Tuesday Reads

Good Morning!

I am back in New Orleans and looking forward to less–hopefully no–major events in my life.  I’m exhausted!  There are parts of corporate finance that are actually more interesting than you would think.  We’ve talked some about moral hazard.  This is part of the principal agent problem. This problem happens when you have a senior manager that is hired to run a firm who is an “agent” for the owners.  One of the related topics is corporate governance and the role that the board of directors plays in watching the agents.  JP Morgan has some classic problems as outlined in this Bloomberg article.

The three directors who oversee risk at JPMorgan Chase & Co. (JPM) include a museum head who sat on American International Group Inc.’s governance committee in 2008, the grandson of a billionaire and the chief executive officer of a company that makes flight controls and work boots.

What the risk committee of the biggest U.S. lender lacks, and what the five next largest competitors have, are directors who worked at a bank or as financial risk managers. The only member with any Wall Street experience, James Crown, hasn’t been employed in the industry for more than 25 years.

“It seems hard to believe that this is good enough,” said Anat Admati, a professor of finance at Stanford University who studies corporate governance. “It’s a massive task to watch the risk of JPMorgan.”

JPMorgan, with $1.13 trillion of deposits, is the only one of the six largest U.S. lenders that doesn’t have a former banker, regulator or finance professor on its risk committee.

Susan Bies, who served as a Federal Reserve governor for six years and risk manager at First Horizon National Corp., sits on Bank of America Corp.’s panel. Morgan Stanley’s includes Masaaki Tanaka, CEO for the Americas at Bank of Tokyo-Mitsubishi UFJ Ltd., while Robert Joss, a former U.S. Treasury Department official who ran Westpac Banking Corp., is on Citigroup Inc.’s. Nicholas Moore, a former PricewaterhouseCoopers LLP chairman and CEO of its U.S. unit, is one of six directors on Wells Fargo & Co. (WFC)’s risk committee.

Only Bank of America’s risk committee is as small as JPMorgan’s. Goldman Sachs’s has eight members, including Stephen Friedman, a former chairman of the firm who advised President George W. Bush on economic policy, and James Schiro, a former CEO of Zurich Financial Services AG.

This is a big wow.

A Bloomberg Op Ed also caught my eye. Albert R Hunt writes that “Bush’s Terror Overreach Becomes ’New Normal’ Under Obama”.

Critics of President George W. Bush’s anti-terrorism efforts, mainly Democrats and some Republicans, rejoiced when Barack Obama was elected. They were convinced that what they considered the post-Sept. 11 trampling of constitutional rights and civil liberties would end.

As a candidate, Obama, a former constitutional law professor, promised to close the prison at Guantanamo Bay, Cuba, as well as to end indefinite detention and the rendition of terrorism suspects to other countries, where they often were tortured. He also vowed greater accountability and transparency in the conduct of war.

Things look different today. In his new book, “Power and Constraint: The Accountable Presidency After 9/11,” Jack Goldsmith, a Harvard Law School professor who served in the Office of Legal Counsel under Bush and objected to some of that administration’s tactics, writes: “The Obama administration would continue almost all of its predecessor’s policies, transforming what had seemed extraordinary under the Bush regime into the ‘new normal’ of American counter-terrorism policy.” That seems only a slight exaggeration.

Soraya Chemaly writes at Alternet about the 6 Absurdly Demeaning Conservative Attacks on Women.  Language plays an important role in right wing attacks on women.

Everyone does it, using language that renders women as animals;the list is endless. This culturally ingrained misogyny, as reflected in acceptable language that dehumanizes half the world’s population, is not limited to any one country or religion, or followers of one or another ideology.

 But in U.S. politics, a particular trend has emerged among a certain set of conservatives: that of equating a woman with a farm animal. When, last week, Safeway Senior Vice President General Counsel Bob Gordon stood before a shareholders’ meeting telling a “joke” that portrayed Secretary of State Hillary Clinton and House Minority Leader Nancy Pelosi as being worth less than a pair of hogs,he clearly had no reservations about publicly making this joke and obviously thought it was funny. After all, he was only elaborating on a meme that’s been evolving among right-wing Republican politicians in state legislatures.

Let’s see. There’s state Rep. Terry England, the infamous Georgia legislator comparing pregnant hogs and cows to women while debating a proposal that became known as the “women as livestock bill,” which would hold pregnant women to the animal husbandry standard of carrying a dead fetus to term.

Then there’s Missouri House Majority Leader Tim Jones, explaining that he was well-prepared to propose restrictions on women’s health options because his “father’s a veterinarian.”

And Arizona state Sen. Russell Pearce’s sexist and racist reasoning that immigrant women come here to “drop a child” during their “breeding season.”

Montana Rep. Keith Regier recently explained the higher value of “preg-tested” cows, forcing his opposition to point out that “We do not place price tags on women in the same way that we do on cattle.”

State Rep. Mary Franson of Minnesota created a video to explain, as a context for discussing food stamps, that “animals may grow dependent and not learn to take care of themselves.” That was similar to South Carolina Lieutenant Gov. Andre Bauer’s explanation of welfare mothers as “stray animals” who will “breed”because they don’t “know any better.”

Last but not least, there’s the sexualized bitch category to which Georgetown student Sandra Fluke was dragged, in a sort of gender-bending mode, when Republican state representative Krayton Kerns, an actual “cow doctor,” compared herto a rutting bulldog paid stud fees for sex at Kern’s veterinary school.

These right-wing politicians and legislators obviously favor pigs, cows and livestock in their “women are not quite human” metaphors and analogies. What does this tell us about how conservatives like their womenfolk? What do these animals share?

The USS Illinois will be the first Navy submarine to be staffed by an all-female crew. The sub will be sponsored by First Lady Michelle Obama.

On Monday, First Lady Michelle Obama officially sponsored the Virginia-class submarine, which will be one of the newest nuclear-powered boats scheduled to enter the fleet by 2015, according to a White House statement.

“It’s an honor and a privilege to serve as sponsor of the USS Illinois,” the first lady said, according to the statement. “This submarine is a tribute to the strength, courage, and determination that our Navy families exhibit every day.”

The Illinois is the second ship the First Lady has sponsored since coming to the White House. She sponsored the Coast Guard Cutter Stratton, based in Alameda, California, earlier this year, according to administration officials.

Former First Lady Laura Bush sponsored another Virginia-class attack sub, named the USS Texas, in 2004. In 1994, then First Lady Hillary Clinton sponsored the Los Angeles-class sub USS Columbia.

Obama’s endorsement of the Illinois, particularly its all-female crew, comes as women in the military are pushing the Pentagon for a larger role in combat operations.

The Pentagon announced in February that it was opening up 14,000 new positions, most in the Army, to women after a review of its policies on women in combat.

How cool is that?

What’s on your reading and blogging list this morning?

27 Comments on “Tuesday Reads”

  1. I love the story about the all woman sub, that is very exciting!

    • NW Luna says:

      Yes, and the women won’t have to worry about being harassed by men!

      “This submarine is a tribute to the strength, courage, and determination that our Navy families exhibit every day.”

      But I wish she’d said something about the strong, courageous and determined Navy women too.

  2. Pat Johnson says:

    The comments against women made by these legislators is nothing short of despicable.

    Comparing women to farmyard animals is astonishing since I would assume that most of these men, and a few empty headed women, have mothers, daughters, wives, sisters?

    I ask that since I am not sure the lack of respect toward women seems to apply here. It is difficult to think that these men would appreciate their own mothers being described as a “cow”.

    The level of hatred, along with a lack of intelligence, appears to have taken over the leadership of this nation since it seems as though these people feel free enough to equate women as nothing more than “breeders” and have found an acceptable audience who share that belief.

    There is definitely a “war against women” out there but try finding a healthy opposition to beat back the ignorance. A few voices here and there but overall a vacuum of dissent.

    You can almost hear the next level of “acceptance” hidden amongst the comments. Mandatory abortion towards a segment of women producing children that are not considered Grade A standards.

    We seem to be a few chapters into “The Handmaid’s Tale” when reading between the lines.

    • dakinikat says:

      We are chattel to them.

    • bostonboomer says:

      Those quotes should be included in all advertising by opposing candidates. No matter how often I see this, I’m shocked that these men can get away with such language toward women.

      • NW Luna says:

        No matter how often I see this, I’m shocked that these men can get away with such language

        Exactly! It is so jarring to me when I read or hear this kind of talk. WTF is the matter with others that they put up with it?

  3. Pat Johnson says:

    And where was Mittens this weekend?

    In Las Vegas, arm and arm with his new BFF Donald Trump, champion misogynist and mediawhore, who somehow considers himself the GOP Kingmaker who requires his underlings to make that pilgrimage to Trump Tower for the honor of kissing his fat ass!

    One can only imagine what Trump “wants” from Romney with all this kissy face attention and throwing birthday parties for Ann Romney, but you can rest assured it won’t be something on behalf of the rest of us.

    And Romney has not bothered to issue any statement that may disavow the assertion that Obama is not a citizen but instead stands there like the empty vessel he is allowing that blowhard to maintain the ongoing ruse.

    The shallowness and the hypocrisy is astonishing to witness

    • dakinikat says:

      Yeah. Hanging with the birther-in-chief.

    • bostonboomer says:

      Obama hits Romney on birther claims

      Asked about Trump’s birther comments, Romney told reporters Monday: “You know, I don’t agree with all the people who support me, and my guess is that they don’t all agree with everything I believe in.” He added, “I need to get to 50.1 percent or more, and I’m appreciative to have the help of a lot of good people.” (That line recalled failed Democratic presidential candidate Adlai Stevenson’s potentially apocryphal rejoinder to a woman who told him on the trail in 1956 that he had the support of “every thinking person.” “That’s not enough, madam, we need a majority,” he supposedly replied.)

  4. bostonboomer says:

    Gene Lyons has a really funny column on Mitt Romney and the other Wall Street whiners: Sir Mitt’s thin skin.

    Corporations are people too, and people get their feelings hurt. What’s more, the richer they are these days, the more sensitive they seem to be. It’s reminiscent of that Hans Christian Andersen story of the “Princess and the Pea.” You know, where the tender young virgin is so delicate that a single pea hidden under seven feather mattresses keeps her awake all night. That’s how the prince satisfies himself that she’s a real aristocrat.

    So it is with Mitt Romney, GOP presidential candidate and onetime corporate buccaneer. When Romney’s not running around boasting about his enormous success running Bain Capital and accusing others of envying the vast wealth he’s got stashed in numbered accounts in Switzerland and the Cayman Islands, his tender sensibilities are constantly being offended by peasants whining about lost jobs and stolen pensions.

    Why do they hate America?

    Anyway, his thin skin is how you know Romney’s an aristocrat. Ever since reckless gambling by Wall Street investment bankers cratered the world economy back in 2008, their collective self-pity has been something to see. It’s not enough that taxpayers should bail them out, and then watch them go back to awarding each other multi-million dollar bonuses like one of those children’s athletic programs where everybody gets a trophy.

    Evidently, it’s our patriotic duty to pretend that nothing ever happened, and to reject attempts to regulate Wall Street both as an impediment to genius and an assault upon capitalism itself. Hence the Romney candidacy — yet another GOP prep school cheerleader, and a credit to his social class.

  5. bostonboomer says:

    Here’s another good article at Bloomberg: Debt-Ceiling Deja Vu.

    Sometime around the end of this year, the federal government will bump up against its $16.4 trillion borrowing limit, as a direct result of spending and tax laws enacted by Congress. To raise the limit, legislators must pass a separate law. In principle, the extra level of approval can serve as a useful mechanism, forcing Congress to debate its priorities. But refusing to raise the limit wouldn’t free the government of its existing spending obligations. Rather, it would leave the government with no choice but to default on its debts.

    In other words, congressional Republicans are taking the government’s creditworthiness hostage when they threaten not to increase the debt ceiling. Politically advantageous as this may be, it is terrible economics. To understand why, let us consider the economic effects of last year’s debt-ceiling debate. If we know our history, perhaps we will not be doomed to repeat it.

    • bostonboomer says:

      The next debt-ceiling battle could be worse, because the stakes are even higher. In addition to the threat of default, the U.S. is facing the so-called fiscal cliff: a raft of spending cuts and tax increases that will happen at the end of this year unless Congress acts to postpone them. Another stalemate would almost certainly plunge the economy into a deep recession. Our best alternative — in fact, our only hope — is for Congress to set aside partisan politics and work together with a common goal of helping our country out of the Great Recession.

      • NW Luna says:

        Oh, great. I’m not holding my breath.

        Hey, isn’t the Great Recession supposed to be over? Somebody keeps telling us that.

  6. quixote says:

    Good to see you back!

  7. bostonboomer says:

    Christine Lagarde pays no taxes.

    Christine Lagarde, the IMF boss who caused international outrage after she suggested in an interview with the Guardian on Friday that beleaguered Greeks might do well to pay their taxes, pays no taxes, it has emerged.

    As an official of an international institution, her salary of $467,940 (£298,675) a year plus $83,760 additional allowance a year is not subject to any taxes.

    Lagarde, 56, receives a pay and benefits package worth more than American president Barack Obama earns from the United States government, and he pays taxes on it.

    • Woman Voter says:

      Christine Lagarde pays no taxes.


    • northwestrain says:

      Lost elec. this am and my post got lost as well.

      Jon Stewart a comedian had an excellent segment on economics — the GOP was claiming that the really rich should pay taxes (none to very little) — and anyway the dimwit GOP claimed that getting the taxes owned by the 1% wouldn’t make a difference. So Jon had his staff look at the numbers. Turns out that the billions of dollars not being paid by the rich would pay for one of the really big bills that the GOP was trying to rob the poor to pay. I’ll see if I can find that episode — but I expect that it was posted on this blog ages ago. Probably where I found the link in the first place.

      Ms. Lagrade throwing rocks at the non tax paying Greeks — rather like someone living in a glass house throwing rocks.

    • NW Luna says:

      So nice for her. The IMF making certain that there’s no tax for their chief.

      Makes me think of Bruce Cockburn’s song Call It Democracy

      IMF dirty MF
      Takes away everything it can get
      Always making certain that there’s one thing left
      Keep them on the hook with insupportable debt

  8. The Rock says:

    Congrats to you mom-in-law dak. I hope the new extention to your family lives a long, warm, fruitful and peaceful life 🙂

    It seems hard to believe that this is good enough,” said Anat Admati, a professor of finance at Stanford University who studies corporate governance. “It’s a massive task to watch the risk of JPMorgan.”

    But mr. Dimon in his ultimate wisdom just tells the world to move along, eh??

    This is a bit scary. These are the types of people that james bond goes after..

    Glad you are back dak! nice post!

    Hillary 2012

    • northwestrain says:

      Good link and reminder of just who is running the world. Not the 99.99999999999999999 %

  9. NW Luna says:

    Only Bank of America’s risk committee is as small as JPMorgan’s. Goldman Sachs’s has eight members

    The size of the risk committee doesn’t seem to keep any of those companies from risky behavior.

    • dakinikat says:

      No they don’t and that’s really a problem. It shows there’s a real problem with the corporate governance of the firm–like we didn’t know that–and that the investors should consider it a highly risky investment. The Fed should definitely been looking into this as should the SEC. We’ll see, I guess.

  10. NW Luna says:

    Haven’t heard much about the Montreal protests in the MSM. This was actually from my local paper yesterday:

    Student leaders said Monday that the tuition hike and an emergency law put in place to limit protests would have to be on the table. Students have called for a tuition freeze, but the government has ruled out that possibility.

    The French-speaking province’s average undergraduate tuition – $2,519 a year – is the lowest in Canada, and the proposed hike- $254 per year over seven years – is tiny by U.S. standards. But opponents consider the raise an affront to the philosophy of the 1960s reforms dubbed the Quiet Revolution that set Quebec apart not only from its U.S. neighbor but from the rest of Canada. Analysts have said Quebecers don’t compare their tuition rates to those in the U.S. or English-speaking Canada, but to those in European countries, where higher education is free. -snip-

    On Monday evening, protesters in Montreal held the latest of what have become nightly demonstrations, banging pots and marching through downtown streets under the watchful eye of police officers. Lawyers wearing their black robes held their own march in Montreal against the new emergency law.

    Lambert’s site has a linke to a fantastic Vimeo showing young and old in Montreal out on the streets in protest, with applause from people in buildings along the way.

    • northwestrain says:

      The Seattle Times has had amazingly good coverage. They also run a few of the NYT columnists on their opinion pages — Krugman for example.

  11. northwestrain says:

    I see that Mrs. George Bush II is championing an all female crew for one of them there underwater boats called submarines or something. Would that be the civil war era sub or something?

    Mrs. Bush is so out of touch — doesn’t she realize that segregation and back of the bus treatment of African Americans — I mean women — is so 19th century. Segregate the subs, segregate the military so boys can be boys.

    This is the 21st century and military women don’t have to be constantly on guard against sexual assault. GOP doesn’t believe rape happens and if it does — well what do the women expect anyway — boys will boys.

    Looks like Mrs. Bush’s old man is out campaigning again and he wants the women’s vote — so he put HER staff on working on an angle to make it look like he really cares about the little women.

    Next ad out by Mrs. Romney will be about how she is championing all female air crews for a few AF planes. Oh what about an all female tank crew?

    Segregation and not dealing with the issue of rape in the military is so GOP.

  12. northwestrain says:

    I have never seen so much gnashing of teeth over a vote in a presidential election. h

    There is a whole wing of the liberal dem party that could be called the Peace Party — I watch them make fools of themselves at the Prez primary caucus in my district. 0bama was their man — my god he was going to declare peace on day one and it would be so.

    Now the reality is hitting home — some are saying that 0bama’s use of drones and his assassination czar is a good thing. These are the people that the re election team is targeting. Then there are the folks that are wondering — when will the drones be turned on the US citizens — but of course this has already happened.


    scarecrow’s response:

    “I’m sorry, I don’t accept that framing. I admit there are people trying to kill us, but our priorities are upsidedown. We don’t even know whether our terrorist actions are creating more enemies faster than our technologies can kill them.

    Meanwhile, our institution are under assault right here — people are being denied the most basic rights — like the right to vote, the right to get health care, the right to have our children educated, the right to be treated with dignity in the workplace, the right not to have your wealth looted by financial elites, the right be freed for religious nutcases — people who can’t even get in the correct millenium — forcing their dogma on every one else. These are real threats that say more about the state of America than anything some supposed al Qaeda person could imagine.

    We’re causing more deaths in Mexico from our stupid drug laws than anything else. We’re poisoning our land, our water, our food. We’re killing the ocean and fisheries, bit by bit. We’re strangling the planet.

    How about we fight the real enemies of mankind for a change?”