Endless Knots

"So many drunk drivers"

Cartoon by Gary Varvel, editorial cartoonist for The Indianapolis Star

Back to my least favorite subject - phones and driving. Remember my incident in Newtonville a few weeks back when a woman wielding a very large white SUV screeched to a halt in lieu of running me over then screamed at me for pointing out that she was on the phone?

You can figure this one out, smart readers. Yesterday, and approximately two miles from the original crime scene, that very same woman almost drove into our car. Guess why?

She...was...on...her...#%@#one.

This time she was pulling out of a parking lot. Mindlessly and carelessly.

So today (no, she doesn't figure into the next part), another SUV driver, phone to ear, swerved around a car making a perfectly legal right turn on our street and of course did the near-wheelie thing to avoid us, causing the one driving my car to say, "So many drunk drivers."

There oughtta be a law.

Transparency and the financial crisis - Update 3

Remember the financial crisis, the $700B bailout, and Henry Paulson? Guess what? They're all still he-eere.

Despite the many smiling faces wherever one goes these days (for example, I went out to dinner last night, said about four syllables to my companion, and the people at the next table were all over us with post-election glee), we continue our ongoing series about the economic debacle. It doth continueth.

Latest additions to our updated OrgScope map include the government purchasing up to $250B of preferred stock in certain banks, which puts money in their coffers that they, in turn, are supposed to move back into the lending market.

The first eight banks to take advantage of the program, scooping up half the $250B, are: Bank of America, JP Morgan, Citigroup, and Well Fargo, each receiving $25B; Goldman Sachs and Morgan Stanley, each receiving $10B; Bank of New York Mellon ($3B); and State Street ($2B).  According to "Devil Is in Bailout's Details," an informative article by Deborah Solomon and David Enrich in the Oct 15, 2008, Wall Street Journal, "the remainder will be available to small and medium-size institutions that apply for an investment:"

The sweeping steps create a thicket of issues, most pressingly whether the banks will step up lending. The government is making clear it expects banks to lend out the funds it gets from Uncle Sam. Further exercising its clout, Treasury also extracted a promise that the financial firms would help struggling homeowners, continue lending and would sign up for loan guarantees offered by the Federal Deposit Insurance Corp.

"What we're doing is making clear to the banks how important it is to deploy the capital," Treasury Secretary Henry Paulson said in an interview.

Transparency and the Office of Financial Stability - Update 2

In our ongoing series about the disposition of our $700B (and counting), two more contracts, each for about three years (just shy of that) have been awarded, one to PriceWaterhouseCoopers ($191,469.27) and one to Ernst & Young (($492,006.95). Check out our pages on the "2008 Financial Crisis," and the updated OrgScope map. For those with long memories, there used to be a lot of firms like these two but, as one family wag put it a few years back, we're down to the Final Four. From the Oct 21 press release (I've inserted links to the actual contracts):

Washington- The U.S. Treasury Department today announced that PricewaterhouseCoopers LLP and Ernst & Young will assist the Department in the implementation of the Troubled Asset Relief Program authorized under the Emergency Economic Stabilization Act. Treasury hired PriceWaterhouseCoopers on Thursday and hired Ernst & Young on Saturday.

Both contracts are "Blanket Purchase Agreements," which give the government authority to issue "task orders" against which the contractor performs and permit the extension of contracts over a broad range of services without having to go back out for competitive bid. You can quickly see the pluses and minuses of this arrangement: it reduces bureaucratic bottlenecks as the bidding process can take forever and result in lowest-cost but not necessarily highest-quality awardees; it increases the opportunity for most-favorite-contractor awards resulting in highest-cost but not necessarily highest-quality awardees. The way around this, of course, is as much transparency as possible and, naturally, truly ethical participants on both sides.

OK. The PWC contract as linked to the Treasury website says practically nothing about what it will do and appears to be a filled-out government form with redacted information (again). The E&Y contract, a retyped version of the same form as PWC's, is for accounting services and contains more detail. It also has redacted info, but in E&Y's case, it says ""Redacted," whereas in the PWC contract it's just blacked out. Here's the Treasury-ese for what they're doing:

PricewaterhouseCoopers will help the Department establish a sound internal control posture and Ernst & Young will provide general accounting support and expert accounting advice.

Neither agreement, as posted, contains its attachments where are their price and technical quotes. Because of this, we can't tell what the approximately $700K total is for or whether these two awards cover a week, a month, or a year of work. We're not objecting to obscuring the financial details here. Indeed, we don't publish our rates. But without more detail, it limits insight into the organization, number of people involved, their expertise, or what specifically they're going to be doing--and how they're going about it. We need to make the work of these organizations transparent, not just the contractual vehicles. What do you think?

Transparency and the Office of Financial Stability - Update 1

So, compatriots, in the interest of ongoing transparency vis-a-vis the economic mess, we're tracking the contracts as they're let by the Office of Financial Stability. You can track them too by signing up for alerts here. Using OrgScope, we're adding each new award and hire to the map. Click this link, wait a few seconds for the dynamic map to load, then click on down through the Office of Domestic Finance (it's over to the right) and then to the Office of Financial Stability and then you'll see the contract awards in purple boxes under the sub-departments awarding them. Roll over the purple box and you can see its value; double click and link right to the actual contract. The map below shows what I'm talking about.

Here are the first three contracts as listed on Treasury's site.

According to the Treasury Department's October 13 press release, it hired EnnisKnupp as the first investment adviser. Contract total, which you can find here is for $2.495 million.

On Oct 14, Treasury announced its award to Bank of New York Mellon for a contract  "to serve as its custodian for the implementation of the Troubled Asset Relief Program authorized under the Emergency Economic Stabilization Act...to help the Department with custodial, accounting, auction management and other infrastructure services needed to administer the complex portfolio of troubled assets the Department will purchase." This is a three-year contract and the section containing compensation information is blacked out.

On Oct 16, Treasury announced its legal adviser, Simpson, Thacher and Bartlett, its contract here. Total contract award for six months beginning Oct 10, 2008 = $300,000.

Transparency and the economic emergency

An open letter to Congress, the American people, and the Office of Financial Stability:

The numbers are dizzying, the trailing zeros too many to even type...so how are we to understand what the US government is doing to avert economic collapse?

One way, we believe, is to shine a little light on who's in charge of the US Treasury Department's Office of Financial Stability, the new agency tasked with managing and distributing the initial $700 billion. Initial, that is, because much has already been spent and because all agree that it will be a heap of a lot more dough before we're done.

Transparency is a popular word but, unfortunately, a less popular practice. However, in times like these, being able to truly see what's going on may be the only express route to regaining the trust necessary to rebuild the economy. Thus, we offer our solution to removing the wrappers that typically shroud most financial dealings.

Why is transparency so important? As I've said so often about collaboration here on this blog (and in our books), "purpose is the glue and trust is the grease." Applied to the financial crisis, we write on our NetAge website.

Using OrgScope and some good online searching, we've done a rough mapping of the Office of Financial Stability (OFS), the people occupying its various new positions, placing it in the context of the larger federal government, and providing a dynamic map that you can fly around to see who's who and what's what. In the picture below, the red disks illustrate the relative size of the contract values that each of the OFS "policy teams" has to manage. The initial structure that we depict comes from the October 13 press briefing by Neel Kashkari, the new head of OFS.  According to the briefing, Pete McCarthy, who also serves as Treasury's Assistant Secretary for Management and Chief Financial Officer, is leading the design team for the new office.

As more info becomes available, we'll update the map. Please pass this post along to anyone you know who is interested in rebuilding faith in our economy.

Come on, Comcast - seat hogging at the FCC hearing?

Thanks to Scott Kirsner (on the story, as usual), you too can shake your head at Comcast's tactics when the FCC came to Harvard last week for a hearing about who controls the Internet. As per Heads Up, Netizens below, the agency that has some regulatory powers over the Internet (it can't really control the whole thing now, can it, the Internet being global and all) came to Boston to hear first-hand about Comcast's transmission policies. In short, Comcast has apparently blocked BitTorrent's use (so many stories that I'm just putting in the Google search link).

Well, now. It appears that Comcast hired people off the street to fill seats at the FCC hearing so that the public (that's us) couldn't sit in the them. Click through to the Portfolio story by Sam Gustin and see a priceless picture. Here's one telling paragraph:

Comcast spokeswoman Jennifer Khoury said that the company paid some people to arrive early and hold places in the queue for local Comcast employees who wanted to attend the hearing.

Speaks for itself.

And while we're on the subject of Comcast: last week, as I reported in Under the desk, our Comcast cable service went down. Not completely. Not predictably. Just the kind of frustrating experience that makes me want to sell the house, buy a farm, and go off the grid entirely. The finger-pointing between Comcast and Verizon, our website and email provider, was skit-worthy. That said, I had one conversation with Eric at Comcast Tech Support that bears reporting. In trying to diagnose my problem, which included not being able to send attachments, I suggested my sending two emails to him, one with an attachment, one without.

"We can't send or receive email," he said.

"You're kidding," said I.

"I'm not," said Eric.

"Comcast Tech Support doesn't have email? Isn't that kind of pathetic?"

"Our lockdown policies go waaaay beyond pathetic," he replied.

My condolences to Comcast Tech Support (Eric did figure it out, by the way, thanks).

And Comcast: tell us who made the decision to hog the seats. And please show that person/those people the door.