The Great Debate

How to fix the SEC

Matthew Goldstein

– Matthew Goldstein is a Reuters columnist. The views expressed are his own –

Many critics of the Securities and Exchange Commission point to Christopher Cox’s appointment as chairman in August 2005 as the day the wheels came off Wall Street’s top cop.

But in some ways, the SEC began to veer off course a few months earlier, when the agency moved its Washington headquarters into a sparkling new office building that would make even a corporate law firm jealous.

The plush environs made it all too comfortable for lawyers and investigators and discouraged them from venturing out to discover what the Wall Street banks were doing with all that leverage or sniffing out what Bernie Madoff and R. Allen Stanford were really up to.

As she fights to keep Congress from diminishing her agency’s mandate, Mary Schapiro, the commission’s chairwoman, vows to put an end to the regulatory lethargy. Schapiro, according to The Wall Street Journal, recently told some of her senior lawyers, “We need to demonstrate that we’re going to make changes.”

Bracing for black shoots in tech markets

Eric Auchard– Eric Auchard is a Reuters columnist. The opinions expressed are his own –

Pundits have been talking endlessly about the possible green shoots of recovery in the ravaged world economy.

But early shoots are not always green. They might want to consider the problem of black shoots. These false starts are familiar to lily growers, when a temporary rise in soil temperature occurs after a cold period.

Iran election opens door to U.S. talks

Paul Taylor– Paul Taylor is a Reuters columnist. The opinions expressed are his own –

A wind of change is blowing through Iran, where hardline President Mahmoud Ahmadinejad faces an increasingly tough battle for re-election on Friday.

Whether or not Ahmadinejad fends off reformist Mirhossein Moussavi and two other candidates after a turbulent campaign, Iran is likely to be more open to talks with the United States on a possible “grand bargain” to end 30 years of hostility. Tehran will not give up its nuclear program, whoever wins. But it may be persuaded to stop short of testing or making a bomb.

Leave pay to companies, shareholders

James Pethokoukis – James Pethokoukis is a Reuters columnist. The views expressed are his own –

For the populists who really, really want to make Wall Street pay by slashing their pay, Treasury Secretary Timothy Geithner certainly isn’t giving them what they want.

Yes, the top executives of the remaining TARP firms seem destined to be salary serfs to the “pay czar”, Kenneth Feinberg.

Why banks should sell their fund managers

Margaret Doyle– Margaret Doyle is a Reuters columnist. The opinions expressed are her own –

Barclays’ proposed sale of BGI may be an eye-catching deal thanks to its size, but it is unlikely to be the last bank that gets out of the fund management business.

Banks have debated whether they need to control their asset management arms for years. In the United States, Citigroup and Merrill Lynch were early sellers of their divisions in 2005 and 2006.

Blunting Obama’s tax cuts

Christopher Swann– Christopher Swann is a Reuters columnist. The views expressed are his own –

Obama’s tax cuts were meant to be the first strike force of the stimulus package. The main selling point — other than political popularity — was speed.

Higher take-home pay in April and May would be the first evidence many Americans would see of their government’s broad effort to rescue the economy. The hope was that this would prop up spending long before lumbering public work projects could get under way.

When hedge funds lose their mojo, humble pie is in order

pie– Matthew Goldstein is a Reuters columnist. The views expressed are his own –

We’re not quite there yet, but hedge fund managers may soon need to start giving away toasters – or perhaps plasma TVs — to woo new investors. Forcing the funds to eat a little humble pie now would benefit hedge fund investors in the long run.

Most hedge funds are off to a decent start this year — the average return to date is 9.43 percent, says Hedge Fund Research. Yet it’s a particularly tough time for launching a new fund. In the first five months of 2009, just 40 new funds have begun reporting performance figures, BarclayHedge reports.

What to watch for in Iran’s presidential election

Suzanne Maloney– Dr. Suzanne Maloney is a senior fellow for foreign policy at the Saban Center for Middle East Policy. Maloney, a former U.S. state department policy advisor, recently  published the book “Iran’s long reach: Iran as pivotal state in the Muslim world.” The views expressed are her own. —

Iranians go to the polls on June 12 in what is shaping up to be the most contentious ballot in the thirty years since the overthrow of the Pahlavi monarchy and the establishment of the world’s first modern theocracy. The ballot will determine the political fate of Iran’s provocative president, Mahmoud Ahmadinejad, and more broadly will signal the future of the country’s volatile political course and the prospects for improvement in its long-troubled relationship with Washington.

Iranian politics have become intensely personalized, focused for better and for worse around Ahmadinejad, a remarkable development considering his prior inexperience in national politics and the relatively limited authority of Iran’s presidency. By inserting himself in all of Iran’s most contentious debates and by asserting himself both on the domestic and international stage, Ahmadinejad has emerged as the focal point of Iran’s contemporary political landscape. As a result, the vote will serve as a referendum on Ahmadinejad’s notorious personality and policies – a reality underscored by the thinly-veiled vitriol directed at the incumbent in recent weeks.

Bair’s FDIC frenzy

bair– James Pethokoukis is a Reuters columnist. The views expressed are his own –

It’s an unhealthy sign for the U.S. economy that the most fascinating, if not divisive, player on the financial stage is the head of the Federal Deposit Insurance Corporation. But such is the case with Sheila Bair.

Although there is mounting evidence that the worst of the banking crisis may have passed, Bair continues to command center stage. The latest, if the unnamed sources chatting to the Wall Street Journal are to be believed, is that Bair wants to shake up top management at Citigroup. Presumably this would include the ouster of Citi’s chief executive, Vikram Pandit.

Inventory-driven U.S. recovery may be delayed

John Kemp Great Debate– John Kemp is a Reuters columnist. The views expressed are his own –

Steady improvement in manufacturing surveys, payroll data and freight movements all indicate the U.S. economy is approaching the low point in the business cycle and should hit the bottom within the next one to four months. But that does not necessarily imply a strong and sustained expansion is about to get underway.

It is possible to be optimistic that the worst of the downturn is now over (or nearly so), while remaining cautious about prospects for strong and sustained recovery once the cyclical turning point is passed.