Frontline: The Warning

February 20, 2010

Hello everyone:

You can watch the Frontline show (Banks, Greenspan, etc) here online: http://www.pbs.org/wgbh/pages/frontline/warning/view/?utm_campaign=viewpage&utm_medium=toparea&utm_source=toparea.


Bank bonuses are bad

February 18, 2010

http://www.mercurynews.com/search/ci_14412031?IADID=Search-www.mercurynews.com-www.mercurynews.com (Follow the link to view the article by Bruce Wydick of USF or read the article below.)

What causes otherwise ordinary people to take extraordinary risks? A football team behind in the final seconds of a game throws a 60-yard “Hail Mary” pass into the end zone. A basketball team behind by a few points takes an inordinate number of three-point shots: The probability of a basket is lower, but the potential payoff is high. In both cases, the risky strategy creates the possibility of victory.

What does this have to do with the roots of our financial crisis? Plenty. Although the public outrage over bank bonuses has often seemed to flow from feelings of social injustice or a general animus toward Wall Street, the problem is far more consequential than this. Incentive bonuses given to bank executives create an environment that encourages a risk-taking behavior that undermines the stability of the entire financial system.

In order to align the incentives of corporate executives with the goals of a firm, top executives are often given performance bonuses. For publicly held firms, these bonuses routinely come in the form of call options, an option to buy stock at a certain strike price. The higher the executive can push the price of the firm’s stock, the more the options are worth, hence the motivational impetus. Read the rest of this entry »


Investigating Anthem price increase

February 11, 2010

Rita Williams:
Ch. 2 Reporter

Your very serious piece http://www.ktvu.com/video/22529802/index.html about Anthem Blue Cross raising rates is not unexpected by this 50 year veteran of the Life and Health industry. They know some changes are coming from Washington. Blue Cross, here in California and 25 other states, were non-profits 25 years ago, and represented a very big share of the health delivery system.

Check out Wellpoint’s webpage: http://wellpoint.com/. Wellpoint is a public company that owns Anthem Blue-Cross. They directly insure close to 35 million under the age of 65 and administer close to 24.5 Medicare for 4%. In addition, they sell Medicare supplements to untold millions of seniors. The under age 65 and senior supplements use the 30% margin referred to in your piece. They serve well over 60 million people. Read the rest of this entry »


Should you stay if your home is underwater

February 11, 2010

Check out this link on the CBS 5 local news: http://cbs5.com/consumer/mortgage.walking.away.2.1483374.html. Here are our comments:
CBS Sacramento Subject: Should you stay if your home is underwater? You are to be congratulated covering super serious problems for buyers over their heads. In addition, the horrible property tax losses for cities and education needs are the aftermath. There are millions of seniors with lock-in problems that live in middle to upper middle class neighborhoods, resulting in the same horrible property tax losses for cities and education needs. Please review our piece that appeared in the San Jose Mercury News Aug. 30th, 2008, now posted on our blog: https://jameshall.wordpress.com/ as well as our proposed legislation. A senior Senator by the name of Anne Mack is speaking to several state legislators about it. The conflict between Federal capital gains plus moving restrictions leads to senior tax inequities that could partially be remedied without a direct attack on Prop 13. Keep it up! James U. Hall