Most of my friends know me as a vegetarian, or at least as someone who professes vegetarianism. Back in my 20's, I was a militant vegetarian - I ate no meat - but that was a result of the rules of the Pritikin diet more than anything else, if I remember correctly (turns out my memory is not that great, Pritikin is not a vegetarian diet!). Somewhere along the way I decided that having a little meat in my diet was a good thing, and I have moderated my diet accordingly in the years since then. Actually I have a pretty anti-American diet at the moment (don't eat chicken, nor pizza, and no popcorn or processed food generally), but I digress.
This past week I have consumed much more than usual the meats of the regions of France. Since coming to France, I have indulged my fondness for foie gras (goose liver) on several occasions, and had the opportunity to do so again at the dinner hosted by my Nice friends last week. Odette served foie gras on thick bread (slightly unusual) for an appetizer (they call them "entrees" in France) when we went to her home for dinner. It was lovely. They served champagne with our pre-dinner tastes, which was also very French (Americans tend not to know of champagne as an apéritif). I followed up that lovely foie gras with a homemade foie gras in the restaurant Le Moorea on the waterfront of St.-Laurent-du-Var the next day. My friend Erick joined my parents and me for lunch, and we all sampled different dishes. Not too big a shellfish person (the menu was mostly seafood), I opted for the foie gras entrée - with champagne, of course. It was yummy. (We ended the meal with a chocolate moelleux - a chocolate cake with chocolate fondant in the middle - served warm - luscious!)
My next adventure with viande (meat) was at Belle de Nuit, our Chambre d'Hote in Oppède le vieux. We chose to have dinner at the bed and breakfast; it was served in the restaurant located in the former bakery in the basement (cave) of the 400 year old building. Our dinner that night featured duck; thinly sliced and very red - and very tasty. It had been quite a while since I had had canard (duck), and I enjoyed it. Dessert that night was an individual apricot tart with homemade vanilla ice cream. (I gave my ice cream to Priscilla, another un-Americanism of mine - stay away from ice cream - two decades of the stuff was enough for me!).
Meanwhile, back at home in Nice, my dad and I were enjoying some German meats that my friend Christiane had brought back from her visit to her homeland. I remembered that my Dad enjoyed the German cuisine, so I asked her to bring some representative meat selections back with her. And she happily complied. She brought us some pine-cured ham (excellent competition for Italian prosciutto), some liverwurst, also pine-cured, and tasty, and some "farm spread," which is another type of spreadable ham product. The liverwurst-type spread lasted the longest, but it was also the best, from my point of view. Just a little goes a long way!
I continue to buy the inexpensive "mousse de canard" here in my local shopping market (Casino) (although Odette told me I should buy the good stuff instead), which I like on crackers with Dijon mustard and maybe a strip of brie. Add a small glass of white burgundy, et bon appétit!
The gastronomic adventure continues...
Monday, February 23, 2009
SEC: Build Teams to Fight Fraud
My op-ed, rejected by the Washington Post....
* * * *
The arrival of Mary Shapiro at the helm of the Securities and Exchange Commission is good news for the embattled agency. Ms. Shapiro, a former Commissioner, has already announced changes she will make to existing practices at the agency, including the process for obtaining approval for a formal order of investigation and the approval process for levying financial penalties. Staff attorneys in the Enforcement Division are already feeling re-energized, I am sure. A renewed focus on the work of protecting investors in the US financial markets, the mission of the SEC, is welcome.
But the changes that Chairman Shapiro is making, and will continue to make, will only change the process of Enforcement at the Commission. What also needs attention from the Chairman, and from the new head of the Enforcement Division, is on the staff that is doing the work of the Division. I believe that one of the continuing weaknesses in the Enforcement Division is that there are not enough of the right people involved in fraud investigations.
Without personal knowledge of the investigation of Bernard Madoff, I would hazard a guess that the attorney investigating Mr. Madoff, while perhaps professionally motivated to bring a case against one of the biggest names in the securities industry, had neither the accounting skills nor the investing experience to be able to diagnose exactly what Madoff was doing in a way that would have allowed the investigation to go forward. (Ignoring the fact that that evidence was presented to the agency by Mr. Markopolous regarding the fraud.)
I was an attorney in the Commission’s Enforcement Division in Washington, DC right after I graduated from law school. I was a highly motivated individual who had a passionate interest in the stock market and was eager to play an important role in the agency’s mission. I was assigned to a branch where I was working with equally motivated attorneys. My group worked long hours, aggressively pursued cases, and congratulated ourselves when we were successful in bringing down yet another fraud in the marketplace. I left the agency proud of my work there.
I left the commission to attend business school, after which I went to work as a consultant in the financial services industry. Once I started working at my clients, I realized how little I knew as a young attorney about the inner workings of the securities industry. I had been educated in the securities laws, and the commission made excellent continuing education classes available, but I think my own lack of specific knowledge of the industry I was investigating was a hindrance in my investigations at the time. I certainly had the resources, and utilized them, to educate myself on repos, junk bonds, parking securities, and proxy fights – but that was valuable time lost in the investigation. When I think about the other experienced attorneys I worked with in the Commission, many of whom have gone on to work in the industry they formerly regulated, I wonder that many of them also haven’t had the same thoughts upon leaving the Commission. No matter how good an attorney you may be, if you have never sat on a trading floor or processed a trade ticket in the back office, you don’t really know what goes on in that world, or know why people do what they do. I wished I’d had some of that knowledge when I was doing my investigations.
Knowing what I know now about the financial industry from the inside, I think our best independent government agency could be better. The SEC has always prided itself on the quality of the lawyers, accountants and economists that work there, and they are indeed among the best and the brightest. But I think the SEC could be a better regulator if it hired people from inside the industry to join in analyzing potential fraud schemes, to assist in unlocking market jargon, and anticipate new frauds. It’s easy to say, Those types of people will never come work for the government; you can’t pay them enough. But that’s too easy. My guess is that you could create one or two year positions in the division with the specific intent of filling them with public-service minded folks who would welcome the opportunity to come work for the government for a specific time period. When Joseph P. Kennedy, Sr. was named the first SEC Chairman, President Franklin D. Roosevelt knew exactly what he was doing, asking one of the then most active speculators in the financial world to lead the new regulatory body. We need to continue to do the same thing, bring in industry players to help regulate the world they know best. It was a good idea then; it’s a good idea now.
* * * *
The arrival of Mary Shapiro at the helm of the Securities and Exchange Commission is good news for the embattled agency. Ms. Shapiro, a former Commissioner, has already announced changes she will make to existing practices at the agency, including the process for obtaining approval for a formal order of investigation and the approval process for levying financial penalties. Staff attorneys in the Enforcement Division are already feeling re-energized, I am sure. A renewed focus on the work of protecting investors in the US financial markets, the mission of the SEC, is welcome.
But the changes that Chairman Shapiro is making, and will continue to make, will only change the process of Enforcement at the Commission. What also needs attention from the Chairman, and from the new head of the Enforcement Division, is on the staff that is doing the work of the Division. I believe that one of the continuing weaknesses in the Enforcement Division is that there are not enough of the right people involved in fraud investigations.
Without personal knowledge of the investigation of Bernard Madoff, I would hazard a guess that the attorney investigating Mr. Madoff, while perhaps professionally motivated to bring a case against one of the biggest names in the securities industry, had neither the accounting skills nor the investing experience to be able to diagnose exactly what Madoff was doing in a way that would have allowed the investigation to go forward. (Ignoring the fact that that evidence was presented to the agency by Mr. Markopolous regarding the fraud.)
I was an attorney in the Commission’s Enforcement Division in Washington, DC right after I graduated from law school. I was a highly motivated individual who had a passionate interest in the stock market and was eager to play an important role in the agency’s mission. I was assigned to a branch where I was working with equally motivated attorneys. My group worked long hours, aggressively pursued cases, and congratulated ourselves when we were successful in bringing down yet another fraud in the marketplace. I left the agency proud of my work there.
I left the commission to attend business school, after which I went to work as a consultant in the financial services industry. Once I started working at my clients, I realized how little I knew as a young attorney about the inner workings of the securities industry. I had been educated in the securities laws, and the commission made excellent continuing education classes available, but I think my own lack of specific knowledge of the industry I was investigating was a hindrance in my investigations at the time. I certainly had the resources, and utilized them, to educate myself on repos, junk bonds, parking securities, and proxy fights – but that was valuable time lost in the investigation. When I think about the other experienced attorneys I worked with in the Commission, many of whom have gone on to work in the industry they formerly regulated, I wonder that many of them also haven’t had the same thoughts upon leaving the Commission. No matter how good an attorney you may be, if you have never sat on a trading floor or processed a trade ticket in the back office, you don’t really know what goes on in that world, or know why people do what they do. I wished I’d had some of that knowledge when I was doing my investigations.
Knowing what I know now about the financial industry from the inside, I think our best independent government agency could be better. The SEC has always prided itself on the quality of the lawyers, accountants and economists that work there, and they are indeed among the best and the brightest. But I think the SEC could be a better regulator if it hired people from inside the industry to join in analyzing potential fraud schemes, to assist in unlocking market jargon, and anticipate new frauds. It’s easy to say, Those types of people will never come work for the government; you can’t pay them enough. But that’s too easy. My guess is that you could create one or two year positions in the division with the specific intent of filling them with public-service minded folks who would welcome the opportunity to come work for the government for a specific time period. When Joseph P. Kennedy, Sr. was named the first SEC Chairman, President Franklin D. Roosevelt knew exactly what he was doing, asking one of the then most active speculators in the financial world to lead the new regulatory body. We need to continue to do the same thing, bring in industry players to help regulate the world they know best. It was a good idea then; it’s a good idea now.
Friday, February 20, 2009
Nice Tour Guiding
I'm writing from Belle de Nuit, a bed & breakfast in Oppede le Vieux, in the Luberon Valley in the Provencal region, in France. Mom and Dad and I are sharing a room a lovely room in this 400 year old hotel, which is very cold in a very cold February in southern France! A bit of a change from Nice, but it's been a good visit. We drove out from Nice on Thursday, visited Aix-en-Provence and then headed north-east to Oppede. Oppede-le-Vieux is town, several hundred years old, castle and cathedral on the top of a hill (350 meters), which is now crumbled and ancient, but provides a lovely view of the valley. Our proprietors, Laurie and Roger, are lovely, and given that she is Canadian, (he's from Marseille), they both speak English, which is nice for my parents.
We spent Friday in Avignon, walking through the old town, looking out at the Pont d'Avignon on the Rhone River, eating a picnic lunch in the gardens of the Palais de Papes, and then enjoyed coffee and a beignet in the sun at an outside cafe in town. We followed that by a drive to Gordes, a perched town in the Luberon Valley, and a quick visit to the Monastery in the area. We finished the day with dinner in the town on Bonneaux, about 20 KM from Oppede. The stars were out in force tonight.
Mom and Dad arrived in town on the 13th of February, and that night we went to the center of town to watch opening night of Carnaval in Nice. See pictures alongside! The next day, Priscilla joined us for the Bataille des Fleurs (Battle of the Flowers), a kind of Rose Parade along the Mediterranean, where mimosa flowers were the predominate flower being showcased on floats and being flung into the stands of parade watchers. My friend Christiane joined the four of us for dinner that night (ratatouille, basmati rice, cheese, bread, and brownies for dessert). It was a festive evening.
Sunday my parents joined me at church at the Eglise Reformee on Boulevard Victor Hugo (see earlier posts). I introduced them to my friends Odette and Philippe, who promptly invited us over for dinner. We not only met them for dinner on Tuesday night, but had coffee with them after our visit to the Chagall Museum on Sunday afternoon. Odette and Philippe are both very good in English, and they invited a neighbor of theirs who also spoke good English to dinner at their home. It was a lovely evening of sharing, and getting to know them better.
More when we get back to Nice!
We spent Friday in Avignon, walking through the old town, looking out at the Pont d'Avignon on the Rhone River, eating a picnic lunch in the gardens of the Palais de Papes, and then enjoyed coffee and a beignet in the sun at an outside cafe in town. We followed that by a drive to Gordes, a perched town in the Luberon Valley, and a quick visit to the Monastery in the area. We finished the day with dinner in the town on Bonneaux, about 20 KM from Oppede. The stars were out in force tonight.
Mom and Dad arrived in town on the 13th of February, and that night we went to the center of town to watch opening night of Carnaval in Nice. See pictures alongside! The next day, Priscilla joined us for the Bataille des Fleurs (Battle of the Flowers), a kind of Rose Parade along the Mediterranean, where mimosa flowers were the predominate flower being showcased on floats and being flung into the stands of parade watchers. My friend Christiane joined the four of us for dinner that night (ratatouille, basmati rice, cheese, bread, and brownies for dessert). It was a festive evening.
Sunday my parents joined me at church at the Eglise Reformee on Boulevard Victor Hugo (see earlier posts). I introduced them to my friends Odette and Philippe, who promptly invited us over for dinner. We not only met them for dinner on Tuesday night, but had coffee with them after our visit to the Chagall Museum on Sunday afternoon. Odette and Philippe are both very good in English, and they invited a neighbor of theirs who also spoke good English to dinner at their home. It was a lovely evening of sharing, and getting to know them better.
More when we get back to Nice!
Monday, February 9, 2009
February Update
Hey friends, the sun was shining today in Nice, as it was in most of the Northeast, as far as I hear. I was in London last week, just after the big snowstorm that pretty much closed down the southern part of the United Kingdom (and left before the next storm), but by the time I was there, the sun was melting most of it. I took some pictures of melted snowmen, but mostly I heard people talking about the weather (but don't they always?). I was only in London for a few days, but I had a chance to do some walking around, shopping (was determined to find some good marmalade and British biscuits), and catching up with a college classmate. I met up with my co-author to finish up some brainstorming on our article (see Toxic Assets, below), and we enjoyed some good Indian food one night. I stayed at St. Martin's Lane, a way cool hotel in the West End, a short walk from Trafalgar Square and the Leicester Square tube spot. There was an excellent gym right next door too. London is one of the cities in which I am focusing my job search, and my friend had some good suggestions for me to follow up on. I know I would enjoy living there (weather excepted!)
My parents are on their way to Nice on Thursday, and I am looking forward to seeing them and being their host here in my adopted city. I will give you the updates on their visit shortly.
Until then, enjoy the break in the weather!
My parents are on their way to Nice on Thursday, and I am looking forward to seeing them and being their host here in my adopted city. I will give you the updates on their visit shortly.
Until then, enjoy the break in the weather!
Living on Two Continents
When I moved to France, I rented out my condo, put all my things in a storage unit, and headed off across the ocean, thinking that I had closed down my life in Virginia and was starting anew in Nice. Well, I wasn’t that naïve. Before I left the States, I created a budget that included both items that I expected to spend money on in France and those things I would continue to spend money on in the US. Obviously, I would continue paying my mortgage and my condo fees (to be offset by my tenant’s monthly rent.) I knew that I would continue my AT&T Wireless cellphone service, my Verizon Wireless service (for my computer), and that I would be paying for my storage unit. (I had had a storage unit since I moved into the condo; I simply upgraded square footage when I moved.) I had also been warned about health insurance, and specifically international health insurance, so I budgeted some money for that as well.
It all sounded so easy at the time. I’ve since learned that it’s not that easy to manage one’s US affairs internationally, but I know that it would have been nearly disastrous and impossible without the Internet – and my amazingly patient and helpful parents, who have made all this possible. Here, in some more detail, are the little things that have consumed my time in France, far more than I expected I would!
US Mail
The first thing that I felt I needed to figure out when I decided to move abroad was where my US residence would be when I left. Since I was renting out my condominium, it could no longer be that address in Arlington. I considered asking my sister if I could use her address, but that thought was brief – she has a crazy enough life as it is, so adding my mail to her world would be unquestionably overwhelming. The default was my parents –they still live in the home I grew up in, and it would be easy for the postman delivering mail, as my last name is the same as theirs. And my parents presumably had the patience to absorb my mail stream. Little did I know!
Before I left, I made a detailed list (actually, revived a list I had created four years previous, when I last moved) of those companies and institutions from whom I received mail, and began the process of updating my address to that of my parents. It was at this moment that I finally appreciated the opportunity afforded me by most of my financial institutions to switch to “paperless” records – which would mean that I could access all of my records over the internet, sparing my parents the receipt of bills, airline mileage updates, and brokerage reports.
I had heretofore been a paper addict of sorts, I liked receiving snail mail, and looked forward to the contents of my mailbox daily. But I realized that my parents were probably not quite as eager for stack of paper as I had been. When I finally left the States, and left my forwarding address with the US Postal Service, it became clear how much mail I did receive on a regular basis. My mother told me that the Postman even had commented on the sudden heavy mailbag that he was carrying around. And I realized how lucky that I had an organized and attentive father, who not only made sure to pile up my mail separately from that of their household, but began a process of making lists of the mail I had received, with some detailed descriptions, and sending it to me every two weeks, asking me what to do with the various pieces in the pile. Given that I was expecting some things, and not expecting others, this service he provides is invaluable. Knowing what I know now, if I did this again, I would hire someone to do this for me! (And I’m grateful that my dad is also accepting rent payments from my tenants; we tried to do wire transfers, but my tenants and I agreed after one month that that was too expensive!)
Telecommunications
While the first thing I did when I moved to France was to buy a cell phone (here they call them portables, or mobile phones), there was no question in my mind when I left the States that I would continue my US cellphone service. A few years ago I had bought a GSM Motorola phone and international service on it, and knew it would come in handy overseas when I needed it. I also anticipated that I would return to the States, and saw no point in cancelling a telephone whose number I would like to hold onto as long as possible. I came to appreciate, once again, the online services provided by AT&T Wireless, which allow me to start and stop services on my phone at my whim. It took me a while to get sophisticated about this, but now I remember to add a text package to my phone when I will be in the States, and to cancel it when I return to France. It is also wonderful to have the cellphone when I am in the US, as all my friends have my telephone number there, and after not using my phone for a few months, I have tons of minutes to use up while I am there.
I didn’t realize it at the time, but many businesses (doctors, dentists, and universities) that I have dealt with over the years have the number too, and I have periodically received voice messages from these folks, which I am able to access in France. Very useful. The other function I have used frequently overseas is the ability to check my Yahoo mail on my phone. It is very cheap to log on wherever I am in Europe and read my mail. (Cheaper than going to an internet café!) Three years ago it proved its value when I received an email while my family was in Italy regarding the hospitalization of a dear friend of mine.
My other indulgence with respect to telecommunications in the US was to maintain my service with Verizon Wireless, with whom I have an account for internet access on my laptop computer. I had signed up for a year’s contract in January 2008, so there was no reason to cancel it (with it's outsized penalty) when I left the States in August. And I have been happy to pay the monthly bill ($60) for the complete ease of access when I have been back in the States since. It is a national access program, so I can go online wherever I am – on the bus, on the train, at my friend’s house, in the ski condo in Vermont, in the Starbucks in Manhattan. That has been worth the money to me. Seeing that it took me so long to get a computer of my own, my addiction to wireless was a major leap of faith. But I’m hooked, and it’s now what I have in my apartment in France too.
Insurance
Obtaining international medical insurance was one of the many things that my friend Priscilla put on the list of things I should have when I moved overseas. I actually thought that getting US medical insurance was the priority, given that upon leaving my corporate job, I had lost it. I attempted to get insurance on my own through eInsurance.com as suggested by one of the independent contractors working for me at the time. It would have been extremely cheap, but I learned, the day I was leaving for France, that my application was denied. Which pretty much sucked. I was forced to look back through my Employee Exit Materials and find the information about COBRA benefits for extending my health insurance. And was stunned to learn that I would pay nearly five times when I had budgeted for monthly health insurance premiums. Arghh! This is what they mean when our health system is the worst in the modern world. If you are rich, you can afford health care. If you aren’t, you can’t.
So, I signed up for the 18 months I’m eligible for. And decided it was worth it. Five months later, when I got a call from my doctor’s office that their claim for services was denied, I wasn’t so sure. I got online and started shooting emails to Aetna and Ceridian, my health care provider and COBRA service provider, respectively, to figure out what was going on. I made the case to Ceridian that I was paying them a whole lot of money to be covered, and Aetna didn’t have records of that at all. At the end of the day, it seemed that the “automated” updates Ceridian sent Aetna had not updated their records, but the “manual” update they sent did the trick, apparently. When I wrote and asked that someone pick up the phone and talk to the other side, the reply was that that was not appropriate. I’m glad I never sent my email reply.
I waited some period of time to actually get international health insurance. The fact of the matter is that my US health insurance would not cover me for anything over here in France, however. I found a website with some options and priced it out, and after some conversation with my Dad about the risk of not having it versus the cost, I went ahead in November and signed up. I’m not prone to doing dumb things, but you never know, and the $1000 seemed a reasonable way to feel reassured in case of some catastrophe.
Other topics in this vein – maintaining bank accounts in two countries and managing Christmas card distribution. If you have a specific interest, let me know!
It all sounded so easy at the time. I’ve since learned that it’s not that easy to manage one’s US affairs internationally, but I know that it would have been nearly disastrous and impossible without the Internet – and my amazingly patient and helpful parents, who have made all this possible. Here, in some more detail, are the little things that have consumed my time in France, far more than I expected I would!
US Mail
The first thing that I felt I needed to figure out when I decided to move abroad was where my US residence would be when I left. Since I was renting out my condominium, it could no longer be that address in Arlington. I considered asking my sister if I could use her address, but that thought was brief – she has a crazy enough life as it is, so adding my mail to her world would be unquestionably overwhelming. The default was my parents –they still live in the home I grew up in, and it would be easy for the postman delivering mail, as my last name is the same as theirs. And my parents presumably had the patience to absorb my mail stream. Little did I know!
Before I left, I made a detailed list (actually, revived a list I had created four years previous, when I last moved) of those companies and institutions from whom I received mail, and began the process of updating my address to that of my parents. It was at this moment that I finally appreciated the opportunity afforded me by most of my financial institutions to switch to “paperless” records – which would mean that I could access all of my records over the internet, sparing my parents the receipt of bills, airline mileage updates, and brokerage reports.
I had heretofore been a paper addict of sorts, I liked receiving snail mail, and looked forward to the contents of my mailbox daily. But I realized that my parents were probably not quite as eager for stack of paper as I had been. When I finally left the States, and left my forwarding address with the US Postal Service, it became clear how much mail I did receive on a regular basis. My mother told me that the Postman even had commented on the sudden heavy mailbag that he was carrying around. And I realized how lucky that I had an organized and attentive father, who not only made sure to pile up my mail separately from that of their household, but began a process of making lists of the mail I had received, with some detailed descriptions, and sending it to me every two weeks, asking me what to do with the various pieces in the pile. Given that I was expecting some things, and not expecting others, this service he provides is invaluable. Knowing what I know now, if I did this again, I would hire someone to do this for me! (And I’m grateful that my dad is also accepting rent payments from my tenants; we tried to do wire transfers, but my tenants and I agreed after one month that that was too expensive!)
Telecommunications
While the first thing I did when I moved to France was to buy a cell phone (here they call them portables, or mobile phones), there was no question in my mind when I left the States that I would continue my US cellphone service. A few years ago I had bought a GSM Motorola phone and international service on it, and knew it would come in handy overseas when I needed it. I also anticipated that I would return to the States, and saw no point in cancelling a telephone whose number I would like to hold onto as long as possible. I came to appreciate, once again, the online services provided by AT&T Wireless, which allow me to start and stop services on my phone at my whim. It took me a while to get sophisticated about this, but now I remember to add a text package to my phone when I will be in the States, and to cancel it when I return to France. It is also wonderful to have the cellphone when I am in the US, as all my friends have my telephone number there, and after not using my phone for a few months, I have tons of minutes to use up while I am there.
I didn’t realize it at the time, but many businesses (doctors, dentists, and universities) that I have dealt with over the years have the number too, and I have periodically received voice messages from these folks, which I am able to access in France. Very useful. The other function I have used frequently overseas is the ability to check my Yahoo mail on my phone. It is very cheap to log on wherever I am in Europe and read my mail. (Cheaper than going to an internet café!) Three years ago it proved its value when I received an email while my family was in Italy regarding the hospitalization of a dear friend of mine.
My other indulgence with respect to telecommunications in the US was to maintain my service with Verizon Wireless, with whom I have an account for internet access on my laptop computer. I had signed up for a year’s contract in January 2008, so there was no reason to cancel it (with it's outsized penalty) when I left the States in August. And I have been happy to pay the monthly bill ($60) for the complete ease of access when I have been back in the States since. It is a national access program, so I can go online wherever I am – on the bus, on the train, at my friend’s house, in the ski condo in Vermont, in the Starbucks in Manhattan. That has been worth the money to me. Seeing that it took me so long to get a computer of my own, my addiction to wireless was a major leap of faith. But I’m hooked, and it’s now what I have in my apartment in France too.
Insurance
Obtaining international medical insurance was one of the many things that my friend Priscilla put on the list of things I should have when I moved overseas. I actually thought that getting US medical insurance was the priority, given that upon leaving my corporate job, I had lost it. I attempted to get insurance on my own through eInsurance.com as suggested by one of the independent contractors working for me at the time. It would have been extremely cheap, but I learned, the day I was leaving for France, that my application was denied. Which pretty much sucked. I was forced to look back through my Employee Exit Materials and find the information about COBRA benefits for extending my health insurance. And was stunned to learn that I would pay nearly five times when I had budgeted for monthly health insurance premiums. Arghh! This is what they mean when our health system is the worst in the modern world. If you are rich, you can afford health care. If you aren’t, you can’t.
So, I signed up for the 18 months I’m eligible for. And decided it was worth it. Five months later, when I got a call from my doctor’s office that their claim for services was denied, I wasn’t so sure. I got online and started shooting emails to Aetna and Ceridian, my health care provider and COBRA service provider, respectively, to figure out what was going on. I made the case to Ceridian that I was paying them a whole lot of money to be covered, and Aetna didn’t have records of that at all. At the end of the day, it seemed that the “automated” updates Ceridian sent Aetna had not updated their records, but the “manual” update they sent did the trick, apparently. When I wrote and asked that someone pick up the phone and talk to the other side, the reply was that that was not appropriate. I’m glad I never sent my email reply.
I waited some period of time to actually get international health insurance. The fact of the matter is that my US health insurance would not cover me for anything over here in France, however. I found a website with some options and priced it out, and after some conversation with my Dad about the risk of not having it versus the cost, I went ahead in November and signed up. I’m not prone to doing dumb things, but you never know, and the $1000 seemed a reasonable way to feel reassured in case of some catastrophe.
Other topics in this vein – maintaining bank accounts in two countries and managing Christmas card distribution. If you have a specific interest, let me know!
Monday, February 2, 2009
Working Title: Tracking Down Toxic Assets
Here's the first page of an article looking at how we figure out what's in those "toxic assets" which everyone wants to throw into a "bad bank."
* * *
Introduction - We're not moving fast enough.
While there has been much handwringing by financial market observers, regulators, elected officials and others as our banking industry sways back and forth on the edge of a precipice, it appears that there is little understanding (but much fear) of the magnitude of the collapse of the credit markets on our banks and other financial institutions, and exactly where, and with whom, the problem lies. The consensus is that the collapse of the subprime mortgage market was a major cause of the current crisis. Asset-backed securities (ABS) and securitized assets created from the subprime mortgages originated in the now collapsed housing market make up the bulk of the so-called “toxic assets” now found in the portfolios of troubled banks. By identifying these assets and their owners, and establishing values (or a lack thereof) for them, the federal government and others will be better able to make informed judgments about what to do next, whether to absorb the assets of these institutions, or recapitalize those banks that need it.
Identifying the assets and establishing values for them is not an impossible task. There are threads to untangle, relationships to understand, and documents to review, all of which in the end will help us answer the question “how much?” But time is of the essence.
Make no mistake, this is a mess. The securitization market is complex, and was made more so as it burgeoned throughout 2006 and 2007. There are no central sources of unbiased, normalized information. Further, the picture of those who participated in this market is a moving target. The financial services industry has evolved faster in this decade than ever before, by any consensus description shared among knowledgeable participants, and new sub-sectors are emerging annually. The evolution of sub-prime mortgage origination mechanisms was only one of those feeding the explosion in types and volumes of derivative instruments. Importantly, it was also one at the center of the least regulated (and, hence, least documented) growth areas for structured financial instruments. Many of the originators of subprime loans are no longer in business; many of the institutions that bought and sold these products are no longer, or have been bought up or split up. Individuals who sold or structured the deals have disappeared. Put simply, the landscape has radically changed since the market exploded in 2006.
To unwind these securities, one must go back in time to re-create connections and transactions. Hindsight in this case is not likely to be flattering, but an accurate postmortem is critical if we are to learn from our mistakes. We are living through a significant, if not the most significant ever, credit crisis. This is not the first time, however, that markets have shown themselves to be inherently unstable in a given set of circumstances. Fortunately, we are living in a time where history itself is changing – we have audit trails and methods for deducing and analyzing recent past transactions and relationships that did not exist in prior crises.
There are three layers to understand as we begin the process of dissecting the asset-backed security/securitization market:
• The Participants – Sources of Investment Capital, Intermediaries, or Product Providers, those operating in and around what we call the “Trading Zone”
• The Instruments – Securitized assets, including their valuation components, and
• The Relationships between the Participants and the Instruments.
....
* * *
Introduction - We're not moving fast enough.
While there has been much handwringing by financial market observers, regulators, elected officials and others as our banking industry sways back and forth on the edge of a precipice, it appears that there is little understanding (but much fear) of the magnitude of the collapse of the credit markets on our banks and other financial institutions, and exactly where, and with whom, the problem lies. The consensus is that the collapse of the subprime mortgage market was a major cause of the current crisis. Asset-backed securities (ABS) and securitized assets created from the subprime mortgages originated in the now collapsed housing market make up the bulk of the so-called “toxic assets” now found in the portfolios of troubled banks. By identifying these assets and their owners, and establishing values (or a lack thereof) for them, the federal government and others will be better able to make informed judgments about what to do next, whether to absorb the assets of these institutions, or recapitalize those banks that need it.
Identifying the assets and establishing values for them is not an impossible task. There are threads to untangle, relationships to understand, and documents to review, all of which in the end will help us answer the question “how much?” But time is of the essence.
Make no mistake, this is a mess. The securitization market is complex, and was made more so as it burgeoned throughout 2006 and 2007. There are no central sources of unbiased, normalized information. Further, the picture of those who participated in this market is a moving target. The financial services industry has evolved faster in this decade than ever before, by any consensus description shared among knowledgeable participants, and new sub-sectors are emerging annually. The evolution of sub-prime mortgage origination mechanisms was only one of those feeding the explosion in types and volumes of derivative instruments. Importantly, it was also one at the center of the least regulated (and, hence, least documented) growth areas for structured financial instruments. Many of the originators of subprime loans are no longer in business; many of the institutions that bought and sold these products are no longer, or have been bought up or split up. Individuals who sold or structured the deals have disappeared. Put simply, the landscape has radically changed since the market exploded in 2006.
To unwind these securities, one must go back in time to re-create connections and transactions. Hindsight in this case is not likely to be flattering, but an accurate postmortem is critical if we are to learn from our mistakes. We are living through a significant, if not the most significant ever, credit crisis. This is not the first time, however, that markets have shown themselves to be inherently unstable in a given set of circumstances. Fortunately, we are living in a time where history itself is changing – we have audit trails and methods for deducing and analyzing recent past transactions and relationships that did not exist in prior crises.
There are three layers to understand as we begin the process of dissecting the asset-backed security/securitization market:
• The Participants – Sources of Investment Capital, Intermediaries, or Product Providers, those operating in and around what we call the “Trading Zone”
• The Instruments – Securitized assets, including their valuation components, and
• The Relationships between the Participants and the Instruments.
....
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