couldn't comply within the two-month implementation deadline, and an extension had to be grated.[6]
- On December 7, 2011, the Commission issued a 172-page guidebook[7], which was longer than the rule itself.
On November 20, 2011, the Commission started to receive records on a limited basis. Today, our CIO informs me that we are now receiving approximately 500,000 records per day from clearing members and an additional 200,000 records from clearing organizations. The no-action relief issued to reporting industry participants by the Division of Market Oversight[9] will end in less than two weeks on July 2nd, so I am eager to hear the numbers.
I know ODT is eager about the upcoming final rule that will further define the term "swap". Swap dealers will be required to submit data under Part 20 just 60 days after that final rule is published. Today, 50% of clearing members are in compliance with the FIXML or FpML reporting, and given what we have put them through, that is good news to me.
The lesson, I think, has been learned: swaps and futures markets are different. The large trader reporting project proves my point that the Commission must spend an appropriate amount of time understanding swaps markets and the ramifications of these rules, including the cost and benefits of each and every rule before they are finalized, not after.
Some of you may know that I have been very critical of the Commission's cost-benefit analyses. The Commission previously minimized the role of performing complete cost-benefit analyses by turning the process into an administrative, check-the-box exercise. The good news is the Commission has altered course and the Chairman recently signed a Memorandum of Understanding with the Office of Information and Regulatory Affairs ("OIRA") within the White House to provide technical expertise in order to develop a more thorough process for conducting the Commission's cost-benefit analyses during the implementation of the Dodd-Frank Act.
In my view, there are three critical areas where the Commission can and must improve its cost-benefit analysis. First, the Commission should develop a realistic and status quo ante baseline. Second, the Commission should develop replicable quantitative analysis, which will allow it to make informed decisions about the market. Finally, the Commission should develop a range of policy alternatives for consideration. All three of these standards are best practices recommended in the Office of Management and Budget Circular A-4, Regulatory Analysis, which was issued in 2003. I can't help but wonder that if we had committed the time and resources towards engaging in more thorough cost-benefit analyses that considered not only the differences between the futures and swaps markets, but that set appropriate baselines, considered alternatives, and truly attempted to quantify those baselines and alternatives, that we wouldn't be challenged as an agency to put forth rules that are sure to stand the test of time—or at least a legal challenge. Plastic might last for an awful long time, but our rules need to be even stronger than that. We need to move on from that illusion and be "different."
Budget
Before I close, I would like to a moment to highlight the budget situation.
This year, we have a unique budget situation. There are two budget deals that the Commission must manage. The first is our annual appropriation. Every year, brings uncertainty when the House and Senate produce two different funding solutions. This year is no different, and it will be resolved. The Senate and House will reconcile their differences and we are likely to have more funding in 2013 than we have in 2012. The only remaining question is, "When?"
The second budget factor is the debt summit that Congress and the Administration agreed to last August. This deal is set to implement on Jan 1, 2013, and it will automatically cut discretionary spending government-wide by 8 percent ($1.2 trillion in 2013). The impact on the Commission's current year budget would be a $16.4 million reduction, translating to $188 million in total spending.
I am not aware of any plan of action for the Commission to hedge its budget exposure in the likely event that the mandatory cuts occur in January. I want to make sure the Commission avoids layoffs or other morale-busting action. Also, I don't think anyone can predict what spending baseline the January cuts will be initiated. The prudent action is to avoid over-spending until our budget future is clear.
I have asked our budget officers for some information about the Commission's spending outlook. Today, we have 692 people on board, less than the 710 FTE's planned for under our $205.3 M budget. This amounts to $130 million in spending on employees and $45 million on IT, which is $175 million total, $13 million below the level proposed to be cut in January.
Just like the markets, we need to hedge our risk. Clearly our most pressing risk is the impact of morale-busting layoffs. We have worked our staff extraordinarily hard to develop the rules, take the meetings and respond to questions. Now we are moving toward critically important rules (e.g. margin, SEF, mandatory clearing and trading, definitions, extraterritoriality). We are also entering into the implementation phase. We need people to interpret the vague and uncertain rules we have just put into effect.
Now is the time for the Commission to lock in our hedge, freeze our spending so we don't risk over-spending and forced layoffs. This debt summit deal has been in place for almost one year. To not prepare for the worst would be irresponsible and unfair to our current employees and the Commission as a whole.
Closing
Without a doubt the Commission has a number of very real challenges ahead. First, we are adapting sensible rules that fulfill the statutory mandates of the Dodd-Frank Act. These rules must be developed with careful cost benefit analyses to ensure both the market and the Commission have the capacity to implement the proposals in a cost-effective and timely manner. We must also pay closer attention to the rule implementation. The more we work to understand the impact of our rules, the more likely the implementation process will be successful.
Second, as we approach the end of the fiscal year, we must be very careful about our spending. The budget challenges facing this nation are real and must be addressed. As such, the Commission must pick its path carefully to navigate the fiscal challenges ahead.
Finally, the Commission must make technology a much higher priority. We have taken the right steps to begin to adopt the 21st Century market technology, and put the fax machine era in our rear-view mirror, but we still have a long way to go before we are at an acceptable position. We also need to work hard to continue to understand the role technology plays in both the fundamental trading strategies as well as the microstructure strategies that the HFTs deploy. I will continue to use the Technology Advisory Committee to engage market participants to find solutions to these challenging questions.
Thank you.
Germans talking some truth
"It is rather hypocritical when the Americans and the British, whose own
mountains of debt have reached a high point, try to lecture the Europeans.
One number is sufficient to reveal what a bad tactic this is. At a time when the budget deficits of the US and Great Britain are about 8 percent, the euro-zone members have almost managed to bring their deficits as a whole down to 3 percent." And they are spot on: Europe may be going through a painful time but at least it is doing something to address its problems.
America continues to rely on the printing press.
One number is sufficient to reveal what a bad tactic this is. At a time when the budget deficits of the US and Great Britain are about 8 percent, the euro-zone members have almost managed to bring their deficits as a whole down to 3 percent." And they are spot on: Europe may be going through a painful time but at least it is doing something to address its problems.
America continues to rely on the printing press.
Tuesday, June 19, 2012
Barney Frank
Barney Frank is on CNN tonight blaming the Republicans for not having Dodd-Frank fully funded.
The guy who got the ball rolling for the 2008 crisis is still at it. These clowns have no shame.
The guy who got the ball rolling for the 2008 crisis is still at it. These clowns have no shame.
Monday, June 18, 2012
Could Chicago pass stricter gun control laws?
I know Fathers Day brings alot of confusion to Chicago but geez, this is alot of liberal gunnery gone bad. If Obama had a city I bet it would look like Chicago.
Another sweltering weekend brought more violence to Chicago’s streets – with eight people killed and 37 others wounded in shootings or stabbings between Friday afternoon and early Monday morning.
Another sweltering weekend brought more violence to Chicago’s streets – with eight people killed and 37 others wounded in shootings or stabbings between Friday afternoon and early Monday morning.
Nothing will happen in Europe
For Greece to get it right there has to be debt forgiveness or default. Yes, there will be chaos. The ball is in Germany’s court now; relinquish or face defeat in Greece. Relinquish and face defeat at home. This is the eye of the hurricane.
When it comes to Greece there is one word and only one word that makes any difference and that word is “Default.” Europe cannot afford it. Greece has $1.3 trillion in total debt and a vast amount of it now resides at the ECB either in direct sovereign obligations or in securitizations where loans, asset-backed securities and mortgages have been guaranteed by the banks, all of which are bankrupt and being supported by the EU or by the sovereign which has the same credit quality as a beggar on the streets in Calcutta.
All that the Greek elections did really was to provide a more friendly negotiator than the opposition but the numbers speak for themselves and they are unsustainable. The EU made the private bond holders pick-up part of the tab while lending Greece $35 billion more than was written off. Old debt was paid off with new debt; an old story and almost always the same conclusion. So, Berlin, it's time to man-up. It's fourth down and punt.
For us, you and I, nothing happens until the socialist utopia finally runs out of other people's money.
Let us in America hope and pray, versus hopium and delusion, that the Chief Teleprompter doesn't send American taxpayer dollars to Europe in massive quantities to keep the game alive any longer.
Sunday, June 17, 2012
Can't we all learn to swim better?
One hopes that the 3 children of Rodney King would be financially taken care of, at least not having to depend on any government assistance after all the money King made in his life.
The IRS in Greece.......
Tax evasion, a national pastime, has got worse, not better, since the crisis, according to one of the senior NDOE officials, Nikos Lekkas. "The job has become a lot more difficult," he says.
Of Greece's five million taxpayers, just 33 last year declared an income of more than £750,000. Fewer than 300 declared an income between £400,000 and £750,000. Higher taxes required by the crisis mean that even businesses which paid up before have started hiding money to keep going.
When Nikos Maitos, one of Lekkas's investigators, went to the hard-pressed island of Naxos to look for tax evaders, a local radio station broadcast his car registration number to warn residents. Banks have obstructed 5,000 requests for data on rich suspected avoiders, Lekkas said. "They delay sending information for 8 to 12 months," he says. "And when they do, they send huge stacks of documentation to make it confusing. By the time we can follow up, much of the money has already fled."
Even though there has been a crackdown on some high-profile evaders, with arrests and even the odd jail sentence, the results have not been everything the inspectors hoped for. One of the people Lekkas's staff arrested - Leon Levi, the owner of fitness firm BodyLine - was sentenced to three years in jail for owing about €620,000. But he was allowed to avoid prison by paying €10 a day for the duration of his sentence: a bargain-basement €11,000.
Perhaps the most telling group of all, however, are the 500 or so politicians and former politicians who Lekkas is investigating: a number, incidentally, excluding current MPs, who are immune. Prosecutors are currently trying to get the immunity of one particular MP, Dora Bakoyannis, lifted, accusing her of involvement in the illegal transfer of $1 million by her husband to a London bank account to avoid tax. (She denies the claims, saying they are "politically-motivated.")
Of Greece's five million taxpayers, just 33 last year declared an income of more than £750,000. Fewer than 300 declared an income between £400,000 and £750,000. Higher taxes required by the crisis mean that even businesses which paid up before have started hiding money to keep going.
When Nikos Maitos, one of Lekkas's investigators, went to the hard-pressed island of Naxos to look for tax evaders, a local radio station broadcast his car registration number to warn residents. Banks have obstructed 5,000 requests for data on rich suspected avoiders, Lekkas said. "They delay sending information for 8 to 12 months," he says. "And when they do, they send huge stacks of documentation to make it confusing. By the time we can follow up, much of the money has already fled."
Even though there has been a crackdown on some high-profile evaders, with arrests and even the odd jail sentence, the results have not been everything the inspectors hoped for. One of the people Lekkas's staff arrested - Leon Levi, the owner of fitness firm BodyLine - was sentenced to three years in jail for owing about €620,000. But he was allowed to avoid prison by paying €10 a day for the duration of his sentence: a bargain-basement €11,000.
Perhaps the most telling group of all, however, are the 500 or so politicians and former politicians who Lekkas is investigating: a number, incidentally, excluding current MPs, who are immune. Prosecutors are currently trying to get the immunity of one particular MP, Dora Bakoyannis, lifted, accusing her of involvement in the illegal transfer of $1 million by her husband to a London bank account to avoid tax. (She denies the claims, saying they are "politically-motivated.")
David Plouffe
Watching this fruit cake this morning on CNN was rather disturbing.
What an accomplished liberal liar.
What an accomplished liberal liar.
Saturday, June 16, 2012
from BROKEN MARKETS........
"We dedicate this book to the executives at the major U.S. stock exchanges, to high frequency trading firms, to lobbyists, and to numerous other conflicted parties in Washington, D.C., and Wall Street. Without your actions, we would never have become outraged enough to write this book."
Sal Arnuk and Joseph Saluzzi have put together a book that should be required reading for every regulator, exchange official, Wall Street chief and every single individual investor in America.
Investing without reading this book is dangerous to your net worth.
Sal Arnuk and Joseph Saluzzi have put together a book that should be required reading for every regulator, exchange official, Wall Street chief and every single individual investor in America.
Investing without reading this book is dangerous to your net worth.
Obama, the Master-of-Disaster
President Obama loves the campaign trail. Raising more money is what it is all about. He needs to lay off the beans and burrito's though. The political ploy to turn criminals into citizens is more than brazen but that is his M.O.
With this Master-of-Disaster there no end to his niche pandering. First, he caters to the homosexuals and tells them gay marriage is OK. Then he caters to the financially irresponsible and promises them $3000 to buy thingamajigs. Now he caters to the illegal immigrants and says they can have jobs as long as they haven't committed a crime. (Ignoring the central fact that their existence in this country is a crime!) What's next, amnesty for eco-terrorists?
Legalizing over 800,00 illegals and adding them to compete with Americans for jobs should do wonders for unemployed Americans looking for jobs. I would think Jesse and Al would be pissed.
With this Master-of-Disaster there no end to his niche pandering. First, he caters to the homosexuals and tells them gay marriage is OK. Then he caters to the financially irresponsible and promises them $3000 to buy thingamajigs. Now he caters to the illegal immigrants and says they can have jobs as long as they haven't committed a crime. (Ignoring the central fact that their existence in this country is a crime!) What's next, amnesty for eco-terrorists?
Legalizing over 800,00 illegals and adding them to compete with Americans for jobs should do wonders for unemployed Americans looking for jobs. I would think Jesse and Al would be pissed.
Friday, June 15, 2012
Immigrants to America
If Obama can't creat any jobs for Americans at least he can try to incentivize other criminals to come to America with their children. Now that's some incentive for them to come. It must be an election year!
Your government at work.......
Washington Biz Journal.........1/21/2011
What were they thinking?
The Securities and Exchange Commission made big news last August when it signed a lease for 900,000 square feet at Constitution Center, the former Department of Transportation headquarters in Southwest D.C.
Since then, it’s been pretty much downhill for the agency.
Consider:
○ On Sept. 30, the inspector general released an audit of the SEC’s leasing practices, saying the SEC “does not have adequate policies in place and, until very recently, had no final leasing policies and procedures.”
○ On Nov. 2, Republicans won control of Congress, casting doubt on whether the SEC’s fiscal 2011 funding for new employees would be approved.
○ On Dec. 10, the agency came clean, notifying the General Services Administration that it wouldn’t need 600,000 of the square feet it had leased just four months earlier.
And now comes word that the inspector general has launched a formal investigation into the whole thing. And you can be sure the Republicans on the Hill are keeping a close eye on the developments.
For anyone in Washington business, this is a tough issue. It’s hard for us to reconcile our views about bloated government with our aspirations for the Washington economy. Every million-square-foot lease or billion-dollar contract, however bad for taxpayers, is a boon for us. The trickledown effect is undeniable.
It’s hard not to root for a local landlord’s huge win. We all know the risk the landlord, David Nassif Associates, took in its effort to rehab the former DOT headquarters into a state-of-the-art, highly secure building perfect for a federal tenant. We know that the building sat empty for a while after it was finished, and we know removing nearly 1 million square feet from the area’s building inventory will help other landlords bidding for major government leases. We also know the SEC lease lowered the office vacancy rate, strengthening the market for all landlords.
But none of that justifies signing the federal lease, the largest in a decade, at a cost of more than $400 million over 10 years. What could possibly have been the motivation for inking this deal, which came just months after the SEC leased 200,000 square feet at its Station Place headquarters near Union Station? Did the SEC tap an intern to handle its real estate? Was the intern drunk? Was the leasing rate too good to refuse — lease one square foot, get one free?
The SEC said the space would support 800 workers it wanted to hire to help implement financial regulatory reform. But even if Congress had appropriated the SEC’s full funding request, the agency still wouldn’t have needed that much space. Let’s face it: There is absolutely no formula available to justify that amount of space per employee. If the SEC wanted to help the local economy, it should have hired a good interior architecture firm to do some space planning.
No one likes to have decisions second-guessed, but sometimes it can’t be avoided. This lease was a major flub, a business blunder right up there with Toyota’s recalcitrance, Conan O’Brien’s “Tonight Show” and Gap’s attempt at a new logo.
This is the kind of thing someone should lose their job over.
We’d like some answers, but few are talking. Our reporter Sarah Krouse has repeatedly asked the SEC for details on what it will do with the space, how it will release it and why it leased it in the first place. But no clear answers have come. GSA officials aren’t commenting; it’s not their problem, after all. David Nassif Associates isn’t saying much. That’s probably wise. The company has a signed lease for 70 percent of the building, so it can pretty much sit back and watch the carnage.
I’m by no means an anti-government critic, but this lease represents what’s wrong with Washington. Just because it’s good for Washington business does not mean it’s good for America.
What were they thinking?
The Securities and Exchange Commission made big news last August when it signed a lease for 900,000 square feet at Constitution Center, the former Department of Transportation headquarters in Southwest D.C.
Since then, it’s been pretty much downhill for the agency.
Consider:
○ On Sept. 30, the inspector general released an audit of the SEC’s leasing practices, saying the SEC “does not have adequate policies in place and, until very recently, had no final leasing policies and procedures.”
○ On Nov. 2, Republicans won control of Congress, casting doubt on whether the SEC’s fiscal 2011 funding for new employees would be approved.
○ On Dec. 10, the agency came clean, notifying the General Services Administration that it wouldn’t need 600,000 of the square feet it had leased just four months earlier.
And now comes word that the inspector general has launched a formal investigation into the whole thing. And you can be sure the Republicans on the Hill are keeping a close eye on the developments.
For anyone in Washington business, this is a tough issue. It’s hard for us to reconcile our views about bloated government with our aspirations for the Washington economy. Every million-square-foot lease or billion-dollar contract, however bad for taxpayers, is a boon for us. The trickledown effect is undeniable.
It’s hard not to root for a local landlord’s huge win. We all know the risk the landlord, David Nassif Associates, took in its effort to rehab the former DOT headquarters into a state-of-the-art, highly secure building perfect for a federal tenant. We know that the building sat empty for a while after it was finished, and we know removing nearly 1 million square feet from the area’s building inventory will help other landlords bidding for major government leases. We also know the SEC lease lowered the office vacancy rate, strengthening the market for all landlords.
But none of that justifies signing the federal lease, the largest in a decade, at a cost of more than $400 million over 10 years. What could possibly have been the motivation for inking this deal, which came just months after the SEC leased 200,000 square feet at its Station Place headquarters near Union Station? Did the SEC tap an intern to handle its real estate? Was the intern drunk? Was the leasing rate too good to refuse — lease one square foot, get one free?
The SEC said the space would support 800 workers it wanted to hire to help implement financial regulatory reform. But even if Congress had appropriated the SEC’s full funding request, the agency still wouldn’t have needed that much space. Let’s face it: There is absolutely no formula available to justify that amount of space per employee. If the SEC wanted to help the local economy, it should have hired a good interior architecture firm to do some space planning.
No one likes to have decisions second-guessed, but sometimes it can’t be avoided. This lease was a major flub, a business blunder right up there with Toyota’s recalcitrance, Conan O’Brien’s “Tonight Show” and Gap’s attempt at a new logo.
This is the kind of thing someone should lose their job over.
We’d like some answers, but few are talking. Our reporter Sarah Krouse has repeatedly asked the SEC for details on what it will do with the space, how it will release it and why it leased it in the first place. But no clear answers have come. GSA officials aren’t commenting; it’s not their problem, after all. David Nassif Associates isn’t saying much. That’s probably wise. The company has a signed lease for 70 percent of the building, so it can pretty much sit back and watch the carnage.
I’m by no means an anti-government critic, but this lease represents what’s wrong with Washington. Just because it’s good for Washington business does not mean it’s good for America.
Thursday, June 14, 2012
Insanity at the Fed..........
Yesterday the supreme absurdity of having the Fed buy 10 year Bonds two hours before
the Treasury sold 10 year bonds (which obviously priced at terrific terms as
there was a $4 billion hole created courtesy of the Fed if only for 2 hours).
Today, the lunacy continues. The Fed has just bought $2 billion in 30 year bonds just two hours before the Treasury sells $13 billion in 30 year paper. The ponzi has become so glaring they don't even care to hide it any longer.
Today, the lunacy continues. The Fed has just bought $2 billion in 30 year bonds just two hours before the Treasury sells $13 billion in 30 year paper. The ponzi has become so glaring they don't even care to hide it any longer.
Wednesday, June 13, 2012
Jordan Parisian and HS pals.........
Jordan Parisian (in red Milton shirt) and pals playing some real football at the 801!
God help us from ourselves
I wonder how our military men and women feel when they watch such ignorance.
Click on these links and be scared for our country.
Ignorant citizens, ignorant people
Great question, no answers
God help us all. Michael Savage is right. The enemy is within.
Click on these links and be scared for our country.
Ignorant citizens, ignorant people
Great question, no answers
God help us all. Michael Savage is right. The enemy is within.
Learn something from Jim Rogers
Click on this link first and listen to his every word.
Jim Rogers, Alabama's smartest!!
Raised in Alabama, Rogers started in business at the age of five, collecting empty soda bottles at the local baseball field. After graduating from Yale University in 1964, he won a scholarship to Balliol College, Oxford. He then got his first job on Wall Street.
Rogers now lives in Singapore with his wife and their two young daughters.
Did you think you would get to where you are?
No, I am as surprised as anyone. I certainly wanted to get somewhere and was willing to work hard. I wanted to retire young, but I never thought I would retire before 40.
When you realised that you had made your first million were you tempted to slow down?
I can remember the exact day of my first million dollars’ net worth. It was in November 1977. I was 35. I knew I needed more than that to do what I wanted when I was 37 – the age I decided to stop working to seek adventure.
What is the secret of your success?
As I was not smarter than most people, I was willing to work harder than most. I was prepared to examine conventional wisdom. If everyone thinks one way, it is likely to be wrong. If you can figure out that it is wrong, you are likely to make a lot of money.
What is your basic investment strategy?
Buy low and sell high. I try to find something that is very cheap, where a positive change is taking place. Then I do enough homework to make sure I am right. It has got to be cheap so that, if I am wrong, I don’t lose much money. Every time I make a mistake, it is usually because I did not do enough homework.
Do not underestimate the value of due diligence. In the 1960s, General Motors was the world’s most successful company. One day, a GM analyst went to the board of directors with the message: “The Japanese are coming.” They ignored him. Investors who did their homework sold their GM stock – and bought Toyota instead.
I’m not buying any stocks at the moment. If anything is undervalued now it is commodities and some currencies.
What has been your most spectacular gain?
The Quantum Fund. When we started the company in 1970, I had $600 in my pocket. Within 10 years, the portfolio had gained 4,200 per cent.
Do you want to carry on till you drop?
No. These days, I spend very few hours a day working, because I have two little girls and I want to spend as much time with them as possible.
Both our girls have a Chinese governess and speak fluent Mandarin. For their generation, Mandarin and English will be the most important languages.
Have you made any pension provision?
I don’t have a pension because I hope I don’t need one. I have accumulated assets and that is what I live on.
What is your commitment to charity?
I have given money to students and schools around the world. I try to give scholarships to students rather than schools, because the students need the money more than administrators.
Do you allow yourself the odd indulgence?
I have been around the world twice. Setting off in 1990, I spent 22 months travelling through six continents on a motorcycle.
On my second trip, which started in 1999, my wife and I travelled for three years through 116 countries in a custom-made Mercedes.
What is the most you have ever paid for a bottle of fine wine or champagne?
I don’t have an upper limit for champagne, but I’ve never had the urge to spend $2,000 on a bottle of wine. I always remember my background. I did not have money as a kid.
Picasso or Art Deco as an investment?
I am at a stage where I am not interested in having or amassing stuff.
Do you believe in passing your wealth to children?
I’ve always thought that, if you give children too much, you will ruin them.
I have set up my will so they don’t get much until they are at least 30.
I went to Yale and Oxford and a lot of rich kids were there who never had to work. I know I want my children to be well-educated and experience the workplace.
Education and the necessity to work changed my life and yanked me out of the backwater of Alabama.
Where should people put their money in the recession?
Invest only in things you know something about. The mistake most people make is that they listen to hot tips, or act on something they read in magazines.
Most people know a lot about something, so they should just stick to what they know and buy an investment in that area. That is how you get rich.
You don’t get rich investing in things you know nothing about.
Jim Rogers, Alabama's smartest!!
Raised in Alabama, Rogers started in business at the age of five, collecting empty soda bottles at the local baseball field. After graduating from Yale University in 1964, he won a scholarship to Balliol College, Oxford. He then got his first job on Wall Street.
Rogers now lives in Singapore with his wife and their two young daughters.
Did you think you would get to where you are?
No, I am as surprised as anyone. I certainly wanted to get somewhere and was willing to work hard. I wanted to retire young, but I never thought I would retire before 40.
When you realised that you had made your first million were you tempted to slow down?
I can remember the exact day of my first million dollars’ net worth. It was in November 1977. I was 35. I knew I needed more than that to do what I wanted when I was 37 – the age I decided to stop working to seek adventure.
What is the secret of your success?
As I was not smarter than most people, I was willing to work harder than most. I was prepared to examine conventional wisdom. If everyone thinks one way, it is likely to be wrong. If you can figure out that it is wrong, you are likely to make a lot of money.
What is your basic investment strategy?
Buy low and sell high. I try to find something that is very cheap, where a positive change is taking place. Then I do enough homework to make sure I am right. It has got to be cheap so that, if I am wrong, I don’t lose much money. Every time I make a mistake, it is usually because I did not do enough homework.
Do not underestimate the value of due diligence. In the 1960s, General Motors was the world’s most successful company. One day, a GM analyst went to the board of directors with the message: “The Japanese are coming.” They ignored him. Investors who did their homework sold their GM stock – and bought Toyota instead.
I’m not buying any stocks at the moment. If anything is undervalued now it is commodities and some currencies.
What has been your most spectacular gain?
The Quantum Fund. When we started the company in 1970, I had $600 in my pocket. Within 10 years, the portfolio had gained 4,200 per cent.
Do you want to carry on till you drop?
No. These days, I spend very few hours a day working, because I have two little girls and I want to spend as much time with them as possible.
Both our girls have a Chinese governess and speak fluent Mandarin. For their generation, Mandarin and English will be the most important languages.
Have you made any pension provision?
I don’t have a pension because I hope I don’t need one. I have accumulated assets and that is what I live on.
What is your commitment to charity?
I have given money to students and schools around the world. I try to give scholarships to students rather than schools, because the students need the money more than administrators.
Do you allow yourself the odd indulgence?
I have been around the world twice. Setting off in 1990, I spent 22 months travelling through six continents on a motorcycle.
On my second trip, which started in 1999, my wife and I travelled for three years through 116 countries in a custom-made Mercedes.
What is the most you have ever paid for a bottle of fine wine or champagne?
I don’t have an upper limit for champagne, but I’ve never had the urge to spend $2,000 on a bottle of wine. I always remember my background. I did not have money as a kid.
Picasso or Art Deco as an investment?
I am at a stage where I am not interested in having or amassing stuff.
Do you believe in passing your wealth to children?
I’ve always thought that, if you give children too much, you will ruin them.
I have set up my will so they don’t get much until they are at least 30.
I went to Yale and Oxford and a lot of rich kids were there who never had to work. I know I want my children to be well-educated and experience the workplace.
Education and the necessity to work changed my life and yanked me out of the backwater of Alabama.
Where should people put their money in the recession?
Invest only in things you know something about. The mistake most people make is that they listen to hot tips, or act on something they read in magazines.
Most people know a lot about something, so they should just stick to what they know and buy an investment in that area. That is how you get rich.
You don’t get rich investing in things you know nothing about.
JPM Bribery
Those bribed by Jamie Dimon are asking questions of the same person who
paid them. That this theatrical hearing will be a farce is by well known by
absolutely everyone. The reason it's called a bribe is simple. When it comes to "purchasing" a room full of Senators (not to mention the
script for today's "hearing"), JP Morgan is always at the top. It cost JP
Morgan just under $1 million, or $877,798.00 to be precise in lifetime campaign
contributions, to buy itself precisely one Senate Banking Committee.
And where it gets really fun is that between the Chairman, Tim
Johnson (D - SD), and the ranking member Richard Shelby (R - AL), JP Morgan has
been the top and second biggest campaign contributor, respectively.
Also, 9 (at least) of the total 22 members of the committee have received
some form of bribe from JPM over the years.
The average clueless American hasn't a grip on the fact that lobbyists spend over one billion dollars per day inside the Beltway. No wonder we are headed the way of Greece, Italy, Spain, etc.
Greeks, cash, guns and gold.......
One report says €700.0 million was snatched out of Greek banks yesterday alone,
and some put the daily average coming out of the banks in currency at €500.0 million.
Soon there will be no banks to bail out in Greece, so it could all be a moot point.
This is getting good. Gold looks awful shiny when we factor in the Greek man on the street.
How many guns are in Greece?
Soon there will be no banks to bail out in Greece, so it could all be a moot point.
This is getting good. Gold looks awful shiny when we factor in the Greek man on the street.
How many guns are in Greece?
Tuesday, June 12, 2012
Catholic Education, mine in particular
I was extremely fortunate to grow up in a family with a Mom and Dad who cared about who taught me and in what school. My parents made sacrifices to send me to private school in elementary and in high school for a short while. My High School commute was only 93 miles off the Indian reservation we were living on.
In conversation very recently it was asked of me what would I name as being the most important influences of my formal education. Without a shadow of a doubt it was the 4.5 school years I spent in Catholic School in Morris, MN. These are the teachers who taught me. Thank you each and every sister if you are still alive. Sister Michaelyn, Sister Justin, Sister Carmen and Sister Florence.
The Franciscan Sisters of Little Falls, Minnesota, is a Roman Catholic Congregation of religious women of the Third Order of St. Francis of Assisi. We dedicate ourselves to living joyfully through the Franciscan values of conversion, contemplation, poverty, and minority.
We are committed to a life of prayer, simple living, and service to those in need. We are dedicated to promoting human rights, building community wherever we live, and healing the sources of Mother Earth's wounds.
Located in the heartland of Minnesota, USA, we number 157 sisters and are joined by over 250 associates. While the majority of our Sisters live and minister in Minnesota, some of us minister in Arizona, California, Illinois, Mississippi, New Mexico, Texas, Wisconsin, Ecuador and Mexico. Our associates are from several U.S. states as well as from Ecuador, Venezuela, and Nicaragua.
In conversation very recently it was asked of me what would I name as being the most important influences of my formal education. Without a shadow of a doubt it was the 4.5 school years I spent in Catholic School in Morris, MN. These are the teachers who taught me. Thank you each and every sister if you are still alive. Sister Michaelyn, Sister Justin, Sister Carmen and Sister Florence.
The Franciscan Sisters of Little Falls, Minnesota, is a Roman Catholic Congregation of religious women of the Third Order of St. Francis of Assisi. We dedicate ourselves to living joyfully through the Franciscan values of conversion, contemplation, poverty, and minority.
We are committed to a life of prayer, simple living, and service to those in need. We are dedicated to promoting human rights, building community wherever we live, and healing the sources of Mother Earth's wounds.
Located in the heartland of Minnesota, USA, we number 157 sisters and are joined by over 250 associates. While the majority of our Sisters live and minister in Minnesota, some of us minister in Arizona, California, Illinois, Mississippi, New Mexico, Texas, Wisconsin, Ecuador and Mexico. Our associates are from several U.S. states as well as from Ecuador, Venezuela, and Nicaragua.
COMCAST
In my life I can not imagine a national company with such poor customer service.
Comcast is a total joke in their customer care. If anyone in investor relations would like to speak to me and offer up some suggestions as why they are not the worst company on the planet in customer service please feel free to do so. I am easy to reach.
Comcast is a total joke in their customer care. If anyone in investor relations would like to speak to me and offer up some suggestions as why they are not the worst company on the planet in customer service please feel free to do so. I am easy to reach.
Monday, June 11, 2012
The Huffington Post
Is simply everything that is wrong with journalism, news (t's not news it's all hype) and AOL.
What a joke. Only Steve Case is laughing at this. The one guy who in retrospect fleeced everybody.
Ted Turner, fleeced. Gerald Levin, fleeced. Shareholders, fleeced. Dick Parsons didn't have a clue.
What a joke. Only Steve Case is laughing at this. The one guy who in retrospect fleeced everybody.
Ted Turner, fleeced. Gerald Levin, fleeced. Shareholders, fleeced. Dick Parsons didn't have a clue.
Here are the facts, not the media pundit's BS
For those of you that keep waiting for some giant change-the-world event; I
invite you to re-gear your perspective. Greece has fallen, Portugal has fallen,
Ireland has fallen and now Spain has followed.
These are significant events that are, in fact, changing the world though none has caused Armageddon to date though they may by their aggregate but not singular importance. This is also why Greece is of such key importance; it has nothing to do with staying in or out of the Euro or of the preservation of the European Union as a political entity. That part of the equation is barely relevant. What is of critical importance though is that if they leave the Euro that they will default on some $1.3 trillion in total debt that can be afforded by no one.
That is the rub and you may ignore the rest of the Eurospeak that is bandied about from Brussels to Berlin. A default by Greece will bankrupt and cause re-capitalization at the European Central Bank, it will throw the IMF into a tailspin and it will play havoc with the German Central Bank.
Do not allow yourself to be taken in and mis-directed; this is THE issue and the only issue of real importance.
These are significant events that are, in fact, changing the world though none has caused Armageddon to date though they may by their aggregate but not singular importance. This is also why Greece is of such key importance; it has nothing to do with staying in or out of the Euro or of the preservation of the European Union as a political entity. That part of the equation is barely relevant. What is of critical importance though is that if they leave the Euro that they will default on some $1.3 trillion in total debt that can be afforded by no one.
That is the rub and you may ignore the rest of the Eurospeak that is bandied about from Brussels to Berlin. A default by Greece will bankrupt and cause re-capitalization at the European Central Bank, it will throw the IMF into a tailspin and it will play havoc with the German Central Bank.
Do not allow yourself to be taken in and mis-directed; this is THE issue and the only issue of real importance.
Sunday, June 10, 2012
Malcolm X on the Democrats
Anytime you throw your weight behind a political party that controls two-thirds of the government, and that Party can’t keep the promise that it made to you during election time, and you’re dumb enough to walk around continuing to identify yourself with that Party, you’re not only a chump, but you’re a traitor to your race. - Malcolm X
They try and pass the buck to the Dixiecrats. Now back during the days when you were blind, deaf, and dumb, ignorant, politically immature, naturally you went along with that. But today as your eyes come open, and you develop political maturity, you’re able to see and think for yourself, and you can see that a Dixiecrat is nothing but a Democrat in disguise. - Malcolm X
They’ve been down there four years, and they’re — all other legislation they wanted to bring up they brought it up and gotten it out of the way, and now they bring up you. And now, they bring up you. You put them first, and they put you last, ’cause you’re a chump, a political chump. - Malcolm X
They try and pass the buck to the Dixiecrats. Now back during the days when you were blind, deaf, and dumb, ignorant, politically immature, naturally you went along with that. But today as your eyes come open, and you develop political maturity, you’re able to see and think for yourself, and you can see that a Dixiecrat is nothing but a Democrat in disguise. - Malcolm X
They’ve been down there four years, and they’re — all other legislation they wanted to bring up they brought it up and gotten it out of the way, and now they bring up you. And now, they bring up you. You put them first, and they put you last, ’cause you’re a chump, a political chump. - Malcolm X
Just a little common sense at the SCOTUS
If ObamaCare is so great, why did the politicians that shoved it down your throat exclude themselves from it?
OLD article from the New York Times
One day before he was scheduled to fly 3,000 miles from
Washington to close a deal with a native Alaskan company called the Arctic Slope
Regional Corporation, Andrew Kho, a banker, was told to hold off his trip. Jacob
Adams, Arctic Slope's boss, was out whaling in the icy seas off Alaska's
northern coast.
''Jake had forgotten his cellular phone and couldn't be reached,'' said Mr. Kho, a vice president with the National Cooperative Bank. ''This turned out to be a pretty comical event. I would call every couple of days, and the folks at Arctic Slope would respond that Jake was still out whaling.'' It would be three weeks before he finally flew to Portland, Ore., to approve a $15 million loan for Arctic Slope to buy a maker of plastics parts for high-tech companies.
The episode did more than just expose a cultural divide between the button-down American banking establishment and the rough-and-tumble Alaskan frontier. It also highlighted a quandary that Alaska's 87,000 natives have been wrestling with for 25 years: How does a geographically isolated group, with a heritage of living off the land and sea, figure out the smartest way to invest a multibillion-dollar windfall?
In 1971, the Federal Government ceded $962 million in cash and 44 million acres of Alaskan land, including mineral and timber rights, to the state's native inhabitants to help integrate them into the modern economy. The spoils were spread around 12 regional corporations like Arctic Slope and 220 much smaller village companies, which ever since have paid out a portion of their earnings as annual dividends to their stockholders.
''Jake had forgotten his cellular phone and couldn't be reached,'' said Mr. Kho, a vice president with the National Cooperative Bank. ''This turned out to be a pretty comical event. I would call every couple of days, and the folks at Arctic Slope would respond that Jake was still out whaling.'' It would be three weeks before he finally flew to Portland, Ore., to approve a $15 million loan for Arctic Slope to buy a maker of plastics parts for high-tech companies.
The episode did more than just expose a cultural divide between the button-down American banking establishment and the rough-and-tumble Alaskan frontier. It also highlighted a quandary that Alaska's 87,000 natives have been wrestling with for 25 years: How does a geographically isolated group, with a heritage of living off the land and sea, figure out the smartest way to invest a multibillion-dollar windfall?
In 1971, the Federal Government ceded $962 million in cash and 44 million acres of Alaskan land, including mineral and timber rights, to the state's native inhabitants to help integrate them into the modern economy. The spoils were spread around 12 regional corporations like Arctic Slope and 220 much smaller village companies, which ever since have paid out a portion of their earnings as annual dividends to their stockholders.
The money has been a godsend for some natives in small villages, who are as
likely as not to be in shacks without plumbing. But for the village leaders in
charge of the companies, managing the wealth has been an unending ordeal. They
have had to learn the ins and outs of modern investing, mastering concepts like
poison pills and derivatives. They have had to coax reluctant boards into taking
investment risks. And they have had to weigh their responsibility to make their
portfolios grow against the need to spend much of their profits on social
welfare and against the clamor of their constituents for more cash.
Now, though, their efforts finally seem to be paying off. While they have made missteps, the native corporations are diversifying their portfolios as never before. Many are moving aggressively to profit from the stock market boom. Some are buying major stakes in American corporations, or even starting their own ventures in the Lower 48 states.
The investment record of the Sitnasuak Native Corporation, which represents the 2,400 native Alaskan residents of this Bering Sea hamlet, is a striking example of the progress. You cannot travel from one end to the other of Front Street, Nome's main thoroughfare, without putting a nickel in its coffers. The Sitnasuaks (pronounced SIT-nah-socks) control virtually all the prime businesses, from the supermarket and the Napa auto parts store to the heating and rental-car companies, and own seven apartment buildings.
But like the bosses of more conventional companies, Robbie Fagerstrom, the company's chief executive, is under pressure to increase the return on his shareholders' assets. Mr. Fagerstrom avoided trouble by leading his balky directors into the stock market, amassing a $13 million stock and bond portfolio that last year generated 20 percent of the company's operating profit.
''We wanted part of our assets to bring in a steady income regardless of what was happening with our businesses here,'' said the 49-year-old Mr. Fagerstrom, who grew up in Nome and whose training for the chief executive's post included running his own janitorial business. Now, he says, he wants to move from passive ownership of stocks to active control of businesses in the Lower 48. ''If we could get into building construction or rental management, it would make us less dependent on our local economy,'' he said.
Yet, the Sitnasuaks would have missed out on the current bull market had it not been for Mr. Fagerstrom's determination to beat down his directors' resistance to opening a stock portfolio. Because they complained they could not fathom Wall Street lingo, he talked them into taking a course on reading financial reports. Then he waited three years as analysts from the Dean Witter Reynolds Anchorage office molded their class lectures into the right mix of the Harvard Business School and Field & Stream magazine.
''You have to put it in terms they can understand,'' Keith Rivera, senior vice president with Dean Witter Reynolds in Anchorage, said of his clients. ''For example, if they were to go out and experience bad storms while fishing, they wouldn't always turn around and go back. They stick it out.''
Today, the Sitnasuaks' portfolio consists mostly of brand names, with AT&T, Procter & Gamble, Eastman Kodak and Hewlett Packard topping the list. Their directors, who remain very conservative, not only continue to take investment classes, they alsofeel confident enough to help Mr. Rivera with an occasional stock suggestion. Through the end of September, their stock picks were up 21.8 percent for the year.
''Over the next few years, we really hope to increase the amount of money we have in the market,'' Mr. Fagerstrom said. ''It's crucial that it generate a steady income for us.''
Other native Alaskan companies are also spreading their investments ''Outside'' -- local lingo for the 48 contiguous states. Among them are these examples:
*Cook Inlet Region Inc., based on Alaska's southern central coast, recently formed a joint venture with BellSouth of Atlanta to peddle cellular phones and pagers in the Carolinas. CIRI also acquired and later sold majority positions in network television affiliates in Hartford and Nashville, and it plans to buy several Southwestern resort properties and a manufacturing company in Washington later this year. More than half of the company's $56.65 million in operating earnings last year came from its broadcasting and communications holdings in the Lower 48. By contrast, it earned just $2.55 million, after distributions, from oil and gas production and mining.
*Sealaska, a timber-rich native corporation in Alaska's southeastern tip, plans to buy three manufacturing companies in the Lower 48 this year to position itself as a parts supplier to I.B.M. and Motorola Inc. It also has $100 million in cash earmarked for additional acquisitions.
*The Nana Regional Corporation, whose shareholders are primarily whale and seal hunters along the north Bering Sea, signed up with Marriott International Inc. last year to provide housekeeping and food services to Marriott hotels in Alaska and, potentially, in other states. The contract yielded $951,000 in profits last year, almost half the company's total. ''The partnership is generating a lot of cash,'' Shelby Stassy, Nana Regional's vice president for finance, said.
Alaska's native corporations are using several strategies in their heady migration south. The largest hire investment firms to seek out potential acquisitions. CIRI has five full-time executives who only peruse listings of resort properties for sale. Leo Barlow, the chief executive of Sealaska, recently began surfing the Internet for possible deals. But the most common way has been to set up a minority contracting company eligible for jobs set aside by the Government for economically disadvantaged ethnic groups.
Most of the contracts involve grueling work, from sweeping out military bases to refueling jet fighters, but the pay is good. Chugach Alaska, a regional corporation near Prince William Sound, went bankrupt in 1991 but bounded back by landing $300 million in minority contracts with the Army. ''It's been absolutely amazing how we were able to turn ourselves around,'' Michael Brown, Chugach Alaska's chief executive, said. ''The key is that we diversified out of Alaska to stretch from Washington to Honolulu.''
To be sure, some investments have misfired. The Bristol Bay Native Corporation, based along Alaska's southwestern coast, snapped up a 10 percent share in the United Bank of Alaska in the late 1970's. But hammered by bad real estate loans, the bank collapsed in 1986, leaving Bristol Bay with a $2 million loss.
And many companies continue to be plagued by the inexperience of their managers, many of whom have never worked in companies with more than 30 employees. When the Aleut and Nana corporations started a minority contracting subsidiary last year in Charlotte, N.C., for example, they could not find any of their colleagues to accept a top management position at the new venture. The job remains unfilled.
And the Aleut Corporation, hobbled by its board's timidity, allocated only half of its $3.7 million portfolio last year to stocks, with the rest tied up in Treasury and municipal bonds. The portfolio eked out an anemic 7.8 percent gain for the fiscal year ended March, compared with 29 percent for the Standard & Poor's 500-stock index. The Aleuts have since raised their stock holdings in hopes of notching a higher return.
''At a native corporation, any sort of decision -- including investing -- requires an awful lot of hand holding,'' said Dean Parisian, president of Native American Advisors Inc., a money-management firm in Alpharetta, Ga., which advises Indians and Alaska natives. ''Very few of them have college degrees. Most don't know the difference between a preferred stock and livestock,'' neither of which figures much in life in the icy north, he adds. ''That takes some time to overcome.''
Native corporations also face pressure from shareholders to deliver quick cash hits rather than long-term growth. When CIRI's lines of businesses performed exceptionally well last year, shareholders were quick to ask for a greater dividend. CIRI obliged, shelling out $63 million. Stockholders who owned 100 shares, the typical amount, received $10,112.
Further draining profits, companies spend huge amounts on social programs like scholarships and alcohol rehabilitation. Even in bad years, many native Alaskans demand their dividend checks. Especially for those who live in remote villages and get most of their food from hunting and fishing, the money can make the difference between near squalor and reasonable comfort.
''We can live without the dividends,'' said Percy Nayokpuk, who sells ivory necklaces to tourists in the coastal village of Shishmaref, near the Arctic Circle. ''But that extra money makes a tremendous difference in what you can do to improve your house or buy clothes for your children.''
Now, though, their efforts finally seem to be paying off. While they have made missteps, the native corporations are diversifying their portfolios as never before. Many are moving aggressively to profit from the stock market boom. Some are buying major stakes in American corporations, or even starting their own ventures in the Lower 48 states.
The investment record of the Sitnasuak Native Corporation, which represents the 2,400 native Alaskan residents of this Bering Sea hamlet, is a striking example of the progress. You cannot travel from one end to the other of Front Street, Nome's main thoroughfare, without putting a nickel in its coffers. The Sitnasuaks (pronounced SIT-nah-socks) control virtually all the prime businesses, from the supermarket and the Napa auto parts store to the heating and rental-car companies, and own seven apartment buildings.
But like the bosses of more conventional companies, Robbie Fagerstrom, the company's chief executive, is under pressure to increase the return on his shareholders' assets. Mr. Fagerstrom avoided trouble by leading his balky directors into the stock market, amassing a $13 million stock and bond portfolio that last year generated 20 percent of the company's operating profit.
''We wanted part of our assets to bring in a steady income regardless of what was happening with our businesses here,'' said the 49-year-old Mr. Fagerstrom, who grew up in Nome and whose training for the chief executive's post included running his own janitorial business. Now, he says, he wants to move from passive ownership of stocks to active control of businesses in the Lower 48. ''If we could get into building construction or rental management, it would make us less dependent on our local economy,'' he said.
Yet, the Sitnasuaks would have missed out on the current bull market had it not been for Mr. Fagerstrom's determination to beat down his directors' resistance to opening a stock portfolio. Because they complained they could not fathom Wall Street lingo, he talked them into taking a course on reading financial reports. Then he waited three years as analysts from the Dean Witter Reynolds Anchorage office molded their class lectures into the right mix of the Harvard Business School and Field & Stream magazine.
''You have to put it in terms they can understand,'' Keith Rivera, senior vice president with Dean Witter Reynolds in Anchorage, said of his clients. ''For example, if they were to go out and experience bad storms while fishing, they wouldn't always turn around and go back. They stick it out.''
Today, the Sitnasuaks' portfolio consists mostly of brand names, with AT&T, Procter & Gamble, Eastman Kodak and Hewlett Packard topping the list. Their directors, who remain very conservative, not only continue to take investment classes, they alsofeel confident enough to help Mr. Rivera with an occasional stock suggestion. Through the end of September, their stock picks were up 21.8 percent for the year.
''Over the next few years, we really hope to increase the amount of money we have in the market,'' Mr. Fagerstrom said. ''It's crucial that it generate a steady income for us.''
Other native Alaskan companies are also spreading their investments ''Outside'' -- local lingo for the 48 contiguous states. Among them are these examples:
*Cook Inlet Region Inc., based on Alaska's southern central coast, recently formed a joint venture with BellSouth of Atlanta to peddle cellular phones and pagers in the Carolinas. CIRI also acquired and later sold majority positions in network television affiliates in Hartford and Nashville, and it plans to buy several Southwestern resort properties and a manufacturing company in Washington later this year. More than half of the company's $56.65 million in operating earnings last year came from its broadcasting and communications holdings in the Lower 48. By contrast, it earned just $2.55 million, after distributions, from oil and gas production and mining.
*Sealaska, a timber-rich native corporation in Alaska's southeastern tip, plans to buy three manufacturing companies in the Lower 48 this year to position itself as a parts supplier to I.B.M. and Motorola Inc. It also has $100 million in cash earmarked for additional acquisitions.
*The Nana Regional Corporation, whose shareholders are primarily whale and seal hunters along the north Bering Sea, signed up with Marriott International Inc. last year to provide housekeeping and food services to Marriott hotels in Alaska and, potentially, in other states. The contract yielded $951,000 in profits last year, almost half the company's total. ''The partnership is generating a lot of cash,'' Shelby Stassy, Nana Regional's vice president for finance, said.
Alaska's native corporations are using several strategies in their heady migration south. The largest hire investment firms to seek out potential acquisitions. CIRI has five full-time executives who only peruse listings of resort properties for sale. Leo Barlow, the chief executive of Sealaska, recently began surfing the Internet for possible deals. But the most common way has been to set up a minority contracting company eligible for jobs set aside by the Government for economically disadvantaged ethnic groups.
Most of the contracts involve grueling work, from sweeping out military bases to refueling jet fighters, but the pay is good. Chugach Alaska, a regional corporation near Prince William Sound, went bankrupt in 1991 but bounded back by landing $300 million in minority contracts with the Army. ''It's been absolutely amazing how we were able to turn ourselves around,'' Michael Brown, Chugach Alaska's chief executive, said. ''The key is that we diversified out of Alaska to stretch from Washington to Honolulu.''
To be sure, some investments have misfired. The Bristol Bay Native Corporation, based along Alaska's southwestern coast, snapped up a 10 percent share in the United Bank of Alaska in the late 1970's. But hammered by bad real estate loans, the bank collapsed in 1986, leaving Bristol Bay with a $2 million loss.
And many companies continue to be plagued by the inexperience of their managers, many of whom have never worked in companies with more than 30 employees. When the Aleut and Nana corporations started a minority contracting subsidiary last year in Charlotte, N.C., for example, they could not find any of their colleagues to accept a top management position at the new venture. The job remains unfilled.
And the Aleut Corporation, hobbled by its board's timidity, allocated only half of its $3.7 million portfolio last year to stocks, with the rest tied up in Treasury and municipal bonds. The portfolio eked out an anemic 7.8 percent gain for the fiscal year ended March, compared with 29 percent for the Standard & Poor's 500-stock index. The Aleuts have since raised their stock holdings in hopes of notching a higher return.
''At a native corporation, any sort of decision -- including investing -- requires an awful lot of hand holding,'' said Dean Parisian, president of Native American Advisors Inc., a money-management firm in Alpharetta, Ga., which advises Indians and Alaska natives. ''Very few of them have college degrees. Most don't know the difference between a preferred stock and livestock,'' neither of which figures much in life in the icy north, he adds. ''That takes some time to overcome.''
Native corporations also face pressure from shareholders to deliver quick cash hits rather than long-term growth. When CIRI's lines of businesses performed exceptionally well last year, shareholders were quick to ask for a greater dividend. CIRI obliged, shelling out $63 million. Stockholders who owned 100 shares, the typical amount, received $10,112.
Further draining profits, companies spend huge amounts on social programs like scholarships and alcohol rehabilitation. Even in bad years, many native Alaskans demand their dividend checks. Especially for those who live in remote villages and get most of their food from hunting and fishing, the money can make the difference between near squalor and reasonable comfort.
''We can live without the dividends,'' said Percy Nayokpuk, who sells ivory necklaces to tourists in the coastal village of Shishmaref, near the Arctic Circle. ''But that extra money makes a tremendous difference in what you can do to improve your house or buy clothes for your children.''
Saturday, June 09, 2012
June 9, 2011
It's been a year. Dad has been "with" me every day since his passing. So
many mornings, sitting to sip a black java I want to pick up the phone and call
my Dad. Like I did most mornings for 20 some years. It was your time Dad.
You knew it. You shared your thoughts and your love to the end. For Mom,
for your daughter, Nancy, for your grandchildren. We were blessed to have you
for so many years.
As a husband and a father, from where I sit, it was a job well done. I
love you Dad.
I miss you.
Friday, June 08, 2012
Can you recover damages for sheer stupidity?
These people said UBS wanted 1
million shares, but when it did not receive confirmations, it repeated the order
multiple times and was left with much more than it intended.
"Given the size of our U.S. equity
business and our role as a major market maker, UBS was affected by these issues,
as we believe other market participants may have been," UBS said in a written
statement.
"Consistent with our policy on
market comments on our positions or intra-quarter performance, we are not
disclosing the amount of the loss, which is not material to UBS," it continued.
"We are continuing to consider avenues to recover our losses in this matter, but
have not yet taken legal action."
$15,734,596,578,458.59.
That was the amount of the US Federal debt as of Wednesday.
Think about the ramifications of higher interest rates in funding that debt. Today we are increasing that amount by $3 million each and every minute of the day.
Think about the ramifications of higher interest rates in funding that debt. Today we are increasing that amount by $3 million each and every minute of the day.
Thursday, June 07, 2012
Harvey Pitt nonsense.........
Harvey Pitt calling Facebook (the IPO) one of the "biggest and best" was utter comedy.
It is not a good company to own. The stock price tells you so. Single digits are coming.
It is not a good company to own. The stock price tells you so. Single digits are coming.
Your government at work.............LOL
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It's coming and they won't turn the light on
12 basis points. A blip in the trading day. A fat finger trade away. That is how many basis points a long dated US Treasury bond needs to move down in price to LOSE ONE YEARS INCOME derived from that bond.
There is going to be some real carnage in the bond market. It will make the 1986 bond market break look like a walk in the park. Bank on it.
There is going to be some real carnage in the bond market. It will make the 1986 bond market break look like a walk in the park. Bank on it.