Not sure if it's because of a dearth of commissioners, because there's apparently a global financial crisis going on, or because of those Sudan divestment safe harbor regs, but the SEC, by its own account, is taking twice as long to rule on appeals from ALJ and SRO adjudications than it did a year ago.  Check out these charts (and, as Gordon and I were just lamenting to one another, if it was a bit easier to take pdf pix and put them in Typepad, we'd reproduce them on this page all nice and pretty for you).  Anyway, the median age of pending appeals from ALJs is 419 days, up from 210 in the prior semi-year, while the median age of pending appeals from SROs is 325 up from 284.  All this while the number of pending appeals has increased only slightly or stayed flat.

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Josh Wright weighs in interestingly here.  Meanwhile, Ngan Dinh collects advice for young economists here (HT: ND).  I find the tenor of the advice to be pretty different than the sort usually given to non-interdisciplinary law professors - and that's pretty interesting too.

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The editors of the Bluebook are at it again!  In anticipation of leaving their mark on the citation world in the next edition, the editors are asking for input.  Here is a survey you can fill out.  Ten participants will be chosen at random to receive a free copy of the Nineteenth Edition!  Email suggestions may also be sent to suggestions@legalbluebook.com.

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After the SEC went after a short seller for spreading false rumors - unprecedented, apparently - it's worth looking to see if economists, the lonely defenders of the shorts, are still on board.  Maybe not, at least not in every case, such as if damage to the stock price might deter the firm from useful, announced plans.  Here's a blog post, here's a story, and here's the paper, written in part by, I must note, a colleague of mine.

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It sounds like the plot of a Hannah Montana episode: 

Hannah Montana/Miley Stewart is super-excited when she finds out that she's going to be photographed by one of the most famous celebrity photographers around, known for her artsy magazine photos that reveal her subjects' inner characters.  However, her excitement turns to embarassment when the published pictures turn out to be well, less artsy than revealing.

Unfortunately, this is real life.  Vanity Fair magazine is about to hit the stands with a photo shoot of Miley Cyrus by Annie Leibowitz that features the 15-year-old clothed only in a satin bedsheet, with rumpled hair and much skin revealed.  (NYT story here.)  The Miley Cyrus camp is now claiming that MIley is surprised by how revealing the pictures are and that she thought the pictures would be "artsy."  Leibowitz is saying that Miley's "parents/minders" were there all day and saw the digital pictures as they were being shot.  (Vanity Fair has even posted a video of the shoot to back up this claim, although the video pictures both Miley and her dad in different outfits outside.)  The pictures throw Miley in even a more embarassing light as a quote from Miley is printed across them -- a quote in which she states that Britney and Lindsey have good hearts and are "struggling."

Of course, in the TV show, Miley's dad, Robby Stewart, played by her real-life dad, Billy Ray Cyrus, would have stopped the shoot the second someone said, "OK, now Miley we want you to take all your clothes off and just wrap yourself in this sheet."  We have to wonder why none of her parents/minders jumped in during real life.  It's obvious why a photographer known for controversial celebrity photographs would want to get pictures of a 15-year-old squeaky clean Disney actress with bedhead in a bedsheet, but the parents that allow it seem to have to carry the heavy blame here.

At least I never stood in line for Hannah Montana tickets. . . .Gordon?

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Ethiopis Tafara, the SEC's international chief, testified today that:

the SEC has in place several rules that require disclosure of certain sovereign wealth fund activities and sovereign business activities that could raise many of the concerns we hear in our own and other markets. None of these disclosure requirements was designed with sovereign wealth funds or sovereign businesses in mind, but they are nonetheless of value in this context to the extent that many of the concerns that sovereign investing raises are similar to concerns about other types of investment.

Are SWFs so different from other big funds?  CFIUS might think so, but anyone, at home or abroad, might choose to act in a non-profit maximizing way for a little while (to help the party you support, for example, or the country whose favor you are trying to gain).  And in the long run, everyone who does so should be subject to market discipline.  So a lot turns on the idea that the sovereigns may prevent their own regulators from cooperating with the SEC on investigations.  I wonder if that is an important enough problem to require legislation.

On the other hand, providing SWFs with tax advantages ... that's a bit more mysterious.

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Coming out just in time for Berkshire Hathaway's annual meeting: the second edition of The Essays of Warren Buffett, by, well, Warren Buffett, and edited by Conglomerate guest Lawrence Cunningham.  The first edition may belong in the canon of business literature.  (Not entirely related news about it here, and some reviews of the first edition here.)  The second edition contains Buffett's views on CEO pay, how General Re handled complex derivative instruments (and remember, Buffett only buys companies with businesses he can understand), and Berkshire Hathaway succession, which I've been wondering about.  You know what to do.

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AG Michael Mukasey suggested today that organized crime is taking over our financial markets.  He dropped the word "billions."  But while many a politician (and movie-maker) likes to suggest that the criminals are bigger than US Steel, we here at the Glom know that you sorta need to read between the lines when the leadership starts talking about secret conspiracies.  What was Mukasey really after?  Al Qaeda?  Banks annoyed by their reporting requirements?  Did he want to justify FinCEN's budget?  The speech looks a bit directed at Congress ("we're starting a task force with your money!"), a bit directed at foreign governments ("we love it when you let the FBI come and visit!"), and a bit directed at the ... Russians?

The criminals operating these schemes are willing to move money for anyone who needs to hide the source, ownership, or destination of the funds--no questions asked.  They corrupt banking officials and exploit lax anti-money-laundering protections around the world to inject illicit funds into the global money stream.  By all estimates, such schemes move billions of dollars every year through U.S. financial institutions.

A good example is the case of Garri Grigorian, a Russian national living in the United States who helped launder more than $130 million on behalf of the Moscow-based Intellect Bank and its customers, through bank accounts in Sandy, Utah.  Grigorian and his co-conspirators set up three U.S. shell companies, and then set up bank accounts for those companies in Utah and New York.

UPDATE: Click through to see the other two mentions of Russia in the speech, not to mention the Eastern European ones.  And here's the Law Blog's take.

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Bob Lawless explores why people don't walk away from homes with underwater mortgages.

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This fall the Virginia Law Review is hosting a symposium to mark the 75th anniversary of the SEC. It's an all-star lineup: Jack Coffee, Jim Cox, Don Langevoort, Adam Pritchard, Hillary Sale, Joel Seligman, and Bob Thompson. I hope they throw a nice party because the SEC is unlikely to be around for the 100th anniversary.

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In writing that last entry, I noticed that TripIt was nominated for a Webby Award.

Take a look around over there, and you will find some interesting sites, including several that I have blogged about here. Mint, the wonderful financial management tool, was nominated. So was epicurious, the recipe site that I use to cook the family meal each Sunday. TED is also a nominee.

I was surprised that I do not read any of the five nominated business blogs. Or any of the law blogs.

But I found a cool Pink Floyd site, a great site for searching airline and hotel fares, and blurb.

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Today on my walk home from work I finished listening to "Social Networking 3.0," a podcast over at the Stanford Technology Ventures Program. Several young social networking executives talked about the future of social networking (a term they all seemed to dislike), and I was struck by this point of view: social networking can enhance any website.

This was striking to me because I find most online social networking (besides blogging, to the extent that this constitutes "social networking") so clunky and burdensome and unrewarding. I have tried MySpace, Facebook, Ning, LinkedIn, etc. but none of those services has attracted a critical mass of my family and friends. So while I can imagine how online social networking would become meaningful to someone, at the moment the thought of making social networking a pervasive part of the online experience is not appealing to me.

Then again, maybe I just have the wrong attitude about social networking. I am looking for something to enhance my existing relationships, rather than something to find new relationships. This point comes home to me as I read about TripSay, a new travel site out of Finland, which promotes itself by stating: "Tripsay is a community of travelers, where you are presented with tips and ratings based on similarities to other users' profiles." On the one hand, I like the idea of getting tips and ratings from people like me, but I don't want to actually interact with any of those people. Unless I already know them. In short, I don't go to travel sites to meet new people.

So I probably will be avoiding WAYN ("Where Are You Now"), which also emphasizes new relationships. The front page of the site screams, "Make New Friends!" and "Meet people who will be in the same place as you!" Yikes!

Dopplr, "an online tool for frequent business travellers," sounds like a site that is more aligned with my perspective because it is designed primarily as a tool for enhancing existing relationships. As the site states, it works best when "you've already created some trips and have some trusted friends and colleagues with whom you're sharing some trips, and vice versa."

But my new favorite travel site may be the blandest of the bunch. TripIt, a "personal travel assistant that automatically organizes all your travel plans," emphasizes the function of the site as a place to store all of your travel information. The social piece ("Share your trips and see where you overlap with friends and colleagues") seems like an afterthought. With a summer full of travel ahead of me, TripIt seems like just the thing.

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ATL has some survey numbers.

And responses to this question: "How Much Does Your Debt Affect Your Decision To Join, Or Stay At, Your Firm?"

More than half said that their debt affected their choice either "very much" (34.6%) or "more than any other factor" (17.7%).

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Roger Lowenstein, the NYT's ace long-form business reporter, will dig deep into credit rating agencies in next week's magazine.  Probably nothing new to the Glom's readers, but Lowenstein sure knows how to break it all down:

In a practical sense, it was Moody’s and Standard & Poor’s that set the credit standards that determined which loans Wall Street could repackage and, ultimately, which borrowers would qualify. Effectively, they did the job that was expected of banks and government regulators. And today, they are a central culprit in the mortgage bust, in which the total loss has been projected at $250 billion and possibly much more.
[snip]
The Securities and Exchange Commission, faced with the question of how to measure the capital of broker-dealers, decided to penalize brokers for holding bonds that were less than investment-grade (the term applies to Moody’s 10 top grades). This prompted a question: investment grade according to whom? The S.E.C. opted to create a new category of officially designated rating agencies, and grandfathered the big three — S.&P., Moody’s and Fitch. In effect, the government outsourced its regulatory function to three for-profit companies.
[snip]
Issuers thus were forced to seek credit ratings (or else their bonds would not be marketable). The agencies — realizing they had a hot product and, what’s more, a captive market — started charging the very organizations whose bonds they were rating. This was an efficient way to do business, but it put the agencies in a conflicted position.

And so on.  Of note, Lowenstein walks us through how Moody's gave a particular subprime mortgage security its investment grade, and he quotes Glom book clubber Frank Partnoy.

UPDATE: And here's SEC chair Christopher Cox's testimony before the Senate today on credit rating agencies.  Here's what the SEC has in mind for the agencies:

To strengthen accountability, the new rules that the Commission will soon consider may include requirements for enhanced disclosures about ratings performance. ....To enhance transparency, the Commission may soon consider new rules that would require the disclosure of information about the assets underlying the mortgage-backed securities, CDOs, and other types of structured finance products they rate. ....The rules that the Commission will soon consider may also include provisions designed to ensure that enhanced disclosure about a firm's ratings performance affords other credit rating agencies, including newly recognized NRSROs, an opportunity to identify flaws or opportunities for improvement on their competitor's approach, or to demonstrate to investors that their credit ratings perform better.

  After the jump, check out just how much downgrading of subprime products the credit rating agencies have done, according to Cox.

• As of February 2008, Moody's had downgraded at least one tranche of 94.2% of the subprime RMBS issues it rated in 2006, including 100% of the 2006 RMBS backed by second-lien loans, and 76.9% of the issues rated in 2007. Overall, Moody's has downgraded 53.7% and 39.2% of all of its 2006 and 2007 subprime tranches, respectively.¹
  
 
• As of March 2008, S&P had downgraded 44.3% of the subprime tranches it rated between the first quarter of 2005 and the third quarter of 2007.³  This included 87.2% of securities backed by second lien mortgages.²
  
 
• As of December 2007, Fitch had downgraded approximately 34% of the subprime tranches it rated in 2006 and in the first quarter of 2007. In February 2008, Fitch placed all of the RMBS it rated in 2006 and the first quarter of 2007 backed by subprime first lien mortgages on Ratings Watch Negative.⁴
   

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William Easterly thinks that “home grown” development solutions, attempted by local leaders through “trial and error” are the only solutions that could make the lives of the poor better. He worked at the World Bank for a long time, and clearly hated being there, because he’s against the use of the bank and the IMF resources to require governments to implement any set of reforms. That’s any. No leveraging loans to insist on free markets, lower internal trade barriers, civil society reforms, human rights, you name it. Easterly thinks that bureaucracy, because it’s a bureaucracy, can’t solve problems – even the smart development bureaucrats in Washington, and definitely the venal local bureaucrats of the developing world. I vaguely tire of this sort of overkill - are government bureaucrats really so different than corporate bureaucrats for, say, Tata, who do plenty of poverty alleviation? Are their incentives so very different? Easterly appears to buy the whole canard about turf and budget maximization, about which there is very little empirical evidence – I’ll bet just as much as there is for a division of a water utility. Still, you can listen to him go to town on development aid in this interesting podcast.

But I’m interested in the similarity between Easterly, the development aid skeptic from the right, and Dani Rodrik, the skeptic from the left. Rodrik is also a “many paths” kind of economist. He is a critic of the Washington Consensus for development. But he believes in development aid, and runs a program that fast tracks its graduates to the IMF and World Bank. Here’s a post by Rodrik on Easterly and vice versa. Is this an example of how very different ideological approaches can end up taking very similar intellectual paths?

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