Senator Chris Dodd, Chairman of the Senate Banking, Housing and Urban Affairs Committee put an amendment in the recently passed so called “Economic Recovery Legislation” that could very negatively affect the banking system’s ability to effectively address today’s credit issues.  This could have the very opposite effect of the stated intention of the final action taken by Congress.

The amendment was put in the bill at the last minute without any debate.  It states that financial institutions who received $500 million or more in TARP money will not be allowed to pay “bonuses” to any of the top 25 earners in a company that exceeds one third of one’s total compensation, including benefits.  And the legislation is retroactive for companies receiving TARP funds last fall.  It turns out that the administration was opposed to the amendment but it was left in and President Obama signed the bill.  It is unclear if …

While I am confident that all of these great minds will ultimately come up with some spaghetti that sticks to the refrigerator, I remain concerned these “solutions” are focusing on the waves hitting the shores rather than the storm. The equity infusions were made; the government continues to facilitate market activity through liquidity measures and should continue to do so.  The source remains the mortgage market; the depreciation of home prices in the U.S. and abroad. 

I am a student of the broader markets and specifically of financial institutions and have been for more than a decade and a half.  I have been studying the proposals of the solutions to this economic downturn.  …

So, just when we thought chicken-little was still crowing, Wells Fargo scoops up ALL of Wachovia from the palm of Citigroup. In my view, this deal is a critical turning point. It’s a turning point primarily because it’s a view by a well regarded, well respected management team that the value of the WB franchise was more than perceived by a competitor, without government assistance. With this offer, WFC set a floor for those assets, which is above what the prior bid was and this is important, as until now, the direction of pricing was south NOT north.

An intriguing point to note within this deal structure is that Berkshire is the largest shareholder of Wells Fargo.  Mr. Buffett, a re-known value buyer has gotten knee-deep in financials over the last few weeks.  Most recently Goldman Sachs raised $10B, $5B in perpetual preferred to Berkshire with a 10% dividend and an …

I firmly believe it is time for the business leaders, the entrepreneurs, the visionaries to take back the reigns of their companies’ from the accountants!  For as long as I can remember, business leaders have pursued long term goals, laid out 3-5 year business plans for their respective Board’s of Directors and at times, cursed the scrutiny of “going public” primarily because it forced them to think and more importantly, act on a short term, that is, quarterly basis.  I’ll save the woes of being a public company for another time.  Many CEO’s are likely looking back to those time as “the good ‘ole days.”

This week I was struck by the awareness of the CNBC commentators as they realized through an interview with a sells-side analyst that the financial institutions’ management teams had accounting limitations placed upon them as to what and when they could or could not write-down assets!  Now, perhaps …