A flat tax on fuel consumption is at the centre of France's first political debate after the government's return from summer recess. Prime Minister François Fillon is defending the fiscal measure, which promises to be a divisive issue. A tax on fuel consumption is at the centre of France's first political debate after the government's return from summer recess. Although all French parties say they support fiscal measures to curb carbon dioxide emissions and lower consumption of non-renewable energy sources, the issue is a divisive one, even within parties. Prime Minister François Fillon has defended the tax in an interview to the weekly Figaro Magazine, to be published on Saturday. Echoing President Nicolas Sarkozy's wish to implement an overarching levy to reduce France's total fuel consumption, Fillon hoped to defuse opposition to the tax among industrial groups and members of his own UMP centre-right party. "We have decided to apply this tax progressively, starting with the market price of carbon, or 14 euros" per tonne, Fillon told Le Figaro. He also reassured constituents that the tax would not go into effect until 2010.
A tax on fuel consumption is at the centre of France's first political debate after the government's return from summer recess. Although all French parties say they support fiscal measures to curb carbon dioxide emissions and lower consumption of non-renewable energy sources, the issue is a divisive one, even within parties. Prime Minister François Fillon has defended the tax in an interview to the weekly Figaro Magazine, to be published on Saturday. Echoing President Nicolas Sarkozy's wish to implement an overarching levy to reduce France's total fuel consumption, Fillon hoped to defuse opposition to the tax among industrial groups and members of his own UMP centre-right party. "We have decided to apply this tax progressively, starting with the market price of carbon, or 14 euros" per tonne, Fillon told Le Figaro. He also reassured constituents that the tax would not go into effect until 2010.
The left has been quite noisy on the fact that, as proposed, this is a highly regressive move, ie another unjust tax policy decision by Sarkozy. In the long run, we're all dead. John Maynard Keynes
PARIS -- After five years of bitter and costly litigation between the United States and Europe, the World Trade Organization is expected to deliver a report Friday intended to set limits on government support for civil aircraft makers like Boeing and Airbus. But it is coming, economists and industry analysts say, too late to make much difference. The W.T.O.'s preliminary report, analysts say, is expected to support at least part of the complaint filed in 2005 by the United States on behalf of Boeing, alleging that the European Union and its member governments funneled tens of billions of euros in illegal subsidies to the European aircraft maker Airbus over the past 40 years. The most serious charge in the U.S. case, legal experts say, involves "launch aid," the low-cost loans extended by European governments to help finance the development of new planes.
PARIS -- After five years of bitter and costly litigation between the United States and Europe, the World Trade Organization is expected to deliver a report Friday intended to set limits on government support for civil aircraft makers like Boeing and Airbus. But it is coming, economists and industry analysts say, too late to make much difference.
The W.T.O.'s preliminary report, analysts say, is expected to support at least part of the complaint filed in 2005 by the United States on behalf of Boeing, alleging that the European Union and its member governments funneled tens of billions of euros in illegal subsidies to the European aircraft maker Airbus over the past 40 years.
The most serious charge in the U.S. case, legal experts say, involves "launch aid," the low-cost loans extended by European governments to help finance the development of new planes.
Gov. John Baldacci on Tuesday declared a statewide civil emergency because of the H1N1 influenza virus, paving the way for mass immunization of Maine schoolchildren and other residents. The emergency designation protects schools and health care providers against liability claims related to their participation in school-based vaccine clinics this fall for both the seasonal flu and the H1N1 flu. "Maine has been proactive in its response to this new flu," Baldacci said in announcing the proclamation. "But as the school year begins, we must continue our vigilance, which will require a responsible and aggressive vaccination and public education campaign. It's our goal that every person in the state has access to vaccines for the seasonal and H1N1 flu." ... Schools are no more liable for injuries associated with the vaccine clinics than they would be for injuries incurred at a basketball game or other community event, [director, Maine CDC Control and PreventionDr. Dora Anne] Mills said. And while vaccine manufacturers are generally not liable for ill effects of the vaccines they produce, Mills said, the federal government does have a compensation fund for vaccine-related illnesses or injuries.... The virus is linked to one death in Maine.... Unlike the seasonal flu, H1N1 thus far has proved to be more dangerous to young people, including children, teens, pregnant women and young adults.
The emergency designation protects schools and health care providers against liability claims related to their participation in school-based vaccine clinics this fall for both the seasonal flu and the H1N1 flu. "Maine has been proactive in its response to this new flu," Baldacci said in announcing the proclamation. "But as the school year begins, we must continue our vigilance, which will require a responsible and aggressive vaccination and public education campaign. It's our goal that every person in the state has access to vaccines for the seasonal and H1N1 flu." ...
Schools are no more liable for injuries associated with the vaccine clinics than they would be for injuries incurred at a basketball game or other community event, [director, Maine CDC Control and PreventionDr. Dora Anne] Mills said. And while vaccine manufacturers are generally not liable for ill effects of the vaccines they produce, Mills said, the federal government does have a compensation fund for vaccine-related illnesses or injuries....
The virus is linked to one death in Maine....
Unlike the seasonal flu, H1N1 thus far has proved to be more dangerous to young people, including children, teens, pregnant women and young adults.
The new H1N1 swine flu virus has killed 36 U.S. children, the U.S. Centers for Disease Control and Prevention reported on Thursday. It said 67 percent of them [24.2 children] had medical conditions putting them more at risk of severe disease, such as asthma, or were disabled with conditions such as cerebral palsy, but 22 percent of the children [7.92 children] were under 5 and healthy.
It said 67 percent of them [24.2 children] had medical conditions putting them more at risk of severe disease, such as asthma, or were disabled with conditions such as cerebral palsy, but 22 percent of the children [7.92 children] were under 5 and healthy.
31 or 32 total "high risk." 5 or 4 additional "healthy" 0-18 y.o. fatalities.
The CDC said that by August 8 it had reports of 477 deaths from the pandemic H1N1 virus, including 36 children under 18. [8% of total] "In two-thirds of those [67% or 24.2], the child had at least one severe underlying illness or underlying disability ... cerebral palsy, muscular dystrophy, long-standing respiratory or cardiac problems," CDC director Dr. Thomas Frieden told reporters in a telephone briefing. "There were some children who didn't have an underlying condition and who did become severely ill, and they were generally infected also by bacteria," Frieden added.... It affects older children and young adults more than seasonal flu does, something that has concerned doctors....
"In two-thirds of those [67% or 24.2], the child had at least one severe underlying illness or underlying disability ... cerebral palsy, muscular dystrophy, long-standing respiratory or cardiac problems," CDC director Dr. Thomas Frieden told reporters in a telephone briefing.
"There were some children who didn't have an underlying condition and who did become severely ill, and they were generally infected also by bacteria," Frieden added....
It affects older children and young adults more than seasonal flu does, something that has concerned doctors....
How does the data support this conclusion?
"We are going to be trying to reach out to children in large number and parents to get kids' vaccines, because we know that so many kids can get the flu, and the vaccine is likely to be quite effective," Frieden said, adding that he would vaccinate his own children.
Obligatory celebrity endorsement, reminiscent of this season's Torchwood plot. Diversity is the key to economic and political evolution.
Maybe it dosn't support that conclusion, but after MMR vaccine scares and a variety of other vaccine panics, it may be seen that the parents of children are the hardest group to get to immunise, thus causing, if theres a mass panic about the current intection round, the biggest likely dent in herd immunity. Any idiot can face a crisis - it's day to day living that wears you out.
A breakdown in communications at the highest level between the US and the UK led to the shock collapse of the investment bank Lehman Brothers in September last year, a Guardian/Observer investigation has revealed.The downfall of Lehman, which triggered the biggest banking crisis since the Great Depression, came after a rescue bid by the high street bank Barclays failed to materialise.In London, the Treasury, the Bank of England and the Financial Services Authority all believed that the US government would step in with a financial guarantee for the troubled Wall Street bank. The tripartite authorities insist that they always made it clear to the Americans that a possible bid from Barclays could go ahead only if sweetened by US money.But in Washington, the former Treasury secretary Hank Paulson has blamed Lehman's demise on Alistair Darling's failure to let Washington know of his misgivings until it was too late. Paulson has told journalists that during a transatlantic phone call the chancellor said he was not prepared to import the American "cancer" into Britain - something Darling strongly denies.With finance ministers and central bank governors from the G20 countries meeting in London on Saturday, the first-hand accounts of those handling last year's events underline a rift between London and Washington over who was to blame for the demise of Lehman, which triggered a month of mayhem on the financial markets.
A breakdown in communications at the highest level between the US and the UK led to the shock collapse of the investment bank Lehman Brothers in September last year, a Guardian/Observer investigation has revealed.
The downfall of Lehman, which triggered the biggest banking crisis since the Great Depression, came after a rescue bid by the high street bank Barclays failed to materialise.
In London, the Treasury, the Bank of England and the Financial Services Authority all believed that the US government would step in with a financial guarantee for the troubled Wall Street bank. The tripartite authorities insist that they always made it clear to the Americans that a possible bid from Barclays could go ahead only if sweetened by US money.
But in Washington, the former Treasury secretary Hank Paulson has blamed Lehman's demise on Alistair Darling's failure to let Washington know of his misgivings until it was too late. Paulson has told journalists that during a transatlantic phone call the chancellor said he was not prepared to import the American "cancer" into Britain - something Darling strongly denies.
With finance ministers and central bank governors from the G20 countries meeting in London on Saturday, the first-hand accounts of those handling last year's events underline a rift between London and Washington over who was to blame for the demise of Lehman, which triggered a month of mayhem on the financial markets.
Oops. The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
How Did Economists Get It So Wrong? - NYTimes.com
Few economists saw our current crisis coming, but this predictive failure was the least of the field's problems. More important was the profession's blindness to the very possibility of catastrophic failures in a market economy. During the golden years, financial economists came to believe that markets were inherently stable -- indeed, that stocks and other assets were always priced just right. There was nothing in the prevailing models suggesting the possibility of the kind of collapse that happened last year. Meanwhile, macroeconomists were divided in their views. But the main division was between those who insisted that free-market economies never go astray and those who believed that economies may stray now and then but that any major deviations from the path of prosperity could and would be corrected by the all-powerful Fed. Neither side was prepared to cope with an economy that went off the rails despite the Fed's best efforts.As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. Until the Great Depression, most economists clung to a vision of capitalism as a perfect or nearly perfect system. That vision wasn't sustainable in the face of mass unemployment, but as memories of the Depression faded, economists fell back in love with the old, idealized vision of an economy in which rational individuals interact in perfect markets, this time gussied up with fancy equations. The renewed romance with the idealized market was, to be sure, partly a response to shifting political winds, partly a response to financial incentives. But while sabbaticals at the Hoover Institution and job opportunities on Wall Street are nothing to sneeze at, the central cause of the profession's failure was the desire for an all-encompassing, intellectually elegant approach that also gave economists a chance to show off their mathematical prowess.
Few economists saw our current crisis coming, but this predictive failure was the least of the field's problems. More important was the profession's blindness to the very possibility of catastrophic failures in a market economy. During the golden years, financial economists came to believe that markets were inherently stable -- indeed, that stocks and other assets were always priced just right. There was nothing in the prevailing models suggesting the possibility of the kind of collapse that happened last year. Meanwhile, macroeconomists were divided in their views. But the main division was between those who insisted that free-market economies never go astray and those who believed that economies may stray now and then but that any major deviations from the path of prosperity could and would be corrected by the all-powerful Fed. Neither side was prepared to cope with an economy that went off the rails despite the Fed's best efforts.
As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. Until the Great Depression, most economists clung to a vision of capitalism as a perfect or nearly perfect system. That vision wasn't sustainable in the face of mass unemployment, but as memories of the Depression faded, economists fell back in love with the old, idealized vision of an economy in which rational individuals interact in perfect markets, this time gussied up with fancy equations. The renewed romance with the idealized market was, to be sure, partly a response to shifting political winds, partly a response to financial incentives. But while sabbaticals at the Hoover Institution and job opportunities on Wall Street are nothing to sneeze at, the central cause of the profession's failure was the desire for an all-encompassing, intellectually elegant approach that also gave economists a chance to show off their mathematical prowess.
Chief executive officers at 20 banks that got U.S. aid received compensation 37 percent higher than the average for leaders at Standard & Poor's 500 companies and may be poised for gains as stock values rise, a study showed. Lenders including Bank of America Corp. and Wells Fargo & Co. paid CEOs an average of $13.8 million last year, topping the $10.1 million for S&P 500 leaders, according a report released today by the Institute for Policy Studies. Average CEO pay was 430 times larger than for typical workers, and at nine of 20 banks the value of stock options soared $90 million in a year, the Washington-based group said, citing proxy statements.
Lenders including Bank of America Corp. and Wells Fargo & Co. paid CEOs an average of $13.8 million last year, topping the $10.1 million for S&P 500 leaders, according a report released today by the Institute for Policy Studies. Average CEO pay was 430 times larger than for typical workers, and at nine of 20 banks the value of stock options soared $90 million in a year, the Washington-based group said, citing proxy statements.
IT Developer/Engineer III Responsibilities: Researches, designs, develops, configures, integrates, tests and maintains existing and new business applications and/or information systems solutions including databases through integration of technical and business requirements. Applications and infrastructure solutions include both 3rd party software and internally developed applications and infrastructure. Responsibilities include, but are not limited to, analysis of business requirements, coding of modifications or new program, creation of documentation, testing and maintenance of applications, infrastructure, and information systems including database management systems. Works within the Information Technology function, obtaining resources and working in support of objectives and strategies. Provides required documentation and participates in architecture reviews to ensure that the solutions comply with standards and use approved technologies. Typical customers are HP end users and various functional areas such as Supply Chain, Research and Development, Marketing, Finance, a business, or the company. Specialist: Applies developed subject matter knowledge to solve common and complex business issues within established guidelines and recommends appropriate alternatives. Works on problems/projects of diverse complexity and scope. Exercises independent judgment within generally defined policies and practices to identify and select a solution. May act as a team or project leader providing direction to team activities and facilitates information validation and team decision-making process. Ability to handle most unique situations. May seek advice in order to make decisions on complex business issues. Typically a technical Bachelor's degree or equivalent experience and a minimum of 6 years related experience or a Master's degree and a minimum of 4 years of experience.2 or more years of experience writing code (such as, and not limited to, Java, C, C++, C#, VB.Net; databases like SqlServer/ Oracle; and Testing tools. Experience of multiple full release cycles. Understanding of modern software development methodologies (Object). Understanding of modern software development tools and SCM. Understanding of Software Test methodologies, and testing tools. Strong understanding of Basic Database Administration. Qualified candidates should send resume to pattytillitt@spherion.com, please include job title. * Location: Boise * Compensation: $15-$18/hr.
Responsibilities: Researches, designs, develops, configures, integrates, tests and maintains existing and new business applications and/or information systems solutions including databases through integration of technical and business requirements. Applications and infrastructure solutions include both 3rd party software and internally developed applications and infrastructure. Responsibilities include, but are not limited to, analysis of business requirements, coding of modifications or new program, creation of documentation, testing and maintenance of applications, infrastructure, and information systems including database management systems. Works within the Information Technology function, obtaining resources and working in support of objectives and strategies. Provides required documentation and participates in architecture reviews to ensure that the solutions comply with standards and use approved technologies. Typical customers are HP end users and various functional areas such as Supply Chain, Research and Development, Marketing, Finance, a business, or the company.
Specialist: Applies developed subject matter knowledge to solve common and complex business issues within established guidelines and recommends appropriate alternatives. Works on problems/projects of diverse complexity and scope. Exercises independent judgment within generally defined policies and practices to identify and select a solution. May act as a team or project leader providing direction to team activities and facilitates information validation and team decision-making process. Ability to handle most unique situations. May seek advice in order to make decisions on complex business issues.
Typically a technical Bachelor's degree or equivalent experience and a minimum of 6 years related experience or a Master's degree and a minimum of 4 years of experience.2 or more years of experience writing code (such as, and not limited to, Java, C, C++, C#, VB.Net; databases like SqlServer/ Oracle; and Testing tools. Experience of multiple full release cycles. Understanding of modern software development methodologies (Object). Understanding of modern software development tools and SCM. Understanding of Software Test methodologies, and testing tools. Strong understanding of Basic Database Administration.
Qualified candidates should send resume to pattytillitt@spherion.com, please include job title.
* Location: Boise * Compensation: $15-$18/hr.
Contract. Diversity is the key to economic and political evolution.
Think big, young man.
On the one hand, the return on all that investment of career time and money is just three times the US minwage.
OTOH, that's a good wage in Bangalore, so where's the problem?. The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
[ ] There an agenda of the industrialists v the bankers to reassert their rightful place as the rape and pillage experts of the society?
[ ] The costs and control of money and banks has been seen as being worse than taxes and government by the rant and rave crowd?
[ ] The author, Steve Geimann, is the token liberal who isn't paid attention to (except by Melanchthon)? Never underestimate their intelligence, always underestimate their knowledge.
Frank Delaney ~ Ireland
There have been three big banking booms in modern U.S. history. The first began in the late nineteenth century, during the Second Industrial Revolution, when bankers like J. P. Morgan funded the creation of industrial giants like U.S. Steel and International Harvester. The second wave came in the twenties, as electrification transformed manufacturing, and the modern consumer economy took hold. The third wave accompanied the information-technology revolution. Each wave, Philippon shows, was propelled by the need to fund new businesses, and each left finance significantly bigger than before. In all these cases, it wasn't so much that the bankers had changed; the world had. The same can't be said, though, of the boom of the past decade. The housing bubble was unique, and uniquely awful. Each of the previous waves had come in response to a profound shift in the real economy. With the housing bubble, by contrast, there was no meaningful development in the real economy that could explain why homes were suddenly so much more attractive or valuable. The only thing that had changed, really, was that banks were flinging cheap money at would-be homeowners, essentially conjuring up profits out of nowhere. And while previous booms (at least, those of the twenties and the nineties) did end in tears, along the way they made the economy more productive and more innovative in a lasting way. That's not true of the past decade. Banking grew bigger and more profitable. But all we got in exchange was acres of empty houses in Phoenix. There's no doubt that the financial sector needs to be smaller; Philippon suggests that, given the demands of businesses for capital, a normal financial sector would be about the size it was in 1996. Besides just shrinking the industry, though, we have the harder task of making credit bubbles like the one we just lived through less likely. That will require limiting the ability of banks to rely on vast amounts of leverage, which clearly increases risk without adding social value. Many financial innovations also seem to be overrated; it's not clear that they actually help finance do its core job of channelling capital to businesses. The most important change, though, may be something harder to legislate: Wall Street needs to recognize that its proper role is, as it has been in the past, to follow the real economy, rather than trying to drive it. During the housing bubble, the financial sector essentially tried to create reality. Now's the time for it to respond to reality instead
The same can't be said, though, of the boom of the past decade. The housing bubble was unique, and uniquely awful. Each of the previous waves had come in response to a profound shift in the real economy. With the housing bubble, by contrast, there was no meaningful development in the real economy that could explain why homes were suddenly so much more attractive or valuable. The only thing that had changed, really, was that banks were flinging cheap money at would-be homeowners, essentially conjuring up profits out of nowhere. And while previous booms (at least, those of the twenties and the nineties) did end in tears, along the way they made the economy more productive and more innovative in a lasting way. That's not true of the past decade. Banking grew bigger and more profitable. But all we got in exchange was acres of empty houses in Phoenix.
There's no doubt that the financial sector needs to be smaller; Philippon suggests that, given the demands of businesses for capital, a normal financial sector would be about the size it was in 1996. Besides just shrinking the industry, though, we have the harder task of making credit bubbles like the one we just lived through less likely. That will require limiting the ability of banks to rely on vast amounts of leverage, which clearly increases risk without adding social value. Many financial innovations also seem to be overrated; it's not clear that they actually help finance do its core job of channelling capital to businesses. The most important change, though, may be something harder to legislate: Wall Street needs to recognize that its proper role is, as it has been in the past, to follow the real economy, rather than trying to drive it. During the housing bubble, the financial sector essentially tried to create reality. Now's the time for it to respond to reality instead
During the housing bubble, the financial sector essentially tried to create reality. Now's the time for it to respond to reality instead.
It would be possible for them to lead without leading the economy over a cliff were they actually concerned that the money they were lending was being used to create lasting value. What is needed are measures that will extract prohibitive costs from corporate officers and board members for activities of their institutions that squander money merely so that those worthies can be paid fees. Make lack of due diligence that leads to significant capital destruction grounds for piercing the corporate veil and going after the personal assets of the officers and board members as a means of recovery. Fat chance with the putzes now in charge. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
...the ability of banks to rely on vast amounts of leverage, which clearly increases risk without adding social value. Many financial innovations also seem to be overrated; it's not clear that they actually help finance do its core job of channelling capital to businesses. The most important change, though, may be something harder to legislate: Wall Street needs to recognize that its proper role is, as it has been in the past, to follow the real economy, rather than trying to drive it.
It would be possible for them to lead without leading the economy over a cliff were they actually concerned that the money they were lending was being used to create lasting value.
As a stockholder in BigBank, I want return. I demand return. If, along the way, the marketing department has to buy the paint for the local charter school, so be it, but I want a positive return even for that. If I have to pay BiggusDickus $100 million, I don't care (and let's face it, I understand that a dollar doesn't really go so far in the Mediterranean yacht world anymore), as long as my return is ComingTheFuckInTM.
So, "adding social value", "channeling capital", "follow the real economy" and "create lasting value" can be part of your faith-based-christ-on-a-cross-to-save-us-from-our-sins reality, but in my world we go out and squash the butterfly in the Pacific that causes those hurricanes. Never underestimate their intelligence, always underestimate their knowledge.
I have a retirement fund to think about and not too many years to get it sustainable. As a stockholder in BigBank, I want return. I demand return.... but in my world we go out and squash the butterfly in the Pacific that causes those hurricanes.
As a stockholder in BigBank, I want return. I demand return.... but in my world we go out and squash the butterfly in the Pacific that causes those hurricanes.
But watch the insider trading...they are selling now like they did the last time...hard rain a gonna come...sell high, buy back in low. Never underestimate their intelligence, always underestimate their knowledge.
Lord Turner, the head of the UK's Financial Services Authority, is my new hero. He is willing to tell banks to do things that are in the public's best interest but are singularly unpleasant and costly to the financiers. The fact that what is good for the banksters is increasingly at odds with what is desirable for the rest of us simply highlights how predatory the industry has become, and how the incumbents are pathologically unable to see that (I may be being charitable in taking their wounded-sounding protests at face value) Last week, he stirred up a hornet's nest by suggesting the unthinkable, namely, that the financial services industry needs to shrink. In reality, quite a few people have made that observation, but anyone in authority who dares say such a thing out loud must be beaten back. -Skip- The reason for the howls of protest, however, is more immediate: financial firms often have complex structures either to minimize taxes or circumvent regulations. So they would not only face the cost of restructuring, but higher ongoing expenses. How horrid. Those banks have an absolute right to their profits, or at least that's what they expect us to believe. Even if Turner is catching a lot of flack, he is at least willing to stare down the industry. The financial services sector is even more important to England than to the US, but they also have been longer at the empire and banking game than we have, and as a result, at least some recognize the importance of having sound institutional structures. We have completely lost the plot in the US. While Timothy Geithner is giving lip service to having banks draw up resolution plans, every measure the Treasury has proposed had either been bank-friendly from the get-go, mere posturing, or half hearted and easily beaten back. The Turner discussion of the need to simplify legal structures reveals what a serious version of wind-down plan would need to include, and it is a virtual certainty nothing of the sort will be required in the US.
Last week, he stirred up a hornet's nest by suggesting the unthinkable, namely, that the financial services industry needs to shrink. In reality, quite a few people have made that observation, but anyone in authority who dares say such a thing out loud must be beaten back.
-Skip-
The reason for the howls of protest, however, is more immediate: financial firms often have complex structures either to minimize taxes or circumvent regulations. So they would not only face the cost of restructuring, but higher ongoing expenses. How horrid. Those banks have an absolute right to their profits, or at least that's what they expect us to believe.
Even if Turner is catching a lot of flack, he is at least willing to stare down the industry. The financial services sector is even more important to England than to the US, but they also have been longer at the empire and banking game than we have, and as a result, at least some recognize the importance of having sound institutional structures. We have completely lost the plot in the US. While Timothy Geithner is giving lip service to having banks draw up resolution plans, every measure the Treasury has proposed had either been bank-friendly from the get-go, mere posturing, or half hearted and easily beaten back. The Turner discussion of the need to simplify legal structures reveals what a serious version of wind-down plan would need to include, and it is a virtual certainty nothing of the sort will be required in the US.
Investors who believe that major credit-rating firms should be held responsible for their disastrously optimistic ratings of subprime-mortgage bonds have won at least an interim victory. U.S. District Judge Shira Scheindlin in New York ruled late Wednesday that Moody's Investors Service and Standard & Poor's can't invoke the 1st Amendment to hide from subprime-related legal challenges. The decision triggered heavy selling of shares of Moody's parent Moody's Corp. and S&P parent McGraw-Hill Cos. on Thursday. Moody's slid $1.84, or 7%, to $24.26. McGraw-Hill's shares tumbled $3.30, or 10.2%, to $29.01. From Bloomberg News: Scheindlin rejected the firms' arguments that investors can't sue over deceptive ratings of private-placement notes because those opinions are protected by free-speech rights. The decision forces S&P, Moody's and Morgan Stanley, which was also sued, to respond to fraud charges in a class-action by investors claiming the raters hid the risks of securities linked to subprime mortgages. Defaults on the debt ignited a credit crisis that has led to more than $1.6 trillion in writedowns and losses since the start of 2007. "The fate of the major rating companies may be determined by the courts rather than Congress or regulators," said Jerome Fons, a New York-based consultant and former Moody's managing director for credit policy who left the firm in August 2007. "There are so many suits outstanding, if they lost a major case all bets are off. The floodgates will be open." Some investors on Thursday were fearing the worst: Trading volume in Moody's and McGraw-Hill soared as the shares plunged. "It's the first major ruling upholding fraud allegations against an arranger and the rating agencies on the instruments that are at the heart of the financial crisis," Patrick Daniels, a lawyer at Coughlin Stoia Geller Rudman Robbins LLP, the San Diego-based securities litigation firm that represented investors in the case, told Bloomberg.
The decision triggered heavy selling of shares of Moody's parent Moody's Corp. and S&P parent McGraw-Hill Cos. on Thursday. Moody's slid $1.84, or 7%, to $24.26. McGraw-Hill's shares tumbled $3.30, or 10.2%, to $29.01.
From Bloomberg News:
Scheindlin rejected the firms' arguments that investors can't sue over deceptive ratings of private-placement notes because those opinions are protected by free-speech rights. The decision forces S&P, Moody's and Morgan Stanley, which was also sued, to respond to fraud charges in a class-action by investors claiming the raters hid the risks of securities linked to subprime mortgages. Defaults on the debt ignited a credit crisis that has led to more than $1.6 trillion in writedowns and losses since the start of 2007. "The fate of the major rating companies may be determined by the courts rather than Congress or regulators," said Jerome Fons, a New York-based consultant and former Moody's managing director for credit policy who left the firm in August 2007. "There are so many suits outstanding, if they lost a major case all bets are off. The floodgates will be open."
The decision forces S&P, Moody's and Morgan Stanley, which was also sued, to respond to fraud charges in a class-action by investors claiming the raters hid the risks of securities linked to subprime mortgages.
Defaults on the debt ignited a credit crisis that has led to more than $1.6 trillion in writedowns and losses since the start of 2007.
"The fate of the major rating companies may be determined by the courts rather than Congress or regulators," said Jerome Fons, a New York-based consultant and former Moody's managing director for credit policy who left the firm in August 2007. "There are so many suits outstanding, if they lost a major case all bets are off. The floodgates will be open."
Some investors on Thursday were fearing the worst: Trading volume in Moody's and McGraw-Hill soared as the shares plunged.
"It's the first major ruling upholding fraud allegations against an arranger and the rating agencies on the instruments that are at the heart of the financial crisis," Patrick Daniels, a lawyer at Coughlin Stoia Geller Rudman Robbins LLP, the San Diego-based securities litigation firm that represented investors in the case, told Bloomberg.
