Friday, July 13, 2012
Thursday, July 12, 2012
Louis Freeh, who headed the Penn State investigation, has released a copy of the remarks he plans to give at a press conference at 10 a.m. today. You can read the full release online, but here are some highlights:
- “The most powerful men at Penn State failed to take any steps for 14 years to protect the children who Sandusky victimized. Messrs. Spanier, Schultz, Paterno and Curley never demonstrated, through actions or words, any concern for the safety and well-being of Sandusky’s victims until after Sandusky’s arrest.”
- “Our investigative team made independent discovery of critical 1998 and 2001 emails – the most important evidence in this investigation.”
I want to focus on Joe Paterno. Here is a man who shaped and molded young men for six decades, and whose legacy has now been shattered because he valued his friend over what was moral and right. He portrayed himself as a just and moral man, and it was all a fraud. All of it.
Wednesday, July 11, 2012
Tuesday, July 10, 2012
"A cesspit." That's how the usually measured Paul Tucker, deputy governor of the Bank of England, described banks' attempts to manipulate the London interbank offered rate, or Libor.
Faced by a throng of sound-bite-hungry British Parlamentarians, on Monday Mr. Tucker did a convincing job of rebuffing allegations that the authorities had put pressure on Barclays PLC to manipulate Libor, the world's most important interest rate.
There's a hint in that last paragraph as to why you should be paying more attention to this story. LIBOR is the rate that is the basis of the interest rate you pay on everything, from your mortgage and credit cards to student and auto loans.
Not the Fed rate, LIBOR. LIBOR (London InterBank Offered Rate) is set by a panel of lenders each night, and therefore is removed from the political pressures of the Federal funds rate (the rate at which banks lend money overnight to other banks in America.) Ostensibly, it should be a fairer and truer benchmark of, to put it in layman's terms, the cost of borrowing money.
Which is fine. Free markets, no social structural rate, no incentive for a government to raise or lower, yadayadayada. It makes sense for the markets to use this rate to set all other rates.
The investigation found that Barclays's traders communicated with colleagues at some of the 16 banks involved in Libor setting. As one Barclays trader explained to another one at a rival lender, "the trick is you must not do this alone." This kind of evidence should help regulators prove that others were in on the fix.
Given [Barclay's CEO Robert] Diamond's resignation, the question is whether CEOs of other firms will follow suit once their companies settle. While some will argue they weren't there at the time, those with long tenure and an investment-banking past will come under pressure.
"CEOs of other banks should be worried, especially those who rose through the ranks of the fixed-income and rate businesses" says Michael Karp, managing partner of Options Group, an executive search and consulting firm.
Monday, July 09, 2012
CBS News has confirmed that President Obama will call on Congress Monday to pass a temporary, one-year extension of the Bush-era tax cuts for people who make less than $250,000 a year.
The tax cuts are set to expire on January 1. With Monday's announcement, the president is hoping to show voters a very clear difference between himself and Mitt Romney.
For an election year in a sluggish economy, this is not a bad strategy. It does two things: it maintains the tax cuts for the real job creators (the middle class, who own something like 95% of the small business in this nation and created something like 90% of our jobs) while forcing Mitt Romney to defend lower taxes for the wealthy, who clearly do not create jobs, particularly when their money remains in the Cayman Islands or Switzerland.
This does force Romney's hand at a time when Congress is in session, albeit a bit on the early side to have much impact in the silly season later. Except that Romney's words had best be chosen very carefully or Obama will use them in the debate.
Obama seems to be a pretty decent lawyer. He's entering evidence now that can be used later at what can only be considered a trial: the Presidential campaign, in which an entire 100,000,000 member jury will weigh each word and then vote precisely how they are told to.
Altho, in fairness, people seem to be paying attention already and making up their minds.
In the back of my mind, I see something like $6 to $8 billion being spent by Republicans and their superPAC allies in an attempt to unseat the incumbent. I don't see a lot of jobs being created and I see a romp by Obama in November.
And these are the guys who swear they're smart businessmen?