As the ethical transgressions of various members of the business community come to light as a consequence of the Wall Street fiasco, I thought that this would be of interest to readers. This is from the Crane and Matten blog:
Crane and Matten blog: Institutionalizing CSR through B Corporations
Monday, March 15, 2010
Saturday, March 13, 2010
U.S. bankruptcy-court investigation of the collapse of Lehman Brothers Holdings Inc.
It appears that the blogosphere has put a bear hug on the Lehman bankruptcy estate auditors report. (see below). The greed, negligence and malfeasance that occurred at Lehman screams for finance reform--reform that thoroughly addresses subjects such as accountability, transparency and responsibility. Unfortunately, with lobbyists calling the shots in Washington it is doubtful that anything genuine or tangible will get accomplished. Having Wall Street lobbyists as the de facto legislators is akin to a drug dealer driving a crack addict to a Narcotics Anonymous meeting.
More from Jesse's Cafe American and Naked Capitalism
More from Jesse's Cafe American and Naked Capitalism
Friday, March 12, 2010
21st CENTURY BREAKDOWN
This essay by James Quinn of Financial Sense is interesting. It compliments the generational discoveries of Neil Howe and William Strauss--authors of Millennials Rising: The Next Great Generation (2000) and The Fourth Turning. (1997) Both this essay and the books mentioned should be requisite reading for all politicians and CEO's.
21st Century Breakdown: by James Quinn
21st Century Breakdown: by James Quinn
Lehman execs, auditor blamed for company's collapse - The Globe and Mail
As the dust settles from the financial tempest of 2008 it is becoming apparent that blame cannot justifiably be assigned to any one party--although the actions of the Clinton Administration and HUD seem to bare the brunt of the condemnation from critics and apologists for laissez-faire ideology. Like the Enron scandal, it is becoming apparent that many parties were complicit in the actions that led to the near systemic collapse of the financial system.
The recent findings of the court-appointed examiner of the Lehman debacle found that trick accounting--not unlike Enron-- and deceptive valuation practices for their alchemic portfolios led to exasperating the disaster that was brewing beneath the surface of Wall Street. The examiner, Anton Valukas, stated that while some of Lehman's management's decisions “can be questioned in retrospect” and the firm's valuation procedures for its assets “may have been wanting,” those responsible for the firm had used their business judgment and were largely not liable for the firm's collapse. But in a contradictory manner he goes on to say that the Lehman bankruptcy estate creditors could have claims against --Dick Fuld and chief financial officers Chris O'Meara, Erin Callan and Ian Lowitt.
It is interesting that, like Enron and the Credit Rating scandal, two essential bulwarks of the financial system were debased.
In both these cases--as has become common in our society--the spirit of the law is largely ignored while the letter of the law is manipulated by contemptible 'wordsmiths'
The time has come for 'the authorities' to quit attempting to assign blame, ostensibly to divert accountability and responsibility from themselves, and to make an attempt at restructuring the regulatory apparatus to reflect the changes that have taken place in the mechanics of finance. However any effort will prove to be feckless and ineffectual unless the presence of both intellectual and moral virtue is established and nurtured in the character of those that will lead capitalism out of its self imposed dark ages.
It is quite possible that a financial tempest of greater pugnacity is on the horizon--if so and the lessons from 2008 are not heeded, the power of capitalist dynamics will not be so forgiving.
Lehman execs, auditor blamed for company's collapse - The Globe and Mail
The recent findings of the court-appointed examiner of the Lehman debacle found that trick accounting--not unlike Enron-- and deceptive valuation practices for their alchemic portfolios led to exasperating the disaster that was brewing beneath the surface of Wall Street. The examiner, Anton Valukas, stated that while some of Lehman's management's decisions “can be questioned in retrospect” and the firm's valuation procedures for its assets “may have been wanting,” those responsible for the firm had used their business judgment and were largely not liable for the firm's collapse. But in a contradictory manner he goes on to say that the Lehman bankruptcy estate creditors could have claims against --Dick Fuld and chief financial officers Chris O'Meara, Erin Callan and Ian Lowitt.
It is interesting that, like Enron and the Credit Rating scandal, two essential bulwarks of the financial system were debased.
- The notion of fiduciary duty was abused and exercised in an irresponsible manner.
- The duties of the firm's auditors had been carried out in a “negligent” manner and that Lehman could pursue claims against the firm for “professional malpractice.”
In both these cases--as has become common in our society--the spirit of the law is largely ignored while the letter of the law is manipulated by contemptible 'wordsmiths'
The time has come for 'the authorities' to quit attempting to assign blame, ostensibly to divert accountability and responsibility from themselves, and to make an attempt at restructuring the regulatory apparatus to reflect the changes that have taken place in the mechanics of finance. However any effort will prove to be feckless and ineffectual unless the presence of both intellectual and moral virtue is established and nurtured in the character of those that will lead capitalism out of its self imposed dark ages.
It is quite possible that a financial tempest of greater pugnacity is on the horizon--if so and the lessons from 2008 are not heeded, the power of capitalist dynamics will not be so forgiving.
Lehman execs, auditor blamed for company's collapse - The Globe and Mail
Thursday, March 11, 2010
Escape Plan: Socialize your idiocy
If this is a precursor to financial reform in the USA perhaps it is time to abandon any hope that lawmakers will ever do the right thing.
"Money doesn't talk--it swears" Bob Dylan: It's alright Ma
Jesse's Café Américain: Investors Who Lost In Madoff and Stanford Schemes Want Government to "Make Them Whole"
"Money doesn't talk--it swears" Bob Dylan: It's alright Ma
Jesse's Café Américain: Investors Who Lost In Madoff and Stanford Schemes Want Government to "Make Them Whole"
Wednesday, March 10, 2010
The Invisible Hand at work.
The inherit function of the capitalist paradigm to find balance (harmony) is being validated during the recovery from the 'money lender' driven panic investors endured last year. Expectations of "The West" have become more prudential--albeit somewhat vigorously for many individuals--while our Asian counterparts are becoming increasingly perturbed with regard to wages and both working and social conditions. As the video indicates, the consequences of the One Child policy initiated by the Chinese are coming home to roost.
The nascent generation of Chinese are no longer prepared to work for low wages and austere working conditions. This 'generational turning' is used to getting what it wants--not impeded by competitive siblings. In the West on the other hand the new generation will be forced to lower expectations since much of their wealth has been effectively confiscated by the Wall Street bail out and ancillary stimulus package.
One generation--one from the East--one from the West--being compelled by free market forces that manifested as result of each societies diametric ethos.
One is to wonder what our politicians will do now to inhibit the natural corrective mechanism of the free market.
The invisible 'hand' works in wondrous ways.
The nascent generation of Chinese are no longer prepared to work for low wages and austere working conditions. This 'generational turning' is used to getting what it wants--not impeded by competitive siblings. In the West on the other hand the new generation will be forced to lower expectations since much of their wealth has been effectively confiscated by the Wall Street bail out and ancillary stimulus package.
One generation--one from the East--one from the West--being compelled by free market forces that manifested as result of each societies diametric ethos.
One is to wonder what our politicians will do now to inhibit the natural corrective mechanism of the free market.
The invisible 'hand' works in wondrous ways.
Monday, March 8, 2010
Iceland Voters Reject Bank Bailouts in Crushing Electoral Defeat; Neo-Liberalism In Context
The market implosion of 2007-2008 effectively demonstrated the contempt that neo-liberal democracies have for the individual. However, in a recent referendum Icelanders rejected by a massive majority a bill that would saddle each citizen with $16,400 of debt in protest at U.K. and Dutch demands that they cover losses triggered by the failure of a private bank. Several Icelandic banks fell victim to the collateralized mortgage obligation and credit default swap fiascoes that rocked financial markets in 2007-2008. It is encouraging to see that the citizens of this democratic nation had the opportunity and the mettle to stand up to the shenanigans of the corporate elite and their politician sycophants.
Jesse's Café Américain: Iceland Voters Reject Bank Bailouts in Crushing Electoral Defeat; Neo-Liberalism In Context
Bloomberg
Jesse's Café Américain: Iceland Voters Reject Bank Bailouts in Crushing Electoral Defeat; Neo-Liberalism In Context
Bloomberg
Thursday, March 4, 2010
Monday, March 1, 2010
Saturday, February 27, 2010
Monday, February 15, 2010
Monday, January 11, 2010
Wednesday, January 6, 2010
Thursday, December 24, 2009
How Goldman secretly bet on the U.S. housing crash | McClatchy
Here is some interesting reading for the holidays. This article makes one wonder about accountability and conflict of interest on Wall Street.
Have a Merry Christmas and a Prosperous New Year.
How Goldman secretly bet on the U.S. housing crash McClatchy
Have a Merry Christmas and a Prosperous New Year.
How Goldman secretly bet on the U.S. housing crash McClatchy
Tuesday, December 15, 2009
Wednesday, December 9, 2009
Thursday, December 3, 2009
Gold & Harmonic Price Confluence
* right click the chart for a larger view in a new tab or window *
SPOT GOLD 1975-2009: The chart shown above indicates that there is a confluence of price harmonics @ the 1240-1260 area.
Price:
1.50X 1976 low -1980 high $1242
1.618X 1980 high -1999 low $1238
2.00X 1999 low - 2006 high $1208
1.272X 1999 low - 2008 high $1246
1.618X 2008 high - 2008 low $1252
The orange fan lines emanating from the 1976 low and touching various high and low pivots between 1980 and 1990 have indicated support and resistance during the bull market from 1999. There is a 3 point fan-line indicating resistance in the 1225-1250 area.
The gold market is becoming overbought and could find substantial resistance just above the recent price of 1220.
Thursday, November 26, 2009
Thursday, November 12, 2009
The Failure of Business Schools.
Aristotle distinguishes between two categories of virtue: intellectual and moral. These virtues are differentiated in line with his perception of the soul. Intellectual virtue includes scientific knowledge (episteme), technical understanding (techne), intuitive reason and practical and philosophic wisdom. Business schools tend to concentrate on episteme and techne in order to inculcate students with the most up to date tools in which to enter a competitive and profit oriented social paradigm. The intellectual virtues acquired are a consequence of teaching and can only blossom through experience, whereas moral virtue is acquired by habituation. The exercise of intellectual virtue allows us to make choices that are based on understanding, practical wisdom and good sense—resulting in judgments that are fair and equitable. Intellectual virtues are required to allow for the habituation of moral virtue which in turn facilitates actions that are aimed towards attainment of an end which all men have in common—happiness (eudemonia). Rational deliberation using the intellectual virtues and actions that incorporate moral virtue are the means by which this end is attained. I believe this is where our education system—not exclusively business schools—fail to indoctrinate students towards recognizing the teleological nature of mankind.
In his critique of modernity MacIntyre (1984) points out that society has lost the concept of a teleological purpose to life and, in lieu of pursuing eudaimonia, has directed the actions of man towards a tainted and shortsighted goal—one directed towards the fulfillment of self-interest with little or no consideration directed towards the community. The cultural milieu of emotivism has produced a society where moral judgment is not grounded n any rational method but merely results from the projection of personal preferences in the most convincing of manners. Emotivism can be best understood by the embodiment of what is the moral life through the roles archetypal characters play in society. MacIntyre utilizes three typical characters to present his argument: the rich aesthete, the manager and the therapist. It is in the role of manager that we find the rationale of producing graduates of business schools. “The manager represents in his character the obliteration of the distinction between manipulative and non-manipulative social relations” (MacIntyre 1984: 30). The manager treats ends as given, concentrating his intellectual skills on technique and effectiveness.
While business schools have excelled at producing graduates that demonstrate competence in engineering investment products based on complex mathematical models (derivatives, ETFs, Swaps etc.) and implementing their exceptional ability at marketing and optimizing productivity, little has been done to enlighten the student as to how to use his/her acquired intellectual virtues in a manner which promotes morality. Although students leave the university environment excelling with intellectual resources, there is no attempt being made to demonstrate how these attributes can be used to habituate excellence of character that serve to better oneself and the community. Business schools tend to minimize their responsibility to indoctrinate students with a sense of moral obligation or a proclivity towards the pursuit of moral excellence. Since business practices take place within a corporate community, business ethics education should focus on the role and responsibilities of an individual within such a community. Although it can be argued that ethics cannot be ‘taught’—it is a cop-out that virtue cannot be taught. It is the connection between intellectual virtue and moral virtue that our business schools have chosen to shirk.
I believe that professors of business ethics provide an essential aspect to the education of future captains of industry and that the subject of business ethics should be taken much more seriously by those who are responsible for the determination of the curriculum at business schools. Too often business ethics courses are considered by students to be an annoying but necessary elective that is required for graduation. Practical reasoning and business ethics should be requisite courses at all business schools and the importance of them should be stressed so as to compel the student to comprehend the vital connection between intellectual virtue and moral virtue.
In his critique of modernity MacIntyre (1984) points out that society has lost the concept of a teleological purpose to life and, in lieu of pursuing eudaimonia, has directed the actions of man towards a tainted and shortsighted goal—one directed towards the fulfillment of self-interest with little or no consideration directed towards the community. The cultural milieu of emotivism has produced a society where moral judgment is not grounded n any rational method but merely results from the projection of personal preferences in the most convincing of manners. Emotivism can be best understood by the embodiment of what is the moral life through the roles archetypal characters play in society. MacIntyre utilizes three typical characters to present his argument: the rich aesthete, the manager and the therapist. It is in the role of manager that we find the rationale of producing graduates of business schools. “The manager represents in his character the obliteration of the distinction between manipulative and non-manipulative social relations” (MacIntyre 1984: 30). The manager treats ends as given, concentrating his intellectual skills on technique and effectiveness.
While business schools have excelled at producing graduates that demonstrate competence in engineering investment products based on complex mathematical models (derivatives, ETFs, Swaps etc.) and implementing their exceptional ability at marketing and optimizing productivity, little has been done to enlighten the student as to how to use his/her acquired intellectual virtues in a manner which promotes morality. Although students leave the university environment excelling with intellectual resources, there is no attempt being made to demonstrate how these attributes can be used to habituate excellence of character that serve to better oneself and the community. Business schools tend to minimize their responsibility to indoctrinate students with a sense of moral obligation or a proclivity towards the pursuit of moral excellence. Since business practices take place within a corporate community, business ethics education should focus on the role and responsibilities of an individual within such a community. Although it can be argued that ethics cannot be ‘taught’—it is a cop-out that virtue cannot be taught. It is the connection between intellectual virtue and moral virtue that our business schools have chosen to shirk.
I believe that professors of business ethics provide an essential aspect to the education of future captains of industry and that the subject of business ethics should be taken much more seriously by those who are responsible for the determination of the curriculum at business schools. Too often business ethics courses are considered by students to be an annoying but necessary elective that is required for graduation. Practical reasoning and business ethics should be requisite courses at all business schools and the importance of them should be stressed so as to compel the student to comprehend the vital connection between intellectual virtue and moral virtue.
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