SI
SI
discoversearch

   Non-TechGreenspan, Rubin & Co - the Most Irresponsible Team Ever??


Previous 10 Next 10 
To: Cynic 2005 who started this subject10/11/2000 12:03:05 PM
From: JPN
   of 309
 
Is this what Greenspan had in mind when he said there would be a "soft landing"? It seems to me that he has not been as concerned about the Euro and the oil as he was about the Asian Currency Crisis. Or maybe the election just has his hands tied ... any thoughts? Interest rate cut after the election?

Does anybody think that largely, the Fed and President are like a coach, they get too much credit when things go well and too much blame when things go wrong. Seems to me the economy is bigger than both. Adam Smith's free markets and the herd mentality ...

Share RecommendKeepReplyMark as Last Read


To: Thomas M. who wrote (273)11/5/2000 12:54:45 PM
From: Cynic 2005
   of 309
 
I have long hated the Greenspud and co for acting so irresponsible in their jobs. Artur Levitt may be the head of toothless tiger. May be he was just a talker not a doer. But one thing he did recently makes me so happy that, if he is running for the Prez, I will take-up US citizenship and vote for him. And I am not kidding.

washingtonpost.com
Levitt's SEC Angers Auditors, Analysts

E-Mail This Article

Printer-Friendly Version





By Sandra Sugawara
Washington Post Staff Writer
Sunday, November 5, 2000; Page E1



Lobbyists for Wall Street say there is a Democratic way and a Republican way to regulate the securities markets.


Securities and Exchange Commission Chairman Arthur Levitt Jr. embodies the Democratic way. He has fashioned himself as a populist, pro-consumer regulator. He has not hesitated to use regulatory authority if he believes it will help individual investors, even if it adds to the burden on industry, say Wall Street lobbyists.


Among the results is a new SEC regulation that bans publicly traded companies from selectively leaking market-moving information to favored analysts or big investors before the information is disclosed to the general public.


Many analysts, whose job it is to guide their big clients' investments, are furious with the newly enacted rule. One Wall Street official said, "under a Republican administration, there wouldn't have been" such action.


The SEC has promised to study the "selective disclosure" ban next year to see how it is working. It is unlikely that a Democratic chairman would undo the rule, unless major problems arose; some Wall Street analysts are privately hopeful that a Republican administration will give them some relief.


The accounting industry is similarly upset by their treatment by Levitt's SEC.


Under securities laws, publicly traded companies must file financial statements reviewed by independent auditors. Levitt was concerned that the Big Five accounting firms were losing their independence from their audit clients because of all the lucrative consulting work they were doing for them. So the SEC proposed over the summer that accounting firms be banned from doing consulting work for audit clients. The accounting industry's main trade group and three of the large firms – Arthur Andersen, Deloitte & Touche and KPMG – accused the SEC of overreaching.


Privately, some accountants, and their supporters in Congress, say a Republican SEC chairman would never attempt to enact such regulations. The SEC and three firms have been intensely negotiating over the proposed rule, trying to reach a compromise. ( Oh yeah? Whining, it is your turn, for a change - bozos!)


Indeed, Wall Street expects that a Republican SEC chairman would more closely reflect the philosophy of free-market advocates such as Sen. Phil Gramm (R-Tex.), the influential chairman of the Senate Banking Committee. Gramm worries that antiquated or unnecessary regulations could hamper the growth of the United States' stock markets and securities industry. If there is a Bush administration, lobbyists expect Gramm to play a leading role in the selection of a new SEC chairman.


In coming years, the SEC also is expected to face a host of issues created by globalization, the emergence of new trading and telecommunications technologies, and increasing competition among stock markets.


For instance, with major U.S. exchanges talking about linking up with foreign exchanges and with more U.S. investment banks doing global deals, the SEC must decide whether it wants to relax some of its trading and accounting rules to facilitate these transactions.


Likewise, with technology creating a host of new electronic competitors to traditional stock markets, the SEC must decide whether and how much to intercede to help investors find the best price for a specific stock.


These kinds of issues do not necessarily break along party lines, say lobbyists, although they expect Republicans to be more inclined to remove regulations and allow markets to respond.

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Cynic 2005 who wrote (275)11/6/2000 1:09:22 AM
From: Thomas M.
   of 309
 
Yeah, they're going to run that Clown Zero out of town like they ran out the woman who was trying to regulate the futures market.

The whole idea of conservative/liberal and Democrat/Republican gets very confusing sometimes. I mean, Gramm is sort of an arch-conservative, and yet he is basically preaching financial recklessness as opposed to prudence.

Tom

Share RecommendKeepReplyMark as Last ReadRead Replies (2)


To: Thomas M. who wrote (276)11/9/2000 11:25:53 AM
From: Cynic 2005
   of 309
 
Here is more about Levitt:

economist.com
--------------------
Economic Focus

Shining light on the markets
Oct 26th 2000 | NEW YORK
From The Economist print edition

Arthur Levitt’s chairmanship of the Securities and Exchange Commission may be ending with a fight over one of the most fundamental issues in American capitalism: who should be in the know








THE resignation letter is not yet signed, but Arthur Levitt is likely to step down as chairman of the Securities and Exchange Commission (SEC) around the end of the Clinton administration. If so, America’s top markets regulator will depart with all guns blazing. Mr Levitt is currently embroiled in furious battles with Wall Street’s most powerful companies and with the world’s biggest accounting firms. His goal is to improve the quality of information flowing to investors, particularly to the many ordinary members of the public who have recently become participants in the financial markets. With time running out, much remains to be done.

First, Mr Levitt wants to ban accounting firms that audit a company’s books from selling that company other, more lucrative, services. How much is at stake? According to Mr Levitt, it is the very integrity of financial statements. There is plenty of evidence that financial statements often fail to come up to scratch. The number of companies restating their accounts—never in ways that make them appear healthier—has been rising so fast as to have become almost commonplace. Well-known firms whose audited profits shrunk in a restatement include Waste Management, Sunbeam and CUC International, during its merger with Cendant. Investors have lost billions of dollars, and much of their faith in auditors.

How many of these problems are due to conflicts of interest within auditing firms is hard to say. But Mr Levitt is rightly concerned about the way accountants currently sell their services. For instance, it is typical to charge a rock-bottom price for the audit and then huge fees for supplementary consulting contracts to install information systems. Every audit involves many fine judgment calls. Could hopes of a lucrative consulting contract lead to a gentle audit?

Of course not, say the accounting firms. But there is little doubt that nothing worries them more than the prospect of profits forgone through being locked out of consulting. Andersen Consulting produced revenues in excess of $7 billion last year—before its acrimonious split from its accountancy brothers at Arthur Andersen. The prosperous consulting arm of PricewaterhouseCoopers is being sold to Hewlett-Packard for $18 billion.

Congress, which has never been known for valuing straightforward accounting but which does appreciate the value of a well-heeled constituency, has been heavily lobbied on this issue and may soon intervene on behalf of the poor bean-counters (see article). Negotiations between industry representatives and the SEC are in progress, with an eye to a settlement based on disclosure, which Mr Levitt would probably regard as better than nothing.

In a move with even wider implications, on October 23rd the SEC put into effect Regulation FD (for fair disclosure), requiring companies to provide the public with information at the same time as favoured security analysts and portfolio managers. It is hard to imagine a position more consistent with the underlying rationale for American securities law, which was based upon the belief of the late Supreme Court Justice Louis Brandeis that “sunlight is the best of disinfectants” for market and societal failures. Indeed, given the 70-year-old thrust of American financial regulation towards fairness and transparency, it is remarkable that this kind of selective disclosure has been tolerated at all.

Wall Street, however, is feeling aggrieved. The Securities Industry Association, its lobby, issued a letter signed by current or former top executives at 15 major firms blasting the proposal for providing special privileges to rating agencies and the media (to which companies can disclose anything they like, on the presumption that they are conduits to the public). Worse, says the SIA, the result would be less disclosure by companies, which will no longer feel comfortable talking to anyone. Privately, asset managers worry about losing crucial access to extra information. Merely knowing that earnings will come in a bit over or under expectations is a way to earn pots of money.

Collectively, these moves by the SEC are a powerful attack on the Wall Street tradition of trading to benefit a small group of insiders. Mr Levitt aims to eliminate conflicts of interest in the production of financial information and barriers to distributing it. The surprise is that none of the more overt populists in Washington has hopped on the bandwagon. Not that Mr Levitt needs much help in proselytising. Last Sunday night he was on national television decrying stock manipulation; on Monday, he debated before a panel of accountants in New York, then on Tuesday, October 24th, he gave a speech to the accounting-industry trade group at its annual meeting in Las Vegas, of all places, where he appealed to, of all things, its members’ virtue.

“In what other profession is it one’s duty to tell the customer when he’s wrong?” asked Mr Levitt. “What other profession is enshrined in our nation’s securities laws to serve no interest but the public’s? What other profession so directly holds the key to public confidence—the life-force of our markets?” Alas, he added, “it has become clear that the perceived value of the audit is being put at risk.” Was there a cad in the room in favour of such debasement?

Mr Levitt certainly knows what he is talking about. His early education in financial markets came from discussions between his schoolteacher mother and the man who was the custodian of her retirement savings in what was then the second-largest pension fund in the country—her husband, Arthur Levitt Sr. As Arthur Jr likes to point out, his mother never left his father in doubt about who was working for whom.

Mr Levitt helped found an investment firm that is now part of Citigroup, where he fell out with current Citi boss, Sandy Weill. He then ran a stock exchange and part-owned a paper devoted to Congress, Roll Call (since bought by The Economist). A former consultant to his old firm is the Federal Reserve chairman, Alan Greenspan, with whom he often plays golf. He also crossed professional paths over the decades with Robert Rubin, once of Goldman Sachs and the Treasury. It is a peculiar, and under-analysed, feature of the Clinton administration that oversight of the economy and markets has been left to a few old pals from Wall Street.

“He probably has the greatest breadth of knowledge of any chairman of the SEC,” says Michael Lipper, former head of the eponymous investment-management tracking firm, who in the 1960s shared a stock-ticker with Mr Levitt’s nascent brokerage firm.

As early as 1972, Mr Levitt blamed his industry for mistreating small investors. “The issuance of common stock and other securities is predicated on broad public owners,” he said. “Our entire system of broad-based American capitalism is based on this condition.” Yet Wall Street provided plenty of reasons for wise individuals to stay away.

Mr Levitt was considered a possible SEC head under President Reagan but, given his predilections, perhaps it was appropriate that his tenure began in 1993, just as popular enthusiasm for investing, and technology for doing so efficiently, was emerging (see charts). Avoiding turf wars, Mr Levitt used his personal relationships with other regulators to settle inter-departmental spats, spent a third of his time nurturing ties with Capitol Hill, and then devoted his remaining energy to solving issues that could have been taken directly from that speech 20 years earlier.








Top of the list was better disclosure. This included providing details of how brokers are compensated; how exchanges disclose customer orders; revealing a firm’s exposure to derivatives; and spelling out what fees are charged to mutual-fund customers. In none of these areas is disclosure perfect yet. In 1996, a landmark collusion case against the Nasdaq stockmarket resulted in much fuller disclosure to customers of prices that were hitherto open only to brokers. A free SEC website featuring corporate filings has opened up oceans of good information for investors who need to know more than share prices. Disclosure rules and outright prohibitions on political contributions by underwriters have had a huge impact on the municipal bond market, a business that was once driven not by providing cheap financing for local governments but by large campaign contributions for politicians.

For the first chairman of the SEC, Franklin Roosevelt chose Joseph Kennedy, a man widely believed to have had first-hand experience in every dastardly scheme Wall Street had ever thought of, on the theory that a fox was best suited to guard a henhouse.

Mr Levitt’s more honourable background in the industry has probably served him even better. The investment world has often recoiled at his criticisms, and, to be fair, he does sometimes hector and has an overly paternalistic streak. But it never becomes mutinous, if only because the transgressions he attacks are quite widely acknowledged. On the other hand, his frequent use of the “bully pulpit”, rather than binding rules, may mean that his reforms will be easily reversed if he is replaced by somebody with less moral certainty and clout on Wall Street.

Mr Levitt has hinted that he is ready to step down after his record stretch in the job— though the next administration, whatever its bent, might try to keep him on to finish what he started. He has said he would like to head a museum or a newspaper. Failing that, he could, like many successful Americans, retire to Florida where he already has a home, and sail his boat named, appropriately enough, Full Disclosure.

Share RecommendKeepReplyMark as Last Read


To: Thomas M. who wrote (276)11/17/2000 1:10:58 PM
From: Cynic 2005
   of 309
 
Tom,
Here is why the market fears a Bush presidency..

Lindey will certainly play a major role in Bush economic policy - he may even be the Treasury Sec. He is is outspoken and a proponent of tough love! Also he have criticized Greespam on occasion. Most recently he said the they will start with a plan that will create "modest fiscal contraction!" It is so easy to create a plan that would create a fiscal contraction. The problem with it is that it won't be "modest!" LINDSEY thinks that he can ENGINEER IT! All I will say is, GOOD LUCK, PAL!

Message 14766539

Any fiscal contraction at this stage will take a life of its own and difficult to control by any means! IMO!

Share RecommendKeepReplyMark as Last ReadRead Replies (3)


To: Cynic 2005 who wrote (278)11/17/2000 2:14:33 PM
From: Thomas M.
   of 309
 
I LOVE the idea of Lindsay as Treasury Secretary.

Tom

Share RecommendKeepReplyMark as Last Read


To: Cynic 2005 who wrote (278)11/30/2000 8:29:20 AM
From: Thomas M.
   of 309
 
(slightly off-topic, but corruption is corruption)

Last year, U.S. District Judge Royce Lamberth cited former Treasury Secretary Robert Rubin and Interior Secretary Bruce Babbitt for civil contempt of court because their lawyers had destroyed 162 boxes of key records in the case and had engaged in what the judge termed a coverup and a travesty of justice.

interactive.wsj.com

Share RecommendKeepReplyMark as Last Read


To: Cynic 2005 who wrote (278)12/15/2000 12:26:46 AM
From: Thomas M.
   of 309
 
Here is a claim that the person in whom Greenspan confided about pumping the system with credit was Teddy Butler Henderson:

csf.colorado.edu

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Thomas M. who wrote (281)12/15/2000 6:56:39 AM
From: Cynic 2005
   of 309
 
John Barry throws icy cold water at the Bulls hopes for a rate cut next week!

biz.yahoo.com

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Cynic 2005 who wrote (282)1/4/2001 12:56:33 AM
From: Thomas M.
   of 309
 
siliconinvestor.com

From the book "Inside Job," written by Steven Pizzo, about an encounter in 1984 between Greenspan and Ed Gray, who was the Federal Home Loan Bank board chairman:

"Gray received a letter from respected economist Alan Greenspan telling him he should stop worrying so much. Greenspan wrote that deregulation was working just as planned, and he named 17 thrifts that had reported record profits and were prospering under the new rules. Greenspan wrote the letter while he was a paid consultant for Lincoln Savings & Loan of Irvine, CA, owned by a Charles Keating, Jr., company. Four years after Greenspan wrote the letter to Gray, 15 of the 17 thrifts he'd cited would be out of business and would cost the FSLIC $3 billion in losses."

Share RecommendKeepReplyMark as Last ReadRead Replies (3)
Previous 10 Next 10 

Copyright © 1995-2017 Knight Sac Media. All rights reserved.Stock quotes are delayed at least 15 minutes - See Terms of Use.