Regulatory Reform

Here's an interesting tidbit. It's the introductory paragraph of the US House of Representatives Committee on Financial Services mission ... their legislative role as mandated by law (it goes on to state it's supervisory role WRT the SEC and the GSE's; Fannie, Freddie and Ginnie - they dropped the ball on all fronts).

Just in case you all may not have noticed, each and every MBS as well as every CDO and every CDS MUST be blessed by an accounting firm in addition to undergoing a rigorous rating examination and an SEC filing. I'm guessing that this was written during the immediate post ENRON period giving congress and the SEC lots of time to ignore the run-away freight train that the MBS market became and that was facilitated by lax oversight.

Tell me, do you think that our representatives did their job? Do you think that they were (are) more interested in donations from the banks than in enforcing regulations? Our representative here in the sixth district is a member of this committee and has been all along. Read on!


Capital Markets, Insurance, and Government Sponsored Enterprises

The United States has the largest and most efficient capital markets in the world, providing the investment needed for businesses worldwide to grow and flourish. Since the 107th Congress, the Financial Services Committee has had responsibility for overseeing U.S. policy in the capital markets and for ensuring the transparency and integrity of those markets. Millions of Americans either directly or indirectly invest their savings and retirement funds in the capital markets. Unlike accounts at banks and other depository institutions, these investments are not insured by the federal government. In light of these facts, the Democratic Caucus has sought to promote policies that will provide the greatest possible investor protection and ensure all investors are treated fairly. The Committee also has oversight responsibility for the insurance industry and for a number of government-sponsored enterprises.

Sarbanes-Oxley Act Implementation

The collapse of Enron and revelations of accounting fraud at major public companies has profoundly shaken the confidence of investors in U.S. equity markets. To help restore the integrity of the markets, the Democratic Caucus promoted reforms that were ultimately adopted as part of the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act included important reforms intended to restore auditor independence, improve financial disclosures, increase corporate responsibility, and enhance the ability of the Securities and Exchange Commission to prosecute securities fraud. For these reforms to be effective, however, they must be thoroughly implemented. The Committee’s Democrats will continue to focus on ensuring that post-Enron reforms are fully and effectively implemented.

Corporate Governance

The Sarbanes-Oxley Act included important corporate governance reforms to ensure that independent directors were truly independent and that auditors were responsible only to audit committees, not to management. More needs to done, however, to ensure that the management and the boards of directors of public companies act in the interests of shareholders. The Democratic Caucus will continue to press for additional reforms to reduce the conflicts of interest faced by managers, directors, and auditors.

Auditor Oversight

The Sarbanes-Oxley Act established the Public Company Accounting Oversight Board to provide direct oversight of the auditing profession for the first time. The Financial Services Committee must exercise its oversight authority to ensure that the new Oversight Board provides the kind of regulation and supervision necessary to restore the independence and integrity of the audit profession. Committee Democrats will continue to push for policies that limit the conflicts of interest faced by auditors as a result of non-audit services provided to public companies.

Hypocrisy, isn't one of the best human traits?

Reform This!

There is quite a bit of discussion related to financial institution and market reform. It begs the question, is there a pill that will cure avarice? or another to increase the intellect of the people at the credit rating agencies? Here is a suggestion that I'm sure will be embraced by the people making the decisions ... let's have congress actually pass new regulations that are in the best interests of we, the people, not the people in the financial institutions that got us into this mess in the first place.

Evolution?

A while back, I was walking up a "mountain" side in California. I noticed one of those fluffy seeds that become wind born, like milkweed, floating away on a breeze. Though Kris and I were together, we were alone with our thoughts as we walked. Anyhow, the seed awakened a thought that had been with me long before this particular walk and persists to this day ... that is, what is the nature of intelligence and is it the sole purview of human beings? Relating to this question, I think that one has two fundamental alternatives; one, the biblical version of why things are or two, some version of Darwinism. As any of you who know me know well know, my opinion is, that religious texts tend to be rather dull works of fiction, not very plausible substitutes for a more rigorously scientific explanation of reality. In other words, it's a really good story and one that is easy to believe for those among us who possess the requisite faith (my personal feeling is, that the idea of an unseen being that made things happen in the eyes of an uneducated population, e.g., the god of lightening provides a plausible explanation for fire, is the seed from which most of the dogma has sprung). If anyone really takes the time to think about things, one has no choice but to see the contradictions in religious texts. That's really the point that I want to make - most folks really don't think - really think. It's much harder to think. I'd really like to be able to accept everything that I see as god's plan, but there are too many contradictions. Look at it this way; if man is made in the image and likeness of god and if man is as screwed up as he certainly seems to be, doesn't it stand to reason that god is a mess too? If my thinking is flawed though, the whole thing is a pretty good joke, an experiment in the creation of a being that is supposed to evolve to become god-like but lacks a decent role model.

So, why is man so suggestible?

Back to the milkweed seed and a plausible alternative to the bible. All things that have the ability to reproduce possess intelligence - reproduction takes some level of "thought". The whole survival of the fittest notion pretty much sums it up in terms that anyone can relate to. Think about migration and the way things move around ... pollen as an example. Did you know that ragweed produces 1,000 times as much pollen when it feels threatened with extinction? The point is, ideas seem to exist in some form of an ether. We all possess some level of this knowledge. This is the real original sin. It's that little germ in our minds to which very few of us have the desire to visit. It tells us that, yes, we all have that ability to be god-like but to admit it is to admit that we're pretty much failures because very few of us really follow what what we want to do or to be. So there is this fundamental escape from reality. The reality that we have created a reality that is governed by religious cults and politicians who do the bidding's of those who fund their existence. Religions housed the only books that existed thousands of years ago and, one way or another, they all told the same story and they all used the same hook - eternal life. It works, because we all have this fundamental sense that there is more than what we can see. There probably is, but it's not housed in heaven and hell, it's the ether ... it's where ideas reside.

I suppose that I could go on, but I have a short attention span and I want to make the following point again: the reason why we are in this economic pickle is that we don't think. A big reason why, has to do with the fact that so many of us have gotten behind the eight ball because of easy credit. So how did it happen? Who allowed it to happen? You all know the answers. So, are you going to do anything about it or are you going to re-elect the idiots that facilitated the whole mess? Huh punk, are ya?