Tuesday, June 16, 2009

The Good the Bad and the Ugly

This one's short, sweet, and perhaps a little rough around the edges ...

The Good:
Geithner finally says something logical ... executive pay standards can be set by regulators but must be enforced by shareholders and boards.

He even said something smart: the US financial industry regulatory patchwork must be overhauled. The Fed should be put in the lead.

More generally, and as I will cover in detail in an upcoming blog, a sea change is coming in corporate accountability, focused, as I've always said it should, on the board.

Politicians are suddenly less paranoid about discussing healthcare.

The worst recession in 70 years turns out not to be the end of the world for most folks.

The Bad:
Promptly after saying something smart, Geithner proceeded to say something stupid. The holy grail of financial industry regulation most certainly is NOT a "council" of regulators. WTF good is this politicized talk-shop? Put someone in charge for chrissake. Make them independent for the love of God. I'm all for competition, even within government services, but it depends on what they're competing for. What are their incentives? How are they measured? The current incentive framework for these schmucks is: bloat their budget, cozy to the institutions they regulate, and kiss as much ass on the banking and FS committees in Congress as possible. Does he really think that the FDIC and OTS would have been any less of a joke as regulators if they had simply had more touchy-feely time with their fellow bureaucrats? How about getting out into the field and figuring out what's going on in the industry ... and then actually DOING something about the ugliness under the covers.

Worldwide equity and bond markets are turning around. We'll give back at least a third of what we've gained since January.

The Ugly:
This week we saw news of an "inquest" in Canada to figure out why a woman languished, entirely ignored, screaming and pushing the emergency button in a hospital for 4 hours before her husband had to single-handedly midwife her through birth. Duh.

In response, Obama decided that we should adopt the Canadian system. No lawsuits allowed, just like Canada. No guarantee of service levels, just like Canada. No responsible party, just like Canada. Obama's healathcare proposal is dreamware. Instead of injecting some reality, his crew and Congress have launched threats against anyone daring to speak reality (Elmendorf hang in there).

He was so busy thinking up this nugget that he forgot to check on those silly Iranian elections. Or maybe he saw the violations of basic human rights, international law, and his own past blathers ... and just didn't think they were important enough to disturb the lovely peace he's cultivating with his new Muslim BFFs. Maybe he's just being cooooool. Like he has been about the Dear Leader.

MLB players get to buy performance. NFL players get to buy their ay out of murder.

The Post Script:
There's a common thread to many of the "new" solutions that are being trotted out: the idea that more talk is the solution to every problem. I'm a massive fan of communication and information, but neither is an end in itself. These are means. These are methods. A car may need gas to get you from A to B ... but a can of gas is pretty damn pointless without a car ... or a road ... or the ability to drive ... or any of the other co-requisites.

Let's not take our eye off the ball.

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