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Here’s a video of Congressman yelling at the SEC officials today.
Looking back at this exchange, it was rather cathartic to hear, but probably not very helpful in the scheme of things. But then again, having the SEC stooges testify today was not very helpful either.
Thank you Congressman Ackerman. Thank you for excoriating the bumbling SEC idiots. Hopefully there will be some video of his questions.
Also, I learned that one of the testifying SEC officials, Lori Richards, recused herself from the Madoff investigation because a former employee she supervised had married Madoff’s niece, and Richards was at the wedding!
After listening to the testimony today, I feel there must have been some sort of cover-up in regards to the Madoff investigation if the SEC officials were telling the truth about their level of competency and commitment to uncovering fraud and protecting investors.
Before this country starts to recover economically, people must regain confidence in those who are running and regulating the financial industry. I believe confidence will only come back when the heads of professionals and regulators start to roll in a very public way.
Mr. Markopolos’s suggestions should be put into effect immediately. I would also double the minimum level of punishment for those found guilty of stealing money or helping to steal money from investors.
I’m currently watching the Markopolos testimony. It’s extremely interesting. Here are some quick points by Markopolos with which I concur very much. Basically, Markopolos is saying the SEC has failed horribly due to a combination of incompetence and a fear of taking on the big wall street players. The SEC lacks highly paid, highly trained, and highly incentivized professionals. Without the true professionals that are only attracted by high salaries and incentives, the SEC is not capable of catching fraudsters.
Markopolos has three basic recommendations on how to reform the SEC. First, replace all the senior staff. Second, goto the bottom of the staff and and replace them with experienced, highly compensated professionals. Markopolos wants to see a lot of grey hair in the regulatory ranks. Third, create a centralized office for whistleblowers and compensate those whistleblowers who come forward. Markopolos feels compensation for whistleblowers to come forward is necessary because they are blacklisted in the financial industry after they become whistleblowers.
Markopolos’s recommendations are absolutely sensible to me, however I have trouble believing Congress will be able to pass meanginful legislation that would increase funding for financial regulatory agencies. To attract experienced professionals, it seems that it will take large six figure salaries, and I’m not sure that voters and politicians would allow this.
Last November, taking inspiration from Graham and Dodd, I started my Liquidation Portfolio, a fake portfolio that tracks a basket of 23 stocks I estimated were trading at large discounts to their liquidation value. It’s been almost three months and I think the results are very satisfactory.
Since inception, my Liquidation Portfolio has returned 2.88% versus a return of -7.59% for the S&P 500, which means the Liquidation Portfolio is beating the S&P by 10.47. I wonder what the returns will look like in another nine months?
I never knew you can find gold in poo – literally:
TOKYO (Reuters) – Resource-poor Japan just discovered a new source of mineral wealth — sewage.
A sewage treatment facility in central Japan has recorded a higher gold yield from sludge than can be found at some of the world’s best mines. An official in Nagano prefecture, northwest of Tokyo, said the high percentage of gold found at the Suwa facility was probably due to the large number of precision equipment manufacturers in the vicinity that use the yellow metal. The facility recently recorded finding 1,890 grammes of gold per tonne of ash from incinerated sludge.
That is a far higher gold content than Japan’s Hishikari Mine, one of the world’s top gold mines, owned by Sumitomo Metal Mining Co Ltd, which contains 20-40 grammes of the precious metal per tonne of ore.
I’ve been reading for the past couple weeks about the real estate industry and the general sentiment I identified is that there is still more pain to come, especially with the commercial real estate sector. Retailers are not able to sell their products and are not able to keep up with rent.
Another consideration is that there is now a growing trend that REITs are paying their dividends in STOCK, not cash. I am very wary of any company that starts to pay dividends in stock rather than cash. It seems to me that when a compay starts doing that, they are in dire trouble.
So, after identifying what I think is the general sentiment (more of the pain train is still coming for commercial real estate) and the fact that REITs are paying dividends in stock, I initiated a position in SRS, an etf from Proshares that shorts the real estate sector. Then, Simon’s Property Group (SPG) last week reported that they would be paying their dividend in stock. SPG is the country’s largest mall and shopping center operator. I doubled my SRS position upon this news.
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