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New York Times: Bill Cunningham - On The Street | A Dash of Color

Bill Cunningham's ON THE STREET

If you're down in the dumps over the economic situation, take a look at fashion photographer Bill Cunningham's latest video.

It's just possible the state we're in could lead to new American innovation - it already has in New York.  I look to invention, ideas and change.

We have always been a country that has excelled at reinventing ourselves.  Look at the movement from an agrarian colony, to an independent country, to battling out differences between the North and South, the movement to mechanization and cities and, more recently, the move to Silicon Valley.

We've done it before. Bill's right - we can do it again. And the tone?  Positive and confident.

 

CNN: Facebook Invites User Feedback in Quest for Transparency

You can teach social media front-runner Facebook new tricks.

Making a great comeback only 7 days after receiving huge screams of protest regarding policy changes, Facebook announced today it would give users additional control over future Facebook rules and practices.

Imagine what would occur if companies like B of A and Citicorp followed a version of this practice?

Guiding users are the newly-published Facebook Principles - 10 values Facebook hopes will provide more transparency.  In addition, there is a statement of rights and responsibilities regarding privacy, content ownership and other items of interest to users.  They'll be able to comment and vote on the wording of the documents. 

Good news for all Facebook users and informative for corporations who 'get it.'

Naked Capitalism: Goldman Puzzled Over China Tax Receipts

Another good catch by Yves Smith at Naked Capitalism - looks like the team at Goldman sees some discrepancies in China's tax reporting.  Puzzling, no?

It appears individual tax receipts have slowed significantly, yet wage growth continues.  How?

If you're a great chef, you know the answer.  It's all in the cooking.  See the post here.

Naked Capitalism: AIG - Breaking up is Hard to Do

Yves Smith reports that the FT is saying AIG will be broken into pieces.  Will American taxpayers get screwed again?

AIG has been looking like a bad deal from the first, and it's unclear what's happening here.  Yves correctly notes that every damn time they put the touch on Uncle Sam, we lose.  Hard to see whether that's the case, but read the entire post here.

Financial Times: B of A's Ken Lewis to Testify on Merrill Bonus Millions

Lewis blamed Thain for the bonuses, now it turns out perhaps Thain didn't do it all by himself.

Andrew Cuomo may not have been selected as Hillary Clinton's replacement, but it looks like he didn't need to become the junior senator from New York to heat things up.

He'll be deposing B of A CEO Ken Lewis tomorrow regarding the Merrill bonus mess.  You can bet the questioning will be tough. 

The grilling will take place in Cuomo's offices, with NY state prosecutors attending.  I suggest a lightly smoky B-B-Q sauce, accompanied by fava beans and an arugula salad sprinkled with a lemon-herbal vinagrette. 

Here's the low down as to why it doesn't look so pretty for Lewis: 

"When the bonuses were first disclosed in the Financial Times last month, BofA issued a statement blaming them on former Merrill chief executive John Thain. Since then, BofA has backtracked, and evidence has emerged that its executives were involved in the bonus payments.

The merger contract signed by Mr Lewis and Mr Thain on September 15 contained several paragraphs outlining parameters for bonus payments, and calling for them to be made before the deal closed.

One of Mr Lewis’s deputies, J Steele Alphin, discussed the bonuses with Mr Thain on several occasions, and Andrea Smith, BofA’s liaison to Merrill through the fourth quarter, revised many of the bonuses downward in December.

At a congressional hearing this month, Mr Lewis described his involvement as “very limited”."

Perhaps Mr. Lewis is from the old school and doesn't realize that a CEO saying his involvement was 'very limited' just doesn't fly anymore.  This kind of statement is remiscent of many others who haven't taken responsibility for their actions.

I find the Japanese light years ahead of us in personal responsibility.  Read the whole story here.

Bloomberg: Six Months to Solvency

Stress test?  Organizations that fail get 6 months to raise private capital or be required to take both governmental capital and terms.  The CEOs of B of A and Citi must be sweating up a storm.

Here's the dope on the terms the government is dishing out:  "Any new government money will come in the form of convertible preferred securities, which would acquire voting rights if converted into common stock. U.S. officials, speaking to reporters after the announcement, said there would be no limit on how much money the program could provide banks, raising questions about whether the Obama administration will need to ask Congress for more bailout funds."

Throwing good money after bad?  Yes, doubtless - in some cases. 

The terms still appear too generous to me.  I'd like to see government control, a change in the C-suite, and a new Board of Directors for a start.

Read the entire piece here.

New York Times: Death to Citigroup

Eric Etheridge has created a column that gathers the opinions of many with the same outlook - Citicorp is dead.

The Wall Street Journal, Jeff Matthews, David Reilly, Barry Ritholtz, and Henry Blodget all concur - Citi is done, let's move on.

How long will it take the government to react properly?  It's anyone's guess, but you can be sure that what will precede any action will be lots of PR designed to comfort, educate and get people receptive.  Anything will be said except nationalization. 

Receivership, which will likely be the reality of what happens, won't be whispered either.

Read the NYT Opinionator piece here.  Thank you Mr. Etheridge.

CBS5.com KPIX TV: Hank Plante - B of A Heiress to Giannini Fortune 'Mad as Hell'

It's deja vu all over again, as Yogi Berra said.  B of A heiress Virginia Hammerness came out punching in an interview in which she blasted current bank management.

Hammerness' comments today (she called bank management 'idiots') reminded me of a B of A shareholder meeting I attended some years back in San Francisco.  Sam Armacost was the CEO at the time and, similar to today, the bank wasn't doing so well.

Armacost spoke, there was a financial presentation, then the period for shareholder comment occurred. 

A gray-haired lady rose, walked to the microphone, then introduced herself to the audience as Claire Giannini, daughter of B of A founder A.P. Giannini.  Ms. Giannini proceeded to give Mr. Armacost a tongue-lashing.  She chided him for irresponsibly managing the bank, not taking into considration the many widows and orphans who depended on the bank's dividends, and refused to listen to any excuses.  Her coments were blistering.

Sam Armacost may not have been smiling - his was a difficult tenure - but I'd bet A.P. definitely was.  Claire's statements were true to her father's founding principles - care for those less fortunate, serve your community, be fair and equitable in your dealings with others. 

It's not an overstatement to say that a big part of the reason San Francisco was able to recover from the earthquake and fire of 1906 was because of A.P. - his courage and his integrity.

I think he's calling on all of us to step up and do what needs to be done to resolve the current situation.  We don't need to passively wait for leadership.  Those who have inspired us before - A. P., Martin Luther King, Churchill, Ghandi, Eleanor Roosevelt and so many others - are great examples.  In our relationships, our homes and our communities let's dedicate ourselves to positive action with integrity.

Read the entire Hank Plante story and see the video here.

New York Times: Obama and Geithner do Stress Tests on Banks

Stress tests?  And now, with the government 'ownership' of Citi at 8%, we find it may grow to 40%.  Here's a quote from the article:

"Citigroup approached the regulators with a plan that would allow them to convert a large amount of the government’s $45 billion of preferred shares, which is treated as debt, into common stock, this person said. The government owns a stake of roughly 8 percent, but that could grow to as much as 40 percent.

Converting the preferred shares while also issuing more common shares would bring Citigroup closer to the mix of equity that the government is likely to demand when it introduces the stress test. But that would severely dilute the value of shares held by existing Citigroup stockholders."

Looks like we're having a raftload of shoes dropping one at a time regarding the ongoing quibbling over the health of U.S. banks.

Case in point, now the government is going to test the top 20 banks to see which are tough enough to withstand even more economic turbulence.

The question isn't which are strongest and what they can withstand - it's actually where do they stand right now.  Are they solvent?  Do they have enough capital?  Are they making loans with the TARP money they've been given?

There are lots of other questions that could be asked, but the point I'm getting at is this:  if Citi and B of A aren't in decent shape (and I believe they're not) nationalize them now or enact another plan that will deal with them.  At this point we're billions in the hole and not much closer to a solution than we were before Obama was elected.  We need to move faster and combine the action with a solid PR campaign that leads the electorate and provides people with transparency and confidence.

Obama would do well to model himself after Winston Churchill in this.  The British government under his leadership did an exemplary job of outbound communications that pulled the populace together and got people to understand quickly what their role was.

People are willing - leaders need to lead.  Stress tests?  I think Treasury already knows what's inside the top 20.  Decisiveness will surely be seen as a virtue given the situation.

Read the article here.

Bollywood Eclipses Hollywood: What Oscar can Learn from Slumdog Millionaire

Jane Genova hit it out of the ballpark when she said yesterday that no one is much interested in Hollywood or the Oscars.

Tonight's broadcast of the 81st annual Academy Awards underscored her point.

The only thing that seemed new was the Bollywood-style production number highlighting songs from 'Slumdog Millionaire.'  Think about it - the U.S. is in its worst-ever economic crisis.  Of course the Horatio Alger aspect of the story is going to be something people grab onto with a vengeance.

A.R. Rahman is certainly the pride of India, winning a couple Oscars this evening, the first for Original Score, his second was for the song Jai Ho.  The optimistic story places slumdog Jamal Malik in a game show where he stands to win 20 million rupees if he can provide the correct answer to the final question.

But the real question tonight is why the Academy doesn't get it.  It restricted distribution to an ABC broadcast, leaving people on the Internet watching a bootleg version.  There were too many ads for too many luxury products (haven't they heard there's an economic crisis?), and the format wasn't interactive. 

When Dark Knight grosses more than all 5 films nominated for Best Picture, there's a problem.  Uh, did I mention there was no interactivity?

Congrats to AR and the Slumdog team.  Hollywood - take the cue.

See the Slumdog Millionaire trailer here.

See Jane's entire post here.