Monday, May 4, 2009
Google upsets the Korean Government
Just heard a very interesting talk by Nicole Wong, Associate General Counsel for Products and Intellectual Property at Google. She described the request by the Korean government for specific names of users of KR.Youtube.Com. Google, recognizing the potential impact on free speech, chose instead to prevent any additional uploads or comments on the subdomain. The company expects some repercussions from the decision.
Friday, January 30, 2009
Tearing down the border wall.
Fantastic video treating the US - Mexican border wall with artistic irreverence.
More info on this amazing project here.
More info on this amazing project here.
Saturday, January 24, 2009
The End of Gitmo and the stroke of a pen
How is it that our constitution, which supposedly denuded this country of kings, still allows a president to first create a prison and take one away? I believe that the closing of the prison and restoring habeas corpus is absolutely in keeping with the constitution. But how extraordinary that ONE MAN makes the difference on this issue.
Monday, December 15, 2008
Wednesday, October 1, 2008
Is London the REAL SOURCE of the economic meltdown mess?
I spent the weekend arguing that the decline in housing prices is not the problem with our economy. It is the crazy way the financial markets tried to monetize mortgages. When cracks in the schemes of CDOs, SIVs and credit default swaps started appearing in 2005, what did banks do? They doubled down – that’s when the subprime mortgage lending skyrocketed.
Fortunately, Gretchen Morgenson came to my rescue and laid out that
exact argument on the front page of the Sunday New York Times. She wrote: “Although America’s housing collapse is often cited as having caused the crisis, the system was vulnerable because of intricate financial contracts known as credit derivatives, which insure debt holders against default. They are fashioned privately and beyond the ken of regulators — sometimes even beyond the understanding of executives peddling them.”
I would also suggest that London may well turn out to be the epicenter of the storm. It was the where the key inventors and promulgators of these schemes resided. These handful of British elite created the shenanigans that enabled the few to become so very rich that every Wall Street executive was slobbering to get in on the deals.
Take for example, Nicholas Sossidis and Stephen Partidge-Hicks. These two sold the world the idea of the Structured Investment Vehicles (SIV), and since they originated the idea while they were at Citibank, they convinced everyone that only their office knew how to set them up because they were so complicated. They even called their company Gordian Knot, an extraordinary joke turning out to be at the taxpayers’ expense. Their efforts insured BILLIONS of dollars poured into London and a renaissance in the London markets based on a house of cards began. (See: Gordian Knot: How London Created a Snarl In Global Markets SIVs Fueled Debt Boom, But Now Banks Scramble To Prop Up the Funds By Carrick Mollenkamp, Deborah Solomon, Robin Sidel and Valerie Bauerlein, WSJ | 18 October 2007)
Then we get Cassano at AIG who headed a relatively small office in London but, according to Morgenson, moved his office from the relatively vanilla deals involving the overnight rate banks charged each other for borrowing money into the mad mad mad money world of credit default swaps. In the past few years he and everyone in his office got crazy rich. And now his small office has brought down one of the largest companies in the world.
And take note that the LIBOR rate – London Interbank Offered Rate – which sets the interest rate for many adjustable rates loans in America, is regulated by just TWO Londoners as reported by Donald MacKenzie in the London Review of Books “On the Importance of LIBOR”. (There are some back up folks ready to step in due to an
emergency but these two individuals were considered too critical to the world’s banking operations to actually be named by Mackenzie.) The LIBOR rate is set when banks call in to say what it would cost for their institution to borrow money from other banks, a self-reporting system that can readily be abused.
In fact, a few months back the Wall Street Journal made some nasty claims about what was going on behind the LIBOR scenes, noting that the cost of credit between banks was skyrocketing but it wasn’t showing up in the LIBOR rate. The idea was that banks were covering up how bad things really were.
While MacKenzie doubts the WSJ position, I remain suspicious. In a story last week, the New York Times reports that “The chairman of the Securities and Exchange Commission, a longtime proponent of deregulation, acknowledged on Friday that failures in a voluntary supervision program for Wall Street’s largest investment banks had contributed to the global financial crisis, and he abruptly shut the program down.” It makes me wonder whether we are seeing the writing on the wall for any similar self-reporting system in the UK. I certainly don’t believe that the British financial industry is any more honest than the American one.
Finally, I have little doubt that these all too critical Libor lynchpins, Messrs. Cassano, Sossidis and Patridge-Hicks were all lunching. (Why don’t we have Hello! Magazine snapping near naked shots of these fellow vacationing together?) These were the top players working a tiny field of business in a very insular country with an already exclusive caste system that America chose to overthrew in our revolution.
While clearly the U.S. investment banks and their many key executives played with fire and got burnt badly, I wonder if when the dust settles we will look to London as the epicenter of so much of the mess. After all, there is also a cultural issue here. Being married to a Brit, I am always amazed by the credibility Americans give to the English. The snottier they are, the more godlike we treat them. Is this one reason why they led us by the nose into investing into their dressed-up dung?
Fortunately, Gretchen Morgenson came to my rescue and laid out that
exact argument on the front page of the Sunday New York Times. She wrote: “Although America’s housing collapse is often cited as having caused the crisis, the system was vulnerable because of intricate financial contracts known as credit derivatives, which insure debt holders against default. They are fashioned privately and beyond the ken of regulators — sometimes even beyond the understanding of executives peddling them.”
I would also suggest that London may well turn out to be the epicenter of the storm. It was the where the key inventors and promulgators of these schemes resided. These handful of British elite created the shenanigans that enabled the few to become so very rich that every Wall Street executive was slobbering to get in on the deals.
Take for example, Nicholas Sossidis and Stephen Partidge-Hicks. These two sold the world the idea of the Structured Investment Vehicles (SIV), and since they originated the idea while they were at Citibank, they convinced everyone that only their office knew how to set them up because they were so complicated. They even called their company Gordian Knot, an extraordinary joke turning out to be at the taxpayers’ expense. Their efforts insured BILLIONS of dollars poured into London and a renaissance in the London markets based on a house of cards began. (See: Gordian Knot: How London Created a Snarl In Global Markets SIVs Fueled Debt Boom, But Now Banks Scramble To Prop Up the Funds By Carrick Mollenkamp, Deborah Solomon, Robin Sidel and Valerie Bauerlein, WSJ | 18 October 2007)
Then we get Cassano at AIG who headed a relatively small office in London but, according to Morgenson, moved his office from the relatively vanilla deals involving the overnight rate banks charged each other for borrowing money into the mad mad mad money world of credit default swaps. In the past few years he and everyone in his office got crazy rich. And now his small office has brought down one of the largest companies in the world.
And take note that the LIBOR rate – London Interbank Offered Rate – which sets the interest rate for many adjustable rates loans in America, is regulated by just TWO Londoners as reported by Donald MacKenzie in the London Review of Books “On the Importance of LIBOR”. (There are some back up folks ready to step in due to an
emergency but these two individuals were considered too critical to the world’s banking operations to actually be named by Mackenzie.) The LIBOR rate is set when banks call in to say what it would cost for their institution to borrow money from other banks, a self-reporting system that can readily be abused.
In fact, a few months back the Wall Street Journal made some nasty claims about what was going on behind the LIBOR scenes, noting that the cost of credit between banks was skyrocketing but it wasn’t showing up in the LIBOR rate. The idea was that banks were covering up how bad things really were.
While MacKenzie doubts the WSJ position, I remain suspicious. In a story last week, the New York Times reports that “The chairman of the Securities and Exchange Commission, a longtime proponent of deregulation, acknowledged on Friday that failures in a voluntary supervision program for Wall Street’s largest investment banks had contributed to the global financial crisis, and he abruptly shut the program down.” It makes me wonder whether we are seeing the writing on the wall for any similar self-reporting system in the UK. I certainly don’t believe that the British financial industry is any more honest than the American one.
Finally, I have little doubt that these all too critical Libor lynchpins, Messrs. Cassano, Sossidis and Patridge-Hicks were all lunching. (Why don’t we have Hello! Magazine snapping near naked shots of these fellow vacationing together?) These were the top players working a tiny field of business in a very insular country with an already exclusive caste system that America chose to overthrew in our revolution.
While clearly the U.S. investment banks and their many key executives played with fire and got burnt badly, I wonder if when the dust settles we will look to London as the epicenter of so much of the mess. After all, there is also a cultural issue here. Being married to a Brit, I am always amazed by the credibility Americans give to the English. The snottier they are, the more godlike we treat them. Is this one reason why they led us by the nose into investing into their dressed-up dung?
Saturday, September 20, 2008
Why are people blaming the poor for our financial meltdown?
A few days ago when my uncle was over for dinner, he blamed the country's economic woes on people taking out housing loans they couldn't afford. The implication was that if American's had been more fiscally responsible, we wouldn't be facing such problems. I am starting to read it in the New York Times, and hear it on the street. Perhaps the approach might be slightly more tactful: If Washington hadn't pushed an ownership society, none of this would have happened.
Are they kidding? Peddling loans to the uneducated and convincing them they could GET RICH too was every day business. (I seem to recall being taught in high school history that it wasn't the fault of the poor for the spiraling easy credit mantras of the 1920's. It was the fault of the lending machine.)
Take the broker from WaMu, RIP. We signed up for a home equity loan in 2004 when my husband was a PhD candidate and I was making minimal money on documentary films. We told no lies on our application. But that didn't stop the broker from HELPING US. In fact, when we walked into the branch to sign our paperwork, he had DOUBLED what we had asked for and was waiting for us to agree. Ouch. My husband and I shook our heads in disbelief - we we're the kind of people banks treated suspiciously. Something was really really wrong here. We heard the bells a-tolling for old WaMu.
It seemed as if money-crazy psychology had clouded all reason. Take for example, the NYTimes July 2007 magazine article "The New Gilded Age," with the picture of a golden manhole cover on the front, published just weeks before the markets started to unravel. Surely editors should have been able to find more voices to debate such excess but criticism was overwhelmed by Wall Street's pumped up mentality.
And the irony was that within that same week, the paper had a story about the terrible conditions of workers in foreign companies making those New York manhole covers.
Saturday, April 12, 2008
FedEx Fast One
Chalk one up for Federal Express. FedEx has long enjoyed excellent public relations as noted by its inclusion in The Value Profit Chain: Treat Employees Like Customers and Customers Like Employees, a book written by three Harvard Business School professors . The book profiles companies who invest in employees and reap benefits from that policy in return. In FedEx’s case, those employees, especially the delivery drivers, have a constant interaction with the public, making their behavior critical to the company’s image and it would seem a no-brainer for FedEx to keep those employees happy. This past March, one of those drivers did the company a favor in return through an extraordinary act of heroism. [BLOGGERS PHOTO POSTING IS DOWN SO I HAVE TO USE LINKS]
A month later, the photo turned up in a full-length ad in newspapers across the country and on a “FedEx Stories” Flash-based website , as part of a promotional campaign commending driver Jay McMullin specifically and FedEx employees in general. However, when the campaign went public, the second man climbing from the black car was airbrushed from the scene despite the fact that many news agencies had carried the photo right after the actual event in its original. The appearance of the altered image and the orchestrated publicity wave occurred just days before a very negative story about FedEx appeared in the New York Times.
The emotional nature of the ad was in direct contrast to the New York Times business section piece describing how badly Roadway Package Systems, a FedEx Ground company, treats its employees (Greenhouse 2008) . The article detailed how FedEx Ground forces workers to act as “independent contractors,” pay for their own trucks, offers no benefits, and recently fired a ten-year employee who couldn’t keep her routes because she’d been diagnosed with cancer. The company is already facing serious IRS penalties for treating these employees as contract workers when in fact they work in the same capacity as normal staff. Not surprisingly, those drivers have little of the regular contact with the public as uniformed FedEx drivers and the heroic act of one those uniformed drivers caught by a news reporter will almost certainly overshadow the New York Times piece, especially given the alternative – a photograph of the sickened and helpless cancer victim.
Given the delay between the event and the promotional campaign, it is difficult to believe that the photo of Jay McMullin was not used a defensive measure against the impending New York Times assault. A blurb on the incident and quote from McMullin, who did little talking to the press, was placed strategically on the FedEx web-based “Newsroom” :
FedEx Express courier Jay McMullin recently made the quick decision to help a fellow motorist in need. He has made the company very proud for his courageous action. Mr. McMullin issued the following statement:
“The response to the photo of Odell Bunch’s rescue has been humbling and overwhelming. I sincerely appreciate the kind notes, email, phone calls and general interest in my well-being. While I am honored by the attention, I only did what any of my fellow FedEx co-workers would have done.”
A month later, the photo turned up in a full-length ad in newspapers across the country and on a “FedEx Stories” Flash-based website , as part of a promotional campaign commending driver Jay McMullin specifically and FedEx employees in general. However, when the campaign went public, the second man climbing from the black car was airbrushed from the scene despite the fact that many news agencies had carried the photo right after the actual event in its original. The appearance of the altered image and the orchestrated publicity wave occurred just days before a very negative story about FedEx appeared in the New York Times.
The emotional nature of the ad was in direct contrast to the New York Times business section piece describing how badly Roadway Package Systems, a FedEx Ground company, treats its employees (Greenhouse 2008) . The article detailed how FedEx Ground forces workers to act as “independent contractors,” pay for their own trucks, offers no benefits, and recently fired a ten-year employee who couldn’t keep her routes because she’d been diagnosed with cancer. The company is already facing serious IRS penalties for treating these employees as contract workers when in fact they work in the same capacity as normal staff. Not surprisingly, those drivers have little of the regular contact with the public as uniformed FedEx drivers and the heroic act of one those uniformed drivers caught by a news reporter will almost certainly overshadow the New York Times piece, especially given the alternative – a photograph of the sickened and helpless cancer victim.
Given the delay between the event and the promotional campaign, it is difficult to believe that the photo of Jay McMullin was not used a defensive measure against the impending New York Times assault. A blurb on the incident and quote from McMullin, who did little talking to the press, was placed strategically on the FedEx web-based “Newsroom” :
FedEx Express courier Jay McMullin recently made the quick decision to help a fellow motorist in need. He has made the company very proud for his courageous action. Mr. McMullin issued the following statement:
“The response to the photo of Odell Bunch’s rescue has been humbling and overwhelming. I sincerely appreciate the kind notes, email, phone calls and general interest in my well-being. While I am honored by the attention, I only did what any of my fellow FedEx co-workers would have done.”
Subscribe to:
Posts (Atom)