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Financial Blog Corliss Group: Wall Street accountable after the crisis

Financial Blog Corliss Group: Wall Street accountable after the crisis | The Corliss Group |

How the Government Botched Its Effort to Hold Wall Street Accountable After the Crisis


The Department of Justice (DOJ) fell down on many of its efforts to hold Wall Street accountable for mortgage fraud after the crisis, according to a new audit from the U.S. Department of Justice Office of the Inspector General (OIG).


The DOJ promised the public that it would place a priority on going after mortgage fraud. But the report finds that “DOJ did not uniformly ensure that mortgage fraud was prioritized at a level commensurate with its public statements.” One telling example is that the Federal Bureau of Investigation (FBI) ranked mortgage fraud as the lowest threat in its lowest crime category. The OIG also visited FBI field offices in Baltimore, Los Angeles, Miami, and New York and found that either it was a low priority or not even listed as a priority. Meanwhile, the FBI got $196 million in funding to investigate mortgage fraud between 2009 and 2011, yet the number of agents doing the investigation decreased in the same time, as did the pending investigations.


On top of these findings, the OIG reports that data was so poorly collected at the DOJ that it’s difficult for it to assess what was going on. And this bad data also led to the department misleading about its efforts to the public. In October of 2012, Attorney General Eric Holder announced a press conference that his department had filed 110 federal civil cases that involved more than 73,000 homeowner victims and total losses of more than $1 billion. When the OIG followed up about these numbers, it became clear that there were significant errors with them — the total losses, for example, were $95 million, 91 percent than originally claimed. Yet the department kept referencing these numbers even after it realized its mistakes.


The report does have some praise for the DOJ. It offers two examples of where the department prioritized going after mortgage fraud: “the Criminal Division’s leadership of its mortgage fraud working group and the FBI and USAOs’ participation on more than 90 local task forces and working groups,” it notes. And more financial reports here.


A spokeswoman for the DOJ also pointed to the fact that the number of mortgage fraud indictments almost doubled between 2009 and 2011 and that the number of convictions rose by more than 100 percent, saying, “As the report itself notes, even at a time of constrained budget resources, the department has dedicated significant manpower and funding to combating mortgage fraud.”


But the audit’s findings are disturbing given the scope of fraud and how little justice homeowners have seen since the crisis. Prosecutions for financial fraud hit a 20-year low in 2011, in the wake of a crisis created by risk-taking on Wall Street. Lawmakers continually prodded the DOJ over what they felt was an attitude that banks were “too big to jail,” “too big for trial,” or that they had a “get out of jail free” card.


Meanwhile, the national mortgage settlement struck in 2012 over servicing abuses has brought very little relief for homeowners. Two years later, most banks are flouting the terms, as only two were fully in compliance, and servicers are still rampantly abusing homeowners. Meanwhile, little of the money set aside to help homeowners dealing with foreclosure has actually reached them, and some of the checks were so small homeowners refused to cash them.


Other efforts to hold Wall Street accountable after a crisis that took as much as $14 trillion — or perhaps even more — out of the economy haven’t produced many results. Just one financial executive has been held accountable, while most banks have walked away with settlements that aren’t nearly as large as they at first may appear. The Securities and Exchange Commission has won back just $2.7 billion in fines, penalties, and disgorged profits, and while it started demanding that banks admit to wrongdoing in settlements, there is evidence it may be throwing the towel in on prosecutions related to the financial crisis.


Over the last few decades, the average person's interest in the stock market has grown exponentially. Because of the lack of stock-market-related websites that impart the steps required to begin trading safely, Corliss Group Online Financial was formed. Feel free and read more articles about stock-market education and only relevant and essential information required to trade shares on the stock market.


The above article is a repost from ThinkProgress.


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Subscription Newsletter Corliss Group Financial Magazine on Securing Investment Funding

16 Australian Entrepreneurs Share Their Tips For Securing Investment Funding

Funding is a crucial element to any startup with dreams to expand and grow, to get bigger and better.

Attracting the interest of an investor and asking them put their trust — and money — into your creation is no easy task.

With this in mind, Business Insider spoke to some of Australia’s most successful entrepreneurs to find out their secrets and advice to securing funding.

Here is what they had to say.

James Wakefield, co-founder of InStitchu

“In our experience, securing funding is a difficult task in Australia. It’s important that you find investors that you can connect with. Once you are able to develop a strong personal relationship with the investor, everything else becomes much easier.

My co-founder Robin McGowan’s dad always says, ‘plan your work and work your plan’… The old ‘beer test’ is our secret weapon. This not only helps us decide on who to do business with, but it also subconsciously works for the investor. If we can sit down and have a beer with them, the relationship is strengthened, conversation flows and everyone has a good time. The rest is history! Friday afternoons work well… Very few investors will feel like a beer on a Monday morning.”

Dave Stevens, CEO of Brennan IT

“1. Offer the lender some security, like your house, with a written agreement that they will return the security to you after you have ‘proven’ your ability to re-pay – like 2.5 years into a 5 year loan.

2. Be extremely professional with them, have ALL the information they need ready so that it makes it easy for them to assess your business.

3. Accept rapid pay-back periods and also high covenants, and if you can’t accept those then maybe you shouldn’t borrow the money in the first place.”

Jeremy Colless, Managing Partner of Artesian Venture Partners and VentureCrowd

1. Referrals: A warm introductions from a trusted source will open many more doors than a cold call. Use your networks on and off line to work out what are the few degrees of separation between you and your target meetings and then try to find a willing referrer.

2. Preparation: You cannot be over prepared when you finally do talk to investors, angels or VCs. You may believe that you are the 1 out of 100,000 entrepreneurs that can build a billion dollar business, but the investor will have been pitched by hundreds or even thousands of equally enthusiastic startups that also believe they are the chosen one. With so much competition you have to really dazzle to stand out. Ensuring that you have excellent answers to any question that may be asked requires enormous amounts of preparation not only in respect of the details of your startup but investors will want to see that you have studied the competition as well. Remember, ideas are cheap and execution is everything. You will need to convince the investor that your team will emerge victorious against the many other startups that may be executing a similar or same idea.

3. Multiple capital sources: You will need to target a wide range of possible investors including high net worth individuals, organised angel groups, government grants and rebates, VC firms, accelerators and incubators, reward and equity-based crowd funding like Pozible and VentureCrowd. All of these investor types have their own quirks and idiosyncrasies, so do your research and understand the investors’ motivations and criteria.”

Mitchell Harper, co-founder of Bigcommerce

“Bootstrap your business and prove product-market fit before raising money. The more revenue (not necessarily profit) you can bring in, the better your valuation and leverage when you’re out raising capital. Access to money is cheap and available for great businesses, but make sure you really understand your unit economics and how much it will cost to scale your business before you dive in.”

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Corliss Group Online Financial Mag: Japan's Abe suffers setback

Corliss Group Online Financial Mag: Japan's Abe suffers setback | The Corliss Group |
TOKYO (Reuters) - A city mayor opposed to a plan to relocate a controversial U.S.
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A city mayor opposed to a plan to relocate a controversial U.S. airbase on Japan's Okinawa island was re-elected on Sunday, Kyodo news agency said, creating a political headache for Prime Minister Shinzo Abe and threatening friction with Washington.


Delays in relocating the U.S. Marines' Futenma air base, a move first agreed between Tokyo and Washington in 1996, have long been an irritant in U.S.-Japan ties and Abe is keen to make progress on the project as he seeks tighter ties with the United States in the face of an assertive China.


Abe's ties with Washington suffered after the United States expressed "disappointment" with his December 26 visit to Yasukuni Shrine, a pilgrimage that further strained relations with China and South Korea, which see the Tokyo shrine to Japan's war dead as a symbol of the country's past militarism.


Susumu Inamine - a staunch opponent of the relocation plan - was assured re-election as mayor of the Okinawa city of Nago, Kyodo said, citing projections shortly after the polls closed. An Okinawa newspaper also said Inamine's victory was certain.


Inamine has pledged to use his local authority block the relocation of the functions of Futenma from a populous part of central Okinawa to Nago's coastal Henoko area.


His main opponent had backed the plan and run with strong support from Abe's Liberal Democratic Party (LDP).


Last month, Okinawa Governor Hirokazu Nakaima approved a landfill project to implement the plan.


Futenma has long been a lightening rod for discontent among Okinawa residents, many of whom associate the concentration of U.S. bases with accidents, pollution and crime such as the 1995 rape of a Japanese schoolgirl by three U.S. servicemen.


Seeking to soothe discontent, Abe's government earmarked 348 billion yen ($3.34 billion)for Okinawa's economic development in the draft budget for the year from April and pledged about 300 billion yen per year through 2021/22.


Abe also promised to study whether the relocation plan could be speeded up and said the government would start talks with the United States on a deal that could allow for more oversight of environmental issues at U.S. bases.


Political analysts said Inamine's win, while likely to slow progress, might not be a death knell for the relocation plan.


"Mr. Inamine says he is totally opposed and may create obstacles, but the Abe government is trying hard to keep its promise to the United States," Seiichi Eto, an LDP lawmaker and aide to Abe, told Reuters late last week.


Analysts say Abe could risk denting voter support for his government, which came to power at the end of 2012 with promises to revive the economy, if he does push ahead with the relocation of the base in the face of local opposition.


"Inamine's victory will give momentum to the anti-base movement and the opposition campaign could spread," Takashi Kawakami, a professor at Takushoku University, said. "Abe will probably try to forge ahead but there will probably be an opposition movement ... and if this is reported in the media daily, Abe's support rates could fall."



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Zal de 2020 Olympische Spelen echt helpen Tokio?

Zal de 2020 Olympische Spelen echt helpen Tokio? | The Corliss Group |


Will the 2020 Olympics Really Help Tokyo?


Het Internationaal Olympisch Comité (IOC) besluit eerder deze maand om Tokio gastheer van de 2020 Olympische Zomerspelen werd begroet met vuur over Japan, verdiende de natie gelukwensen uit de hele wereld. Voor velen de komende 2020 Games zorgt voor een broodnodige boost voor de economie en het land de moraal, vergelijkbaar met de rol van de 1964 Olympische Spelen Tokio. Raak op deze gevoelens, Premier. Shinzo Abe voorspelde dat als gastheer van de 2020 Olympische Spelen zou een "explosieve agent" voor de nationale economie en zou plaats Tokio in "het centrum van de wereld."


De feestelijke retoriek is begrijpelijk, maar de beloften, met name materiële kosten en baten, vragen om een meer sober toezicht, zelfs als de champagne kurken pop. Met het evenement zelf jaren, er zijn weinig gevolgen voor degenen die beloven de maan nu, bijna tien jaar later, hun garanties blijken te hol. De gevolgen voor de bewoners van de stad kunnen echter aanzienlijk zijn.


Naast zorgen over de Noord-fukushima kerncentrale lekt, er zijn ten minste drie andere uitdagingen Tokio staan zoals bij voorbereidingen beginnen serieus, en die onoverzichtelijke andere steden. Deze overheidsschuld accumulatie, infrastructuurwerken en achteraf gebruik, en ten slotte, zorgen over woonwijk verplaatsing en verdieping ongelijkheid.




steeds meer aandacht voor kosten en baten in de afgelopen jaren is in grote mate te wijten aan de verschuiving naar gunning belangrijke gebeurtenissen in de landen die kampen met armoede en ongelijkheid. India, China en Zuid-afrika hebben beide gebeurtenissen in de afgelopen jaren, en Brazilië zullen snel host zowel de Wereldbeker (2014) en Olympische Spelen (2016).  Maar, zoals we zagen in Londen in 2012, de wereldwijde recessie en een draai richting bezuinigingsplannen hebben grote sommen geld op korte termijn evenementen moeilijker te verkopen dan in eerdere jaren, ook in rijke landen. EEN boost in staat alleen is niet langer voldoende rechtvaardiging, en voorstanders - als met het geval van display- en bedieningspaneel (Abe) eerder deze maand - steeds moeten deze gebeurtenissen als de economische kansen die winst genereren en dragen bij tot de ontwikkeling van de stad.


Hoewel deze shift moedigt een welkom bij onderzoek van de economische waarde van grote evenementen, het is inderdaad erg lastig om een zinvolle berekening van totale uitgaven versus totale opbrengsten, met name jaar voordat het evenement plaatsvindt. Pre-event schattingen van kosten, in vele gevallen van rapporten in opdracht van overheidsinstellingen, zijn gevuld met rosy voorspellingen en vaak gelezen als public relations documenten. Jaren van onderzoek, aan de andere kant blijkt hoe vaak deze verslagen enorm onderschat de kosten en corrigeer indien nodig de voordelen van het evenement.


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Another deficit of clear thinking among Hong Kong's fiscal planners

Another deficit of clear thinking among Hong Kong's fiscal planners | The Corliss Group |
Philip Bowring is appalled by the report on fiscal planning that seeks to preserve the status quo, to protect mega infrastructure spending, yet utterly fails to address our critical challenges
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Philip Bowring is appalled by the report on fiscal planning( that seeks to preserve the status quo, to protect mega infrastructure spending, yet utterly fails to address our critical challenges


In 40 years of covering Hong Kong budgets and fiscal issues, I have never seen a document as misleading and contentious as the report of the Working Group on Long Term Fiscal Planning. It is a crude attack on health and welfare spending( in order to find money for already bloated infrastructure spending.


To add insult to injury, the group is mainly comprised of officials and academics enjoying huge health and pension featherbeds at public expense.


The starting point for the report is true enough - that Hong Kong has an ageing population and one that is growing only slowly. This has been known long enough. The government has been aware that years of having a very low fertility rate has been a major factor in ageing - but has done nothing to address it.


The document goes on to present a scare story of ever rising deficits( caused by a stagnating workforce and rising demands for health and welfare spending. Yet it accompanies this with projections for sustained increases in capital works. The non sequitur is backed by references to guidelines laid down by Philip Haddon-Cave in the 1970s - that public spending should be no more than 20 per cent of gross domestic product, and that there should be a significant surplus on the operating budget( to provide funds for capital works (in addition to capital works paid by capital revenue).

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Corliss Group Online Financial Mag: 6 investing dos and don’ts

Corliss Group Online Financial Mag: 6 investing dos and don’ts | The Corliss Group |
Where should you be putting your money in 2014? Here’s a list of dos and don’ts for the coming year.
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Successful investing depends a lot on timing. You want your money to be in the right place at the right time in order to obtain the best results.


Take Japan for example. For years, the Tokyo market was a backwater for investors. Money just sloshed around and profits were few and far between. Then last year Prime Minister Shinzo Abe introduced a policy of aggressive economic reform and the Nikkei took off, gaining more than 50 per cent. Anyone who invested in Japanese funds did exceedingly well.


The profits on Wall Street weren’t quite as spectacular but gains of more than 30 per cent for Nasdaq and over 25 per cent for the S&P 500 were more than most investors expected.


So where should you be putting your money in 2014? Here’s a list of dos and don’ts for the coming year that may get you on the right track.


Don’t keep too much at home. The Toronto Stock Exchange lagged well behind its New York counterparts last year, in large part because of the dismal showing of the mining sector, particularly gold producers. The outlook for resources in the coming year isn’t much brighter. We aren’t likely to see such heavy losses but the chances of a huge upside turnaround aren’t very good either. Without that, the TSX will continue to sputter. We may beat last year’s advance of 9.6 per cent, but not by much. Best bet: Industrial stocks, such as auto parts makers, which will benefit from the lower dollar.


Do have some money in the U.S. The American economy appears to be gaining momentum, albeit on a two steps forward, one step back basis. After their strong performance last year, the major U.S. indexes are due for a correction and that could come at any time. When it does — and be assured, it will — take advantage of the retreat. Best bet: Buy sound U.S. blue-chip stocks or units of funds that invest in them.


Don’t buy hedged funds or ETFs. Hedging works in your favour when the Canadian dollar is rising. It diminishes your returns when the loonie is retreating, as it has been for the past year. Economists disagree about where our dollar will settle against the greenback but most believe there is more downside left. In that case, unhedged funds will work to your advantage by allowing you to capture the currency gain. Best bet: U.S.-based exchange-traded funds (ETFs) which not only are unhedged but generally have lower fees than their Canadian counterparts.


Do diversify globally. Japan wasn’t the only overseas market to do well last year. Surprisingly, the major European markets all scored double-digit gains and frontier markets — the new leading edge of investing — gained 25 per cent. So expand your horizons. Best bets: Conservative investors should stick with funds that invest in developed markets. If you’re more aggressive, put a little cash in an emerging markets fund. They had a bad year in 2013 and are due for a rebound.


Don’t overweight bonds. Everyone should own some bonds or bond funds for stability and protection against the effects of a 2008-style market crash. But don’t overdo it. The long bull market in bonds came to a screeching end last May and our DEX Universe Bond Index actually lost ground in 2013, the first time that’s happened in several years. This year may not be as bad, but it won’t be great either. Best bets: For conservative investors, short-term bonds or funds. More aggressive investors may be able to squeeze some extra profit out of high-yield bonds or funds.


Don’t buy gold. Worries about a double-dip recession, the printing of billions of dollars a month in new money by the Federal Reserve Board, and the Eurozone crisis should have given gold a boost in 2013. It didn’t. Now, with recession fears fading and quantitative easing tapering, there’s not much to propel the price of the precious metal. There will be a time for bullion again — this just isn’t it. Best bet: If you really feel you must own some gold, buy a few shares in a royalty company such as Franco-Nevada (TSX: FNV). They carry much less risk than the miners and the stocks have stood up better as a result.

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Amazon’s holiday success and UPS’ holiday fail highlight the internet economy’s problems

Amazon’s holiday success and UPS’ holiday fail highlight the internet economy’s problems | The Corliss Group |
The holidays were great for Amazon and lousy for UPS. The two are linked and are a good illustration of two problems we’ll face more often as the web meets the real world.
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The holidays were great for Amazon and lousy for UPS. The two are linked and are a good illustration of two problems we’ll face more often as the web meets the real world.


Shipping giant UPS failed millions of customers this holiday season, missing the delivery of “a small percentage of its packages” on the Christmas Eve, according to a statement it released on Tuesday. Meanwhile on the day after the Christmas Day, e-tailing giant Amazon is crowing about signing up more than one million Amazon Prime members last week and that it registered record number of orders. Later Amazon said it would offer shipping refunds on packages affected by the UPS delays. Both events are linked, and here is why.


The reality check


Amazon’s great success doesn’t have to be UPS’ failure, but in this case the culture and expectations of the web met the real world, and the real world experienced what the web kids call a “fail.” There are some obvious reasons for this, such as UPS’ decision to let its workers take Christmas day off or people’s general tendency to wait until the last minute to order a gift online. The physical world is no different, as anyone who hits a mall on Dec. 23 or 24 could see.


Perhaps sometime in the near future, with drone delivery Amazon can solve this problem, but the situation illustrates two big problems we’re going to keep bumping up against as we transact more of our business and lives online. The internet has turned us into slaves of instant gratification. When we want to listen to a song, we click and stream. When we want to read the latest book, there’s another click and it’s on our tablet. However, this is creating an expectation that is challenged by the physicality of the real world.


So the first problem is that the gap between the online expectations where everything moves pretty much instantly (or at least within tens of milliseconds) and the real world, where crossing thousands of miles means actually crossing thousands of miles over increasingly congested and crumbling infrastructure is going to seem ever larger.


Making the real world elastic involves tradeoffs


The second is that you can’t prepare the real world people or infrastructure for peak demand. Most of our roads are literally set in stone. Our workforce is not as fluid as a flexible internet-like network needs to be and it’s not clear if that’s the society we want or should want to build. We are shifting to the web economy faster than the real world can keep up.


Yet, the internet and digital mediums reward and even encourage peak demand — be it a viral video or hundred of thousands of people downloading Beyoncé’s new album overnight. To bridge the gap between real-world limits and internet demands we need to have a more accurate understanding of the real world, perhaps through sensors and data for incredibly accurate predictions.


There will be a need for intelligence — even in the dumbest of machines. Until then, we need businesses and governments to consider how to manage the internet expectations in the real world. For example during last week’s peak demand Amazon cut off some people’s ability to sign up for Prime to avoid crushing the system for its existing members.


On the UPS side, more data and insights about the health of its fleet and workers might have helped it establish its own limits and set a stopping point after which it would have to declare the system overloaded. At that point, its management could make a cost benefit analysis associated with staffing up or buying more trucks to meet the peak. Unfortunately for employees, this sort of elasticity tends to lead to contract work, unless we radically rethink how we employ people.


Also helping “solve” the problem of employees and peak demand will be robots. Amazon’s delivery drones or warehouse robots are an example of how these can help. Unlike UPS employees, robots don’t need Christmas Day off.


The combination of the expectation gap and the conflict between the internet’s encouragement of sudden peak demand and the physical world’s inability to deal with that demand economically will be one of the defining business and technical challenges of the next decade. Robotics, data and the internet of things will help, but we’re going to have to adapt societal institutions to make it work.


Or we can just accept a few late Christmas presents.



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