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Dec 15th, 2008
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Useless, utterly useless

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http://en.wikipedia.org/wiki/Sarbanes-Oxley_Act

I mean, wasn't that supposed to stop all the financial nonsense in the US?
Don't be stupid, it's the wrong tool for the wrong job. Rushed through in some half-assed attempt to show the media they were doing something.
The few $Bn which the likes of Enron etc were caught for are mere pocket-change compared to the amounts now being thrown about.

"The Architect: The first matrix I designed was quite naturally perfect. It was a work of art. Flawless. Sublime. A triumph only equaled by its monumental failure. "
Yup, SOX is a monument all right.

FFS, first the global meltdown of lend-happy banks causing a cascade through the entire system.

Then Bernard 'Made-off' with all my money creeps out of the woodwork with another $50BN in another britney-esque "oops, I did it again" moment.

No doubt, too busy measuring the height of the waves at the shore to bother looking up to see the big f.....g tsunami heading for them.
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Dec 16th, 2008
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Re: Useless, utterly useless

yeah quite a few european banks and charities have been caught out
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Dec 17th, 2008
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Re: Useless, utterly useless

The US Sarbanes-Oxley Act of 2002 (SOX) mandates what is effectively a systems engineering solution to the problem of how to control theft from the inside. Reliability is achieved not by human oversight alone, but by a set of information and control systems that ensures information quality and management accountability. Executive officers are required to sign the accounts and are criminally liable for any inaccuracy. The act also mandates near-real-time disclosure of any material events.

In the past, reliability was equated with the moral character of the directors and auditors. Nowadays, reliability must be seen as an engineering problem.

Cursing SOX for not being perfect or not catching crimes that the stupid SEC had been warned about for years is pointless - just like my pointing out how well the Libertarian philosophy is supported by the current meltdown. I am sure that deregulation would have done a much better job of stopping the embezzlement.
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Dec 18th, 2008
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Re: Useless, utterly useless

Madoff and the Failure of the SEC
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Dec 18th, 2008
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Re: Useless, utterly useless

Quote ...
This is a perfect case study showing that the SEC is incapable of protecting investors as well as free-market institutions can. The SEC is becoming increasingly irrelevant and people are beginning to take notice. It failed to save investors from the house of cards made up of mortgage-backed securities, credit default swaps, and collateralized debt obligations that resulted from the housing bubble. Now it has failed to protect thousands more individuals and charities from something as simple and old as a Ponzi scheme!
Er, where does it show us that the free market can protect us? Bushie free-marketeers running the SEC were what screwed us. Gutting the SEC, then blaming the SEC for not catching the problem does not show the success of the free market system nor does saying that the free market saw it - neither stopped it from happening.
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Dec 19th, 2008
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Re: Useless, utterly useless

Click to Expand / Collapse  Quote originally posted by GrimJack ...
Er, where does it show us that the free market can protect us?
In the paragraph immediately above the one you quoted.

Various snippings...
Quote ...
Legislate in Haste, Repent at Leisure
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As a result of Sarbanes-Oxley, new SEC regulations, and changes to exchange listing requirements, public middle-market companies expect compliance costs to increase by almost 100 percent.
Quote ...
Is Deregulation to Blame?
The new Washington consensus says "yes." The facts on the ground say something different.
Quote ...
Misunderstanding Deregulation
Henry Manne sent along this email, which I thought worth passing along:
Quote ...
Tyler Cowen recommended a blogger who said:
Quote ...
“Back in April 2004 the SEC voted to loosen the capital rules for the five biggest Wall Street investment banks. In retrospect, this was a very bad idea indeed, and it was a bad idea for precisely the reasons that have caused our financial problems to become so dire: it allowed leverage to skyrocket unsustainably and lending standards to deteriorate.”
I take it that this is the crux of the argument that deregulation is at the heart of the current meltdown. But isn’t there something peculiar about this “deregulation?” Isn’t it really a case of a price-fixing regulator who made a big error, as they are prone to do. The leverage still skyrocketed because all that crappy paper forced or encouraged into the market by the FMs and bank regulators was out there and looking government insured. To call this a problem of deregulation is, I think, quite a stretch. If we call every industry-serving change in regulation “deregulation,” it seems to me that we have taken all the meaning out of the term. I suspect that the enemies of deregulation are just trying to hitch a cheap ride.
Complete agreement here.
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Dec 19th, 2008
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Re: Useless, utterly useless

In more bone-headed moves, I see that the proposal for "saving" the US car industry is for merging 3 into 2.

The problem with lumbering dinosaurs is that they're neither reactive, nor competitive. All a merger will achieve is that they'll fail more slowly on the next guy's watch.

All 3 of them should be broken up into a dozen parts, and each made to fend for themselves. Sure some will die, but the others will emerge stronger for it. Plus you'll actually have an industry that will be capable of delivering what the market actually wants, not some marketroids "lowest common denominator".
Either that, or get used to watching fossilisation in slow motion.

If 1 bank fails out of a pool of 100, then the market as a whole isn't going to be overly worried. Consumer protection schemes can kick in and are generally able to cope.

Now take 5 monoliths, all busy swapping debt with one another so nobody knows what the hell is happening. One falls, and the other 4 are in deep shit.

If the internet has taught us anything (which apparently it hasn't), is that highly distributed and autononmous systems are very resilient to all sorts of crap which might come their way. Sure there's plenty of scope for local problems, but the system as a whole endures.

If something gets to the point where it's "too big to fail", then it's too big by definition.
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Dec 19th, 2008
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Re: Useless, utterly useless

From what I read this morning Ford doesn't want or need any bailout money at this time. It is either going to fix its own problems by itself, or wait until next month when Obama will be in charge.

And Bush is going to nationalize the two remaining auto companies -- Crysler and GM -- by buying shares of stock for 17.5 Billion or so. That puts the government in charge of building cars -- a very very bad idea.
Last edited by Ancient Dragon; Dec 19th, 2008 at 2:05 pm.
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Dec 20th, 2008
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Re: Useless, utterly useless

Click to Expand / Collapse  Quote originally posted by Dave Sinkula ...
In the paragraph immediately above the one you quoted.
I read that part, all it said is that if you did not pay us, your screwed. The point of SOX was to protect the public - it was gutted by Bushies; it did not do the due diligence it was mandated to do.
The Madoff children knew that it was a scam and did not allow their dad to touch any of THEIR money for years but did not say anything until it looked like the scam was going to be uncovered.

The free market says 'screw you' unless you pay me. Why did those 'due diligence' firms not notify the public? The free market paid Moodies and S&P to honestly rate the credit-worthiness and they lied and cheated and brought about the current crash. How does the Free Market handle that?

SOX was set up to try and protect the public from the Free Market.
Last edited by GrimJack; Dec 20th, 2008 at 1:57 am.
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