Views, Thoughts, and Suggestions on Recent Items in the News

And. unless and until we are willing to manage humanity to a “zero net impact” on our environment and ecology, there is  limited ability to change the impact of evolving species, whose habitats have been harmed by society, or whose accidental introduction into new areas is a product of man’s indifference and lack of consideration, caution, or consequence.

Judges Appearance of Impropriety leads to Supreme Court Recusal Decision

In a 5-4 decision, the Supreme Court forced a lower Appeals Court to reconsider a decision, which because of one of the Appeals court Judge’s election campaign receipt of over three million dollars from the principle party- in- interest in the case, was deemed to present “the appearance, and therefore the unacceptable risk of favoritism requiring recusal” (I’m paraphrasing). Correctly rendered in my opinion. Although we may expect more such suits by aggrieved parties. I’m waiting for the suit which claims a refund based on “I paid the guy, and he didn’t give it up. I want my money back.”

Wall Street changes To Whine Street

Here we go. The financial marketplace, everything from S&Ls to Banks, Insurance companies to Investment Banks, Hedge firms to Venture Capitalists, are all paying huge sums to lobbyists, some executives even lobbying themselves, in an effort to prevent strong regulation by a centralized financial markets authority, instead preferring the the pick-and-choose type of regulation that some enjoy. Many would prefer self-regulation in spite of what the lack or regulatory oversight has allowed.

You saw it hear first: Required Equity Capital must increase as financial enterprise size increases.

Minimum of five percent up to Five Billion in size; six percent at Ten Billion, Seven Percent at Fifteen Billion and so on up to Ten Percent up to Fifty Billion. Then Fifteen Percent at fifty to one hundred billion; twenty percent at one hundred Billion to two hundred and fifty Billion, and Twenty Five Percent at two hundred and fifty Billion and up.

In addition, No one class of investments can exceed five percent of invested equity capital, and institution bond debt cannot exceed the equity capital. Financial products underwritten by financial enterprises must carry a reserve against default of five percent minimum up to One Billion, and Ten Percent for underwritings higher than One Billion. Such reserves must be owned in the issuer’s own account.

That will work, and if increased capital reduces the “shoot the moon” attitudes of traders, speculators, and financial engineers, well, I vote yes. They can still make a ton of money (financial institutions have led any segment of the economy for a generation in total profits), and they should, Over-leveraged risk is out, prudent risk management and at-risk personal capital is in, or should be.