And so why should we find it even remotely alarming that Rep. Edolphus Towns (D-NY) would be a member of the VIP lending program at Countrywide? (If, in fact, he is). He seems to be:
A powerful House Democrat who has turned down a Republican’s call to subpoena records of a mortgage program at Countrywide Financial Corp. received two home loans from the lender.
Some information in the lawmaker’s mortgage documents raises the possibility they were made through the program, which provided loans to public figures and other favored borrowers often at lower interest rates or with lower origination fees than were available to the general public.
Why all the fuss? After all, given the importance of the American Dream Of Home Ownership, why would we forbid any medium of exchange at all if it were to permit just one family more the roof of a McMansion over their heads? That a buyer may lack the funds is a matter of no import whatsoever. That a buyer may possess funds in abundance is, equally, a matter of no import whatsoever. How many trips to Vegas, how many long Florida weekends, how many championship sporting events, how many state of the art home entertainment systems must the buyer give up to enjoy the Dream? Will we not permit a humble public servant to trade the assets of access and committee votes to give his family The Dream?
Of course we will.
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With the decline in global government tax receipts severe enough for regulators to get serious about reducing your options for keeping money away from the tax man, a new leader in tax games is emerging. The country with one of the highest tax rates in the world, Denmark, has seen an exponential rise recently in those looking to make their respective governments earn their tax dollars by catching them. Even though Nordic countries have been supportive of the ongoing clamp down, a local tax accountant, Christen Amby, highlighted the ease of stashing cash in the home of butter cookies.
“It’s my impression that Denmark has become a popular way station for tax evasion – partly because it’s easy to set up a business and also because we don’t have a practice of controlling who the final receiver of funds is”
So by making some slight modifications to the Swiss flag, the tax haven torch is passed to another land of red and white.
From the same country that brought you the heated debate about what the definition of is is, the government is now attempting to clarify what the word fiduciary should mean to brokers and financial advisors. Should SIFMA’s current call for a single fiduciary standard across brokers and financial advisors superseding state law come to fruition, some in the investment advisory world worry about opening the floodgates for what Wall Street can get away with.
Ron Rhoades, chief compliance officer at Joseph Capital Management LLC, an investment advisory firm in Hernando, Florida, called the Sifma statement a “wolf in sheep’s clothing.”
“Under one interpretation of Sifma’s proposal, Wall Street firms could have their customers sign away the fiduciary standards of conduct by simply signing a lengthy, incomprehensible, multipage, small-print agreement,”
And with that the investment advisory firm took an important step closer to understanding a critical piece of the Wall St. business model.
Financial Planners Say Fiduciary Debate May Favor Brokers [Bloomberg]
Imagine for a moment, on some overlooked island chain in the heart of the South Pacific, an otherwise obscure tribe has lived quietly for hundreds of years. Suppose further that their culture happens to have 27 different words for the concept of “Irony,” each possessed of a fantastically unique and nuanced umbra of distinctive interpretation. Finally, assume that these words managed somehow to incorporate themselves into the English language gracefully. Even with this set of facts, we would still possess a woefully insufficient literary-ammunition dump to fully do justice to this story:
Ben Stein Fired From New York Times For Ethics Violation Related To Credit Report Bait And Switch Endorsement
Gawker has the Gray Lady’s response via Catherin Mathis:
Ben Stein’s fine work for us as a columnist for Sunday Business had to end, we told him, after we learned that he had become a commercial spokesman for FreeScore, a financial services company. Ben didn’t understand when he signed on with FreeScore that this might pose a potential conflict for him as a contributing columnist for the Times, because he hadn’t written about credit scores or this company. But, we decided that being a commercial spokesman for FreeScore while writing his column wouldn’t be appropriate.
Pitchman Ben Stein Gets Economist Ben Stein Fired at the New York Times [Gawker]
The never-ending story known as who knew what and when at BAC and ML is set for another chapter. Figuring that not enough taxpayer money had already been dedicated to the subject, the Chair of the House Committee on Oversight and Government Reform, Rep. Edolphus Towns, has sent a love letter to Ken Lewis asking him to kindly turn over every single piece of paper that mentions ML losses. No doubt Kenny boy has already filed that letter in the same place as Andrew Cuomo’s earlier poems on bonuses but if history is any guide, this effort still has miles to go before it meets its least cost-effective end. The economy must really be out of the woods if lawmakers have nothing better to do than beat the original dead horse when a settlement for anything they turn up has very likely already been reached and just waiting around for an announcement date.
Oh For The Love Of Love (DealBreaker)
Yesterday on one of Greg’s posts I noticed a little calf showing, a snip here or there, perhaps even some honest flirting (one can’t be sure where hatred and horny meet with this crowd). We care about our readers; we want you to be happy.It’s just what we do, people. That said, after speaking with InvestorCluzo (who has been a remarkably good sport about this), if Tax Chick can summon the gumption to accompany that mouth we’d be happy to arrange for the two of you lovebirds to shake hands.
AIG Reports First Profit In Seven Quarters (Bloomberg)
AIG has managed to pull its head from its ass for at least a quarter, as they report second quarter income of $1.82B or $2.30 a share.
RBS Posts $7.52B Loss (Bloomberg)
“”There is every sign that our financial performance over the next two years, at a group level, will be poor due to the severe economic downturn in 2008 and 2009 and consequent impact on impairments and funding costs,” Chief Executive Officer Stephen Hester said today in a statement.”
Small Banks Picking Up Talent (WSJ)
Regionals are dipping into the talent pool of the larger firms, though the article doesn’t expressly define what positions these finance geniuses are interested in. Is this a sign of times to come (people looking for the stability of smaller/less risky operations), or of desperation?
President Obama Not Saying Shit About Replacing Bernanke (Reuters)
Bernanke’s term expires January 31st, 2010; as is we don’t have any clue as to whether or not the President will be stepping in to replace him. There’s a good point to be made in cutting him down now, though – you don’t give him the authority or respect that tenure demands.
ProShare Getting Sued Over Leveraged ETF (WSJ)
It’s a failure to disclose risk suit, which is comical on so many levels. Labaton Sucharow LLP is leading the charge.
Citigroup Considers Options With Philbro (NYT)
“After putting out feelers to sell its Phibro commodities business, including a brief talk with the billionaire investor Warren E. Buffett, Citigroup is considering a variety of options. Among them is a deal that would give control of the unit to Mr. Hall, the energy trader who runs Phibro, two people close to the negotiations said.”
NYT Hires Goldman To Explore Boston Globe Sale (Reuters via CNN)
“The New York Times Co has enlisted Goldman Sachs to explore a sale of its New England Media Group, which owns the 137-year-old Boston Globe and other media assets.”
Bankers Beat Odds In Toxic Pay Plan (WSJ)
Despite its detractors, it turns out the CS plan to pay bankers with bonds hasn’t been all that bad.
Fannie Mae is seeking an additional $10.7 billion in government aid after posting another massive quarterly loss as the taxpayer bill from the housing market bust keeps growing.
Fannie Mae seeks $10.7B in US aid after 2Q loss [Associated Press]
Obviously, bold displays of ostentatious wealth, power, elitism, or exclusivity seem misplaced in the present environment. So much so that one wonders if, some years hence, we might not look back on this period as the “anti-too-big-to-fail” period. Or the “anti-big” period. Or the “anti-too” period. Or just a reactionary spasm of frothing (and highly communicable) anti-crowd rabidity.
Attacks on Goldman Sachs are routine (and quite a bit more potent than in prior years). Warren Buffett is a cheater (haven’t you heard?) Institutions from the Federal Reserve to the Treasury to the SEC have been literally run through with vicious, biting (and potentially well-deserved) criticism from all corners. Just watching these goings on, you would think that, after rising above a certain strata, any inclination towards self-preservation would repress a lust for fame. Or any notice at all. Or… maybe not:
Harvard University, the world’s richest school, licensed its name to a maker of designer clothes to take advantage of a taste for seersucker, khakis, loafers and other “preppy” attire.
The clothing line, labeled Harvard Yard, will be made by New York-based Wearwolf Group Ltd., which licensed the Cambridge, Massachusetts, school’s name through its Verus Group subsidiary, Verus said today in an e-mailed statement. The financial terms weren’t disclosed.
Well, at least they got this last part right. Regardless, we aren’t so sure the timing was well played here…
“Harvard is the ideal — the pinnacle,” Wolf said. “When you think of modern prep, you think of New England and the Northeast. You think campus, quads, and you think Harvard.”
…and Wolf obviously needs to get out more.
Harvard Licenses Clothing Line Amid ‘Preppy’ Upswing [Bloomberg]
Earlier: My Harvard Tie
The former US Equity Strategist at JP Morgan Asset Management who left JPM in 2007 to assume the reins as Chief Investment Strategist at Bear, Jonathan Golub, has reportedly abandoned his most recent port of call, ING Investment Management, after roughly 8 weeks of service. Having said “This is an exceptional time to join ING” in a June 3rd press release, DB is hearing that Golub apparently thought last week was an exceptional time to leave ING.
Profiling Abby Joseph “The Oracle” Cohen’s fall out of the financial cheerleading tree, CNBC’s JeeYeon Park managed to hit (and break) every metaphoric branch on the way down. Between the two of them, no rhetorical equity booster is left unbowed, including:
“…held up during the difficult portion of the recession.” (It being all behind us now, this is clearly a safe observation, right?)
“…new bull market.” (a/k/a “It’s different this time.” a/k/a “A new paradigm.”)
“…stocks should likely perform better than bonds.” (Should likely).
“…not only good, but fabulous by comparison.” (Thanks for asking!)
“…staircase pattern.” (Stairway to heaven, one assumes).
“…job losses were slowing.” (The precious second derivative decline. Thank the maker!)
“…unlikely to turn all at one [sic] or on a dime.” (Bit dangerous to put Titanic references in an otherwise positive pump job, but we digress…)
Being the aesthetics that we know you to be, we’ve decided to give you a chance to hone your literary and poetic skills in the comfort of your own deskchair. Yes, a contest.
Best haiku using as much of Cohen’s unique vocabulary as syllapossible gets to vote on our new fall intern. Scoring will be completely arbitrary, unfair and primarily focused on creative use of words and phrases like “fabulous” and “V-Shaped.”
Stocks in ‘New Bull Market,’ But Climb Will Be Slow: Cohen [CNBC]