Moody’s allegedly hastened the credit crisis earlier in the decade by assigning top ratings to mortgage-backed securities that deteriorated later. Moreover, it is being probed by regulators worldwide, with several ongoing reviews in Europe for rating a European debt product, constant proportion debt obligations (CPDOs), at a higher-than-merited AAA.   According to the Wall Street Journal, Eric Kolchinsky a former analyst with Moody's Corp. (MCO) has accused Moody's Investor Service of issuing inflated ratings and will make the matter public by taking it to U.S. congressional investigators. Moody’s issued a high rating to a debt security, although it was planning to downgrade assets backing the securities. The Journal said that Moody's declined to make any comment but has suspended Mr. Kolchinsky, as he refused to cooperate with the investigation into the issues raised. Kolchinsky is scheduled to testify on the ratings firm reform before the House Committee ...

Seasoned provider of spa technology, Simulated Environment Concepts Inc. (“SEC”) is excited to announce their plans for future development and growth in the public market. Following a minor setback, SEC has emerged more hopeful and excited than ever to expand and continue their business as one of the most innovative and successful in the industry. Recently, sales of their patented SpaCapsule product have brought increased revenue and notoriety to the company. SpaCapsule, a stylish, capsule shaped relaxation station, edges out other competitors’ products in its functional and aesthetic design.

The SpaCapusle technology that SEC is promoting provides a unique way to enjoy a relaxing spa experience without the matching expensive prices or amenities. It is a full body massage, aroma-therapy, and audio and video entertainment system contained in one capsule-shaped machine that weighs around 5,000 pounds. The system can operate in any area with enough space, and has been featured

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On Saturday, July 11, Korea Electric Power Corporation, or KEPCO (KEP), signed a contract with the state-run Saudi Electricity Company (SEC) to build a power plant in western Saudi Arabia.  The 1,200 MW fuel-oil fired power plant deal in Rabigh was signed between KEPCO in consortium with a Saudi Arabian company, ACWA Power International.   The consortium had been selected on March 17, 2009 as the top bidder for the contract.   KEPCO is an integrated electric utility with an annual capacity of 63,529 MW.  The company owns 87.6% of the total electricity generating capacity in South Korea.   Korea Electric Power will invest $200 million in the $2.5 billion Rabigh project.  The rest of the funding will be provided by a consortium of banks led by Alinma Bank, which expects to contribute about $500 million, with other banks like HSBC (HBC), Standard Chartered, etc. chipping in ...

It’s become clear throughout the past five years that GAAP and financial reporting in the United States is on a clear path toward change in the form of a convergence with the International Financial Reporting Standards (IFRS).  World events, most notably the London G-20 Summit, have been calling for a single, high quality set of accounting standards that all companies will use to file.  The SEC has recently made definitive steps toward this change, enough to make me believe that IFRS will be here before we know it, so it’s time to get ready.

Background

Since 2005, the convergence to IFRS was apparent with the European Union requiring companies listed on the EU regulated stock exchanges to file consolidated statements using IFRS.  The SEC responded to this in 2007, agreeing to accept these IFRS statements from the foreign issuers without forcing reconciliation to GAAP.  This proved the SEC’s acceptance and belief

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Top Stories     

Sources: Treasury considers more mortgage-modification incentives Providing cash payments to holders of second-mortgage liens is among the options being considered by the U.S. Treasury to encourage lenders to modify mortgages as an alternative to foreclosure, sources said. Incentives for “short sales,” in which the lender gets some money but less than the full amount due under the loan, are also being discussed, the sources said. Reuters (21 Apr.)

European, U.S. banks face steep funding needs, IMF says To return to capital levels similar to those immediately before the financial crisis, banks in Europe and the U.S. must raise $875 billion in equity, the International Monetary Fund said. The IMF’s Global Financial Stability Report delves ...

“The Big Takeover” by Matt Taibbi is probably the best article written to date explaining the financial crisis and how we got to where we are now. Taibbi’s necessarily lengthy article explains the problems, names the “poipetrators”, and exposes all of the conflicts of interest— absolutely a must read.

AIG, Goldman Sachs, and J. P. Morgan turn out to be the major players causing perhaps the greatest financial crisis in modern history— even if the pain is unlikely to get near Great Depression proportions, the dollar losses to individual investors have certainly gone as far.

JPM was the brewmeister of the CDO, a vat full of various kinds of income securities, determined to be less risky because the income on most would almost certainly keep flowing— kind of like the once popular junk bond fund that Wall Street insisted was not risky …

The purpose of IBOR is to protect financial markets and to create self-sufficient investors who produce economic growth instead of government deficits. IBOR standards create transparent financial markets, regulate speculation, and protect retirement portfolios. Here’s a sampling:

Section One: Product Transparency. All investors have a right to see precisely what securities are inside any investment product by accessing real time information that includes names and cost-based allocation percentages.

Section Two: Regulation and Education.

Section Three: Protection from Speculators. Investors have a right to protection from risks added to portfolios without their control, knowledge, or permission.
Naked shorting, index fund ownership of large share positions, and all naked option transactions would be prohibited.

Section Four: Controls of Hedge Funds.

Section Five: Brokerage Account Statements. Investors have a right to account statements that: 1) help manage asset allocation targets, 2) report realized gains and losses, 3) track …

Congressman Ackerman chewing out the SEC.

Yes I know, I posted a video of this last week, but it is so good I couldn’t help myself.

Heres the scene: A board of representatives of the SEC gets torn to shreds and roasted alive by a ticked off Congressman Ackerman.

Its rare, and after the fact I am sure doesnt make anyone feel better about their losses, but from a point of view of seeing them sit and squirm it sure beats them getting away with complicity in robbing the American citizens blind (indeed, citizens of countries all over the world).

The SEC in Action... err, Partial Action The media are now piling on the SEC and the Madoff failure, something that we highlighted last week. Reporting to the SEC We suppose that other investment advisors have made reports to the SEC.  We have done so on two occasions.  In both cases there was a slam-dunk violation of the '33 Act, a stock offering that was obviously fraudulent, not meeting the terms of the Act. The SEC does not respond to reports -- not at all.  There is not even an acknowledgment.  In one of our reports, the illegal fund was quickly closed down.  The reported losses were in the tens of thousands, but who knows how much it really was.  We have no idea whether our report was instrumental, but the timing suggested that it was.  The other guy continues to ...