May 16, 2021

British Police Deny Protecting Jimmy Savile

But the inquiry uncovered evidence of what seemed to be a cozy and largely undocumented network of high-level contacts between Mr. Savile and the police and other members of the elite at a regular social gathering known as the Friday Morning Club in his apartment.

It also found that even after complaints against Mr. Savile were made elsewhere in Britain, the police in his hometown, Leeds, continued to turn to him for help in promoting crime prevention campaigns, relying on his celebrity status as a quirky entertainer known publicly for charitable works.

“It seems to me that West Yorkshire police over the years failed to join up the dots,” said Alan Collins, a lawyer representing 40 of the hundreds of people who have made accusations against Mr. Savile since his death at age 84. “They had intelligence that something wasn’t right, if I can put it as mildly as that, and, against that background, they were using Savile for crime prevention campaigns and so on.”

“So he’s been given this aura of respectability again and again actually by West Yorkshire police.”

“There seems to be a collective myopia,” Mr. Collins said. “Savile was able to run rings around the police for decades. He used police officers. He was ingrained with them, dovetailed with them.”

The finding after an internal inquiry threw some light on his close relationship with officers in West Yorkshire, where 68 abuse complaints were filed in a scandal that has rocked the British Broadcasting Corporation, Mr. Savile’s longtime employer, and galvanized the police into a series of arrests, mainly of aging entertainers caught up in a belated investigation.

“There is no doubt that police forces made mistakes in relation to sharing and keeping information relating to Savile so no single clear picture of his offending could be made,” Assistant Chief Constable Ingrid Lee said in an introduction to the 60-page report.

“Much of the available information during Savile’s lifetime was never shared” with the West Yorkshire Police, and when it was, the police “did not connect the events to recognize a potential pattern of offending,”Constable Lee said.

“When taken in context, Savile lived for over 80 years as an individual who has duped millions into believing that he was a genuine celebrity, a charity fund-raiser and a harmless eccentric who did nothing but good in our communities,” she said. “However, evidence now suggests that he was a predatory pedophile and manipulative liar who caused harm to so many.

“It is clear that many people felt unable to report these dreadful crimes to West Yorkshire police or to one of the many agencies specially trained to independently receive such complaints,” Constable Lee said.

The West Yorkshire police inquiry found that some officers on the force had routinely attended the Friday Morning Club in Leeds, in northern England.

But, it said, “there is no evidence that he was protected from arrest or prosecution for any offenses as a result of his relationship with West Yorkshire police, or individual friendships with officers.”

It added: “No evidence has been found to conclude that there was any impropriety or misconduct in relation to the Friday Morning Club. All of those people spoken to who had knowledge of the Friday Morning Club described it as a ‘coffee morning.’ ”

“Savile had friends who were police officers, but he also had friends that were solicitors, doctors and many other professions,” the report said.

“All inquiries have shown that Savile was able to hide his offending from those he came into contact with and who probably thought that they knew him well.”

Word of the most recent arrest prompted by the Savile affair emerged this week when the British news media identified another entertainer suspected of a sexual crime, Jimmy Tarbuck, 73. The case concerns accusations of abuse of a young boy in Harrogate near Leeds in the late 1970s.

Reflecting the territorial distinctions among Britain’s police forces, the Tarbuck investigation was carried out by members of the North Yorkshire police force as a separate inquiry based on information from Operation Yewtree, the overall police inquiry into allegations against Mr. Savile and other people. About a dozen men, including some of the country’s best-known television personalities of the 1960s and ’70s, have been arrested.

Part of the public fascination with the Savile case relates to how a popular entertainer, known for charitable works, could avoid the attention of the police for so long even though he had hinted broadly in his own autobiography about sexual exploits.

The police report on Friday suggested that Mr. Savile’s relationship with individual police officers was close enough for one of them, at least, identified only as Inspector A, to intercede on his behalf when officers in Surrey, in southern England, contacted the West Yorkshire force in 2007 about an abuse allegation.

The officer contacted the Surrey police on behalf of Mr. Savile because the entertainer had lost the investigating officer’s contact details, the report said. The West Yorkshire officer had said he was a personal friend of Mr. Savile and had added, “Jimmy gets so many of these type of complaints.”

Mr. Savile contacted the Surrey police later and “told them there was a West Yorkshire inspector who normally deals with this sort of thing.”

Despite the 2007 inquiry in Surrey, the West Yorkshire police still turned to Mr. Savile for help in promoting crime prevention campaigns, the report said. “The reason for this was that the information was not shared across departments, there was no recognition of the impact of this information and no checks were made on intelligence systems in securing Savile’s services,” the report added.

Article source: http://www.nytimes.com/2013/05/11/world/europe/british-police-deny-protecting-jimmy-savile.html?partner=rss&emc=rss

DealBook: Diageo Ends Talks to Buy Jose Cuervo Brand

Donald Traill /AP Images for Jose Cuervo

8:07 p.m. | Updated

LONDON — The British liquor company Diageo said on Tuesday that it had ended talks to take over the tequila brand Jose Cuervo after failing to agree on a deal with its owners.

Diageo, the maker of Smirnoff vodka and Johnnie Walker Scotch, will stop distributing Cuervo when an agreement with the tequila brand’s owners, the Beckmann family of Mexico, expires at the end of June after 27 years.
The two sides failed to agree on a price for the brand, which analysts had valued at about $3 billion, said a person with direct knowledge of the negotiations, who declined to be identified discussing private talks.

The breakdown of Diageo’s talks with the Beckmanns, who are heirs of the founding Cuervo family, is also likely to fuel speculation that Diageo might be interested in the Beam spirits group in the United States, which owns the tequila brand Sauza.

For now, Diageo said it would focus on developing its Don Julio tequila brand, which is smaller but aimed at a higher-end and faster-growing customer base than Jose Cuervo, according to the company.

Paul S. Walsh, Diageo’s chief executive, said in a statement that the future of Cuervo “would be best delivered by aligning ownership of the brand with its route to market, and I have no doubt that Diageo has the best route to market for this brand.

“However,” he continued, “it has not been possible to agree a transaction which delivers value for Diageo’s shareholders.”

Shares in Diageo fell 1.64 percent in London on Tuesday.

Diageo has been distributing Cuervo outside Mexico since 1986 in a deal that made up about 3 percent of Diageo’s group sales, or about £300 million ($481 million).

The end of the discussions is a setback for Diageo’s plan to expand in faster-growing markets outside Europe, including China, India and Latin America. The company bought a majority stake in United Spirits of India in November after years of negotiations with Vijay Mallya, the Indian tycoon whose family created the liquor brand.

Other makers of alcoholic beverages have been seeking to increase earnings abroad to make up for sluggish demand at home. Asia Pacific Breweries accepted a $4.6 billion bid from the Dutch brewer Heineken for a stake in the company in September. In June, Anheuser-Busch InBev took full control of Grupo Modelo of Mexico, the maker of Corona Extra beer.

Cuervo traces its roots to 1795, when José María Guadalupe de Cuervo received the first official permit from the king of Spain to make tequila. The drink is made from the blue agave plant.

Article source: http://dealbook.nytimes.com/2012/12/11/diageo-ends-talks-to-buy-jose-cuervo-brand/?partner=rss&emc=rss

The Media Equation: Fox News’s Election Coverage Followed Journalistic Instincts

It has been suggested, here and elsewhere, that Fox News effectively became part of the Republican propaganda apparatus during the presidential campaign by giving pundit slots to many of the Republican candidates and relentlessly advocating for Mitt Romney once he won the nomination.

Over many months, Fox lulled its conservative base with agitprop: that President Obama was a clear failure, that a majority of Americans saw Mr. Romney as a good alternative in hard times, and that polls showing otherwise were politically motivated and not to be believed.

But on Tuesday night, the people in charge of Fox News were confronted with a stark choice after it became clear that Mr. Romney had fallen short: was Fox, first and foremost, a place for advocacy or a place for news?

In this moment, at least, Fox chose news.

By now, most of you have no doubt seen or read about the election-night stare-down between the anchors at Fox News and Karl Rove, who, apart from running a “super PAC” that aimed to defeat the president, also served as an on-air commentator. While news outlets love access to insiders, Mr. Rove’s two roles seemed to be in profound conflict after Fox’s decision desk projected that the president had won Ohio, all but guaranteeing him re-election. Mr. Rove said that the call was premature and that the decision desk was ignoring important data.

While Fox News allowed him to say his piece, it didn’t cave — and, more important, it didn’t question the legitimacy of the election over all, a move that could have led to all manner of unhealthy speculation.

The best journalistic instincts of Fox’s news people kicked in and the hard reality of Mr. Obama’s triumph was allowed to land as it occurred. In doing so, the network avoided marginalizing itself and ended, at least for a night, its war on the president.

Watching a news show transparently at war with itself made for extraordinary live television. Just after 11 p.m. on Tuesday, Fox News called Ohio for Mr. Obama. But Mr. Rove, who had helped finance over $300 million in attack ads, was getting phone calls from Romney officials protesting that forecast. He went on live television to challenge it, citing data he was receiving from the Ohio secretary of state.

“That’s awkward,” said Megyn Kelly, the co-anchor, speaking for many of us.

If Fox News had backed up under pressure from the Romney campaign and Mr. Rove, it could have fomented temporary but damaging unrest among its many fervent viewers.

Instead, Ms. Kelly walked down the hall and confronted the decision desk with Mr. Rove’s protest. She asked the head of Fox News’s decision team, Arnon Mishkin, “You tell me whether you stand by your call in Ohio given the doubts Karl Rove just raised?” Ms. Kelly may as well have been asking, “Are we a news organization or an instrument of the conservative agenda?”

Smiling, Mr. Mishkin answered plainly, “We are actually quite comfortable with our call in Ohio.” He and his colleagues were convinced, along with everyone else, that there were not enough Republican votes left in Ohio for Mr. Romney to turn the tide.

Ms. Kelly seemed satisfied, Mr. Rove was vanquished, and by this time the president had been declared the winner over all. Fox News, in this instance at least, landed firmly on the side of journalism, the facts and a narrative based on reality as opposed to partisan fantasy.

As my colleague Jeremy Peters reported, it was Michael Clemente, the executive vice president for news, who decided to let Mr. Rove have his say and then send Ms. Kelly to check it out.

“I was thinking about transparency, about putting out the facts as they happened,” Mr. Clemente told me in a telephone interview.

“For a half an hour, there was a missing piece that other networks were skating around — why there had been no talk of concession — and we wanted to explore why that was happening,” he said.

He added that once Fox concluded that the numbers from the decision desk were correct, it went with them.

“I knew that a big chunk of our viewers were going to be disappointed in the outcome,” Mr. Clemente said, “but I work on the news side, and the most important thing was getting it right.”

With the game declared over, Fox’s audience clicked off in droves. In the 10 p.m. hour, more than 10 million people were tuned in to Fox News, but that audience dropped almost by half in the 11 p.m. hour, once it was clear the president had been re-elected.

Jon Stewart, Slate and others had some fun with the civil war at Fox News, but I found the whole episode somewhat reassuring.

It was going to be a rough night at Fox News no matter how they played it.

The channel had pushed all its chips into the middle and showed its hand, all but declaring that it would be a big night for Mr. Romney. And in the run-up to the election, the channel tilted the rink in favor of Mr. Romney without compunction, keeping its viewers wrapped in a gauzy bubble of conservative notions about a country that had lost regard for its president.

According to Media Matters, a liberal watchdog group, in the final days of the campaign Fox News ran more than two and a half hours of Mr. Romney’s speeches while giving just 27 minutes to Mr. Obama’s.

But the channel was hardly alone in its partisanship. According to the Pew Research Center’s Project for Excellence in Journalism,   71 percent of MSNBC’s segments about Mr. Romney were negative, while Fox News went negative on the president 46 percent of the time.

Part of the reason the result came as such a shock was that followers of conservative media had been told over and over that mainstream analysis was not to be trusted, that it reflected liberal ideology and not data. But they were misled by media outlets that shared their values, Fox chief among them. David Frum, the conservative columnist, made just that point on MSNBC’s “Morning Joe” show last week when he said that Republicans had been “fleeced and exploited and lied to by a conservative entertainment complex.”

Campaigns are about partisanship, about the contest, but elections are about what actually happened. We all have our rooting interests, and Fox News’s are more manifest than most, but no news person wants to be caught out and end up looking dumb.

Fox News made the call on Ohio, and was the third network to call the election, behind NBC and MSNBC, because news people work there and knew what the data were saying. No matter how much Mr. Rove and much of the Fox News audience wanted it to end differently, Barack Obama had been duly re-elected as president of the United States. We decided. They reported.

E-mail: carr@nytimes.com;

Twitter: @carr2n

Article source: http://www.nytimes.com/2012/11/12/business/media/fox-newss-election-coverage-followed-journalistic-instincts.html?partner=rss&emc=rss

Web Site Will Shut Down to Protest Antipiracy Bills

The bills, the Stop Online Piracy Act in the House and the Protect IP Act in the Senate, are backed by major media companies and are mostly intended to curtail the illegal downloading and streaming of TV shows and movies online. But the tech industry fears that, among other things, they will give media companies too much power to shut down sites that they say are abusing copyrights.

The legislation has jolted technology leaders, venture capitalists and entrepreneurs, who are not accustomed to having their free-wheeling online world come under attack.

One response is Wednesday’s protest, which will direct anyone visiting Google and many other Web sites to pages detailing the tech industry’s opposition to the bills. Wikipedia, run by a nonprofit organization, is going further than most sites by actually taking material offline — no doubt causing panic among countless students who have a paper due.

It said the move was meant to spark greater public opposition to the bills, which could restrict its freedom to publish.

“For the first time, it’s very clear that legislation could have a direct impact on the industry’s ability to do business,” said Jessica Lawrence, the managing director of New York Tech Meetup, a trade organization with 20,000 members that has organized a protest rally in Manhattan on Wednesday. “This has been a wake-up call.”

Tim Wu, a professor at Columbia Law School, said that the technology industry, which has birthed large businesses like Google, Facebook and eBay, is much more powerful than it used to be.

“This is the first real test of the political strength of the Web, and regardless of how things go, they are no longer a pushover,” said Professor Wu, who is the author of “The Master Switch: The Rise and Fall of Information Empires.” He added, “The Web taking a stand against one of the most powerful lobbyers and seeming to get somewhere is definitely a first.”

Under the proposed legislation, if a copyright holder like Warner Brothers discovers that a foreign site is focused on offering illegal copies of songs or movies, it could seek a court order that would require search engines like Google to remove links to the site and require advertising companies to cut off payments to it.

Internet companies fear that because the definitions of terms like “search engine” are so broad in the legislation, Web sites big and small could be responsible for monitoring all material on their pages for potential violations — an expensive and complex challenge.

They say they support current law, which requires Web sites with copyright-infringing content to take it down if copyright holders ask them to, leaving the rest of the site intact. Google, which owns YouTube and other sites, received five million requests to remove content or links last year, and it says it acts in less than six hours if it determines that the request is legitimate.

The major players supporting the legislation, including the United States Chamber of Commerce and the Motion Picture Association of America, say those measures are not enough to protect intellectual property. They emphasize that their primary targets are foreign Web sites that sell counterfeit goods and let people stream and download music and video at no charge — sites that are now largely out of reach of United States law enforcement. And they are fighting against what they characterize as gimmicks and distortions by Internet companies opposed to the bills.

With talk of censorship and loss of Internet freedom, “the current debate has nothing to do with the substance of the bills,” David Hirschmann, who leads the Chamber of Commerce’s initiative on intellectual property, said in an interview. “We will certainly use every tool in our toolbox to make sure members of Congress know what’s in these bills.”

With financial resources that few other groups can match, the chamber is one of Washington’s most powerful lobbying forces and has shown the ability to alter Congressional debate on its own.

Reporting was contributed by Eric Lichtblau, Edward Wyatt and Claire Cain Miller.

Article source: http://feeds.nytimes.com/click.phdo?i=d3edc54a8337ffc3b6013aaf1f475ba8

E.C.B. Warns of Dangers Ahead for Euro Zone Economy

But the E.C.B., in its twice-yearly assessment of risks to the euro area financial system, did not mention one risk that clearly weighs on many investors, economists and political leaders: the possibility that the euro zone could break up.

“I have no doubt about the euro,” Mario Draghi, the president of the E.C.B., told members of the European Parliament in Brussels. “The one currency is irreversible.”

He said he had discussed the possibility of a euro breakup in an interview with The Financial Times, published Monday, to counter “morbid speculation” about the demise of the common currency.

By some measures, the stresses on the European financial system are approaching or even exceeding levels last seen after the bankruptcy of Lehman Brothers in 2008. For example, market perception of the risk that two large banks in the euro area could fail in the next year have surpassed the previous peak in 2009, according to data in the E.C.B.’s Financial Stability Review.

“The transmission of tensions among sovereigns, across banks and between the two intensified to take on systemic crisis proportions not witnessed since the collapse of Lehman Brothers three years ago,” the report said.

Several negative developments are converging, the report said. Banks must roll over about €220 billion, or $286 billion, in debt during the first three months of 2012, even as market funding has become scarce and expensive. Credit crunches are already visible in some countries like Ireland, Vitor Constâncio, the vice president of the E.C.B., told reporters Monday.

Meanwhile, slower economic growth is likely to lead to an increase in bad loans, which will further weaken lenders.

“The whole year is going to be a difficult year for the banks,” Mr. Draghi said.

But Mr. Draghi and Mr. Constâncio said that the E.C.B. addressed the problem when, earlier this month, the bank announced plans to begin lending money to banks at 1 percent interest for as long as three years. The action was one of a series of moves designed to ensure that banks have the money they need to support economic growth.

The measures “will eliminate all excuses to say that credit could decelerate,” Mr. Constâncio said.

Echoing recent statements by Mr. Draghi, the Stability Review leaned on political leaders to swiftly deploy measures they have agreed on to contain the crisis, such as the new euro area bailout fund.

Mr. Constâncio also criticized European leaders for a plan, supposedly voluntary, under which investors would accept a 50 percent decline in the value of their holdings of Greek bonds. That action in July put markets on notice that default of a euro zone country was not unthinkable, and raised pressure on other countries, Mr. Constâncio said.

Political leaders have since said that Greece will be a unique case, a statement some investors have taken as an implied guarantee on the debt of other countries. Asked if there was in fact a guarantee, Mr. Constâncio put the onus on governments to implement policies “that will counter the risk of that happening.”

Article source: http://feeds.nytimes.com/click.phdo?i=74c747d7383b2e23afeacd365a2a24d8

Common Sense: Volcker Rule Grows From Simple to Complex

Last year, when the Dodd-Frank Wall Street Reform and Consumer Protection Act went to Congress, the Volcker Rule that it contained took up 10 pages.

Last week, when the proposed regulations for the Volcker Rule finally emerged for public comment, the text had swelled to 298 pages and was accompanied by more than 1,300 questions about 400 topics.

Wall Street firms have spent countless millions of dollars trying to water down the original Volcker proposal and have succeeded in inserting numerous exemptions. Now they’re claiming it’s too complex to understand and too costly to adopt.

Having read at least some of the proposed regulations — I made it through about five pages before sinking in a sea of acronyms — I can assure you that the banks are right about that. Even the helpful summary prepared by Sullivan Cromwell, a law firm that represents big banks and that has associates who no doubt wrote the summary over several all-nighters, runs a dense 41 pages.

In numerous interviews this week with people across the political spectrum, I couldn’t find anyone who actually supports this behemoth — including Mr. Volcker, whose name it bears.

“I don’t like it, but there it is,” Mr. Volcker told me in his first public comments on the sprawling proposal.

“I’d write a much simpler bill. I’d love to see a four-page bill that bans proprietary trading and makes the board and chief executive responsible for compliance. And I’d have strong regulators. If the banks didn’t comply with the spirit of the bill, they’d go after them.”

He says he likes the fact that the proposed regulations, complex as they are, make top management and boards responsible for compliance. “If they think it’s too complicated, they have no one to blame but themselves,” he said of the banks.

Do we need to go back to the drawing board?

“Here’s the key word in the rules: ‘exemption,’ ” former Senator Ted Kaufman, Democrat of Delaware, told me. “Let me tell you, as soon as you see that, it’s pronounced ‘loophole.’ That’s what it means in English.” Mr. Kaufman, now teaching at Duke University School of Law, earlier proposed a tougher version of the Volcker Rule, which was voted down in the Senate. “We’ve been through this before,” he said. “I know these folks, these Wall Street guys. I went to school with them. They’re smart as hell. You give them the smallest little hole, and they’ll run through it.”

“I support the concept of the Volcker Rule,” Representative Peter Welch, Democrat of Vermont, said, “but these rules aren’t going to be effective. We’ve taken something simple and made it complex. The fact that it’s 300 pages shows the banks pushing back and having it both ways.”

And these are Democratic critics of the proposed regulations. An overwhelming number of Republicans oppose them, as they have virtually every aspect of Dodd-Frank. Even Senator Richard Shelby, Republican of Alabama, the ranking member of the Senate Committee on Banking, Housing and Urban affairs, who was the lone Republican to support the tougher Brown-Kaufman legislation, dismisses the latest incarnation.

“This proposal, however, is filled with central questions that Congress should have answered before even drafting Dodd-Frank,” said Jonathan Graffeo, a spokesman for Senator Shelby. “Instead, Congress willfully ignored the ramifications of its actions, just as it did in repealing Glass-Steagall.”

Yet the Volcker Rule, or something like it, could be the most important reform measure to emerge from the financial crisis.

If there was any doubt about that, this week the Securities and Exchange Commission unveiled its latest charges involving mortgage-backed securities. In what may be a new low for conduct by a major Wall Street firm in the walk-up to the financial crisis, Citigroup settled charges (without admitting or denying guilt) that it defrauded investors by creating a package of mortgage-backed securities for which it selected a pool of mortgages likely to default, bet against the security for the bank’s benefit by shorting it and then foisted it off on unwitting investors without disclosing any of this.

According to the S.E.C., one trader characterized this particular security in an all-too-candid e-mail as “possibly the best short EVER!”

Article source: http://feeds.nytimes.com/click.phdo?i=fd1e9cb5436759233b5e67f07682ac27

Common Sense: At UBS, It’s the Culture That’s Rogue

UBS moved swiftly to distance itself. Mr. Adoboli had engaged in “unauthorized” and “fictitious” trades that “violated UBS’s risk limits,” the bank claimed in a statement.

Mr. Adoboli remains in jail, his trading activities under investigation. UBS no doubt hopes they prove to be aberrational, an isolated instance of wrongdoing within the ranks of its approximately 65,000 employees worldwide. But the unauthorized trading is only the latest in a series of egregious ethical and legal lapses at UBS that have badly damaged the bank’s once-sterling reputation. In this broader context, how aberrational were Mr. Adoboli’s suspected lapses? Is the UBS culture at least partly to blame? And what if anything is UBS’s board going to do?

Mr. Adoboli, 31, a soft-spoken native of Ghana, worked his way up from a back-office accounting function to UBS’s vaunted Delta One derivatives trading desk. His circumstances bring to mind Société Générale’s Jérôme Kerviel in France. Mr. Kerviel is serving a three-year prison sentence for his unauthorized trading, which cost the bank about $7 billion in losses.

Mr. Adoboli’s lawyer told the court this week that he “is sorry beyond words for what has happened here. He went to UBS and told them what he had done and stands appalled at the scale of the consequences of his disastrous miscalculations.”

Like Mr. Kerviel, whose trading bears a strong resemblance to that of Mr. Adoboli, there’s no evidence that Mr. Adoboli stood to profit directly from his trading. Mr. Kerviel has steadfastly maintained he acted only for the benefit of the bank, pressured to distinguish himself by a rigid hierarchical culture in which he was the only trader from a working-class family who didn’t attend one of France’s prestigious grandes écoles. His superiors, he said, knew of and condoned his trading — as long as it was profitable.

Mr. Adoboli hasn’t offered any such justifications, but his immigrant status may have set him apart at UBS. (The bank is investigating whether others at the bank bear any responsibility.) His unauthorized trading also seems consistent with a culture at UBS that stressed individual advancement over team efforts, according to former investment bankers. “The problem isn’t the culture,” one of them told me. “The problem is that there wasn’t any culture. There are silos. Everyone is separate. People cut their own deals, and it’s every man for himself. A lot of people made a lot of money that way, and it fueled jealousies and efforts to get ever better deals. People thought of themselves first, and then maybe the bank, if they thought about it at all.”

Though UBS traces its roots to the mid-19th century, the modern bank is an amalgam of the former Union Bank of Switzerland; the Swiss Bank Corporation, (itself a combination of the Swiss bank and investment bank Warburg Dillon Read); the American investment bank PaineWebber; and a large team from the former Donaldson, Lufkin Jenrette, all acquired since 1998. Critics as well as some members of the bank’s current management say the firm never merged these disparate assets into one consistent culture, and that the headlong pursuit of growth at any cost trumped ethical and legal behavior, especially in the investment bank. (UBS didn’t respond to requests for comment.)

The financial crisis and its aftermath have proved daunting for most of the world’s banks, but in many ways UBS’s behavior stands out. In August 2008, UBS settled charges brought by Andrew Cuomo, then the New York attorney general, that it misled customers when it sold them what it described as nearly risk-free auction-rate securities even as its executives knew the market was collapsing. After the market froze and investors were unable to sell the securities, regulators sued, and UBS agreed to repay $19.4 billion and pay a $150 million fine.

Article source: http://feeds.nytimes.com/click.phdo?i=793c2638d04b9b38f9d61bbc64a869a8

DealBook: A Bailout Like No Other

So, I return from vacation to find that the restructuring of Greece continues to be very much a work in progress. Indeed, it now appears much more likely that Lehman Brothers will confirm a Chapter 11 plan before the European Union will work out its similar issues regarding Greece, Portugal, Ireland, Italy and Spain.

The latest problem comes from Finland’s misunderstanding of the nature of a bailout.

As readers no doubt recall, Greece ratcheted up it its projected deficit – almost doubling it, in fact – after the financial crisis. That quickly lead to Greece’s inability to refinance its debts at an affordable rate in the markets, and several rounds of bailout financing by the European Union and International Monetary Fund began. In exchange for such financing, Greece agreed to extremely painful austerity measures.

Each successive round of financing has become increasingly unpopular in the northern, “responsible” European Union jurisdictions like the Netherlands and, most important, Germany.

In Finland, the process was further complicated by a strong showing by the anti-euro True Finns party in recent elections. Thus, the Finnish government has every reason to “be tough” with Greece, and last week the Finns and the Greeks entered into a bilateral agreement whereby Greece would escrow collateral to protect the Finnish piece of the next bailout.

The problem, of course, is that the Finns are trying to make the bailout a low-risk proposition, and if Greece were a low-risk proposition it would not need a bailout in the first place.

And if Finland gets collateral, why not everyone else too? That, of course, is impossible and leaves Greece in a position where default becomes preferable, even desirable, since it at least leaves Greece in possession of its cash.

Essentially the Finns are a holdout creditor. In the corporate context you solve this problem by filing for bankruptcy and imposing majority rule. The European Union has no such ability to compel dissenting members, and thus we are no nearer a solution to Greece and its collateral effects than we were when this all began a few years ago.


Stephen J. Lubben is the Daniel J. Moore Professor of Law at Seton Hall Law School and an expert on bankruptcy.

Article source: http://feeds.nytimes.com/click.phdo?i=7dab01c2ca9580c4a941364289d69cfe

Chrysler Posts a Loss, but Operating Income Improves

The company, which is majority owned by the Italian automaker Fiat, reported a loss for the quarter of $370 million, mostly because of a $551 million one-time charge to fully repay loans from the United States and Canadian governments.

Without the charge, Chrysler said it would have posted net income of $181 million in the second quarter; it had a net loss of $172 million in the period a year earlier.

The automaker also reported a 30 percent increase in revenue, to $13.7 billion, from the second quarter of 2010, the latest sign that its comeback from bankruptcy in 2009 is accelerating.

Chrysler, the smallest of the three Detroit car companies, said that new products including the Jeep Grand Cherokee helped it increase its share of the American market and sell 19 percent more vehicles in the second quarter than in the period a year earlier.

“There is no doubt that Chrysler Group has taken a huge step forward this quarter,” Sergio Marchionne, chief executive of both Chrysler and Fiat, said in a statement. Fiat owns 53 percent of the Detroit automaker.

Mr. Marchionne said Chrysler’s resurgence should gain momentum now that the government loans had been repaid and heavy interest payments had been shed.

“Refinancing our debt and repaying our government loans six years early reinforces our conviction that we are on the right path to rebuilding this company and restoring it to its rightful place in the global automotive landscape,” Mr. Marchionne said.

Chrysler is on track to achieve full-year revenue of $55 billion and earn $200 million to $500 million, excluding charges, he said.

The earnings were the first reported by the company since Fiat took a majority ownership stake by purchasing stock previously held by the American and Canadian governments.

Going forward, Chrysler and Fiat will consolidate their financial results and further meld their management teams. Mr. Marchionne is expected to appoint senior executives this week to oversee engineering, purchasing and other areas for both automakers, as well as regional chiefs for the combined companies.

Article source: http://feeds.nytimes.com/click.phdo?i=08eb2242694b2bb00c10cbaae69d9a6e

Economix: Struggling College Graduates

Sally Cameron has an Ivy League graduate degree, and yet found herself tending bar. Mel Rodenstein earned a master’s degree in international affairs but was working in a “mindless” clerk’s job, eating rice and beans to save money.

Then there was the young woman who attended a good public university only to spend the first year after college driving around North America, with a friend and fellow struggling graduate. “There are no jobs anyway,” the woman said.

All of these college graduates could have appeared in recent newspaper stories bemoaning the fate of college graduates. Yet they appeared in similar stories that ran years ago — 1982 in Ms. Cameron’s and Mr. Rodenstein’s case and 1993 in the case of the young women on the road trip.

So Kevin Carey, an education writer and policy analyst, did something brilliant. He tracked down the graduates to see what had become of them. He has written about his findings in The New Republic:

[Mr. Rodenstein] went on to a series of nonprofit management jobs and, by 2010, was a senior research project supervisor at the Johns Hopkins University School of Health…. Today, one of the [two road trippers] lives in Silver Spring, Maryland, and runs her own H.R. consulting firm. The other got a PhD and works 20 feet away from this author in a Washington, DC think tank.

Sally Cameron, meanwhile, isn’t tending bar anymore. She’s a senior manager at an international development consulting company that works under contract with USAID. Her recent work includes building railroads in cyclone-devastated Madagascar….

In other words, they all turned out pretty well. They were no doubt damaged by the downturn into which they graduated. But they turned out vastly better than most people of their generation who didn’t get a college degree. Today, in fact, you could probably use a couple of them to illustrate a very different trend: the growing gap in the pay between college graduates and everyone else.

Bureau of Labor Statistics

Mr. Carey again:

For going on four decades, the press has been raising alarms that college degrees may no longer be a sound investment. Two things about these stories have remained constant: They always feature an over-educated bartender, and they are always wrong.

I recommend the whole article. It’s more clever than my summary can convey. It’s also a good example of persuasive writing.

If you’re interested in more on the subject, Catherine Rampell and I have each written related posts recently.

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