Randomly Noted

The Federal Reserve has a committee studying how to improve communications with the public. But change was not in evidence in the latest statement issued today following the rate-setting meeting of the central bank.

In a bid to be more open with investors and the general public, the Fed should adopt a less stilted post-meeting announcement of its rate decision. Sure, each word the Fed utters must be carefully chosen because each word will be subject to over-the-top analysis by market types and analysts. But still, the Fed should indicate it doesn’t live in a cave.

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One of the most interesting aspects of the 26-page annual missive penned by Berkshire Hathaway Inc. Chairman Warren Buffett was the reproduction of a 1939 letter from his grandfather and the mathematical trajectory one can trace from a homespun lesson on savings to Berkshire’s ability to massively benefit from the recent financial crisis.

In that 1939 letter from Ernest Buffett to one of his sons and the son’s wife, Ernest described the $1000 cash reserve he had built for them. “I hope it never happens to you, but the chances are that some day you will need money, and need it badly, and with this thought in view, I started a fund …” Ernest wrote. Without liquidity, he said, one might have to “sacrifice some of their holdings” when cash was immediately needed.

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This may be a case of  over-the-top tea-leaf reading.

So, by definition, it will be convoluted. But here goes. My interpretation of some comments made today byFederal Reserve Vice Chair Janet L. Yellen indicates the central bank will feel no rush to remove the famous “extended period” language from its post-meeting statements.

The reason for that, essentially, is that Yellen thinks the Fed’s conditionality around that phrase has been sufficient to allow market participants to change their views about when the central bank may finally come off its long-standing emergency easy policy, which features zero short-term interest rates. Said another way, the phrase “extended period” is flexible.

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Score one for the California Public Employees’ Retirement System. The country’s largest public pension fund won in its scrimmage with Apple Inc. about how Apple directors get to stay on board.

Apple shareholders voting at the company’s annual meeting today backed a CalPERS-offered proposal that asks the board of directors to jump on the majority voting bandwagon.

“An election where you can be voted in without a majority is unworthy of a great company like Apple,” said Anne Simpson, CalPERS’ senior portfolio manager who heads its corporate governance program, in a press release. “We strongly urge Apple to make the change that its owners are requesting.”

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Disappointment is the word recently used by a commissioner of the Securities and Exchange Commission about the percentage of corporate directors at big U.S. public companies who are women.

The figure cited by SEC Commissioner Elisse B. Walter in a Feb. 10 speech was 15.7%. That’s the percentage of board seats held by women at Fortune 500 companies, according to the 2010 Catalyst Census.

Here is the fuller quote from Walter, who fills one of the Democratic seats of the five-person commission:

“I think it’s fair to say that there are significant challenges for those who want to see true gender diversity in corporate governance,” Walter said in the text of a speech to the DirectWomen Board Institute. “While I will not offer up a personal analysis as to why women are underrepresented on corporate boards – I’ll leave that to the experts – I can tell you that my initial reaction to the statistics is disappointment.”

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To those fretting about the very real budget problems of U.S. cities and states, their difficulty in fulfilling  financial promises they made and the implications of all that for the market in tax-free bonds, here’s a number that might offer a measure of reassurance. 72. Or, if you like, 77.

These numbers represent the percentages, respectively, of the number of polled New Yorkers who support the tough budget proposal of the state’s new Democratic governor, Andrew Cuomo, and the percentage who have a favorable view of him. (The source is the Siena Research Institute.)

That’s New York, the fabled liberal state. Across the river in New Jersey, the controversial Republican governor, Chris Christie, is lighting into government worker benefit and retirement plans that threaten the state’s fiscal future.

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Some good quotes from Robert Khuzami, head of the Securities and Exchange Commission’s enforcement division, as he laid out how people associated with an “expert networking” or “matchmaking” firm allegedly shared inside information about some of the big companies that employed them with hedge fund employees.

Said Khuzami in a statement issued today: “Today we pull back the curtain and reveal that the only matching that was going on here was to match theft with greed.”

And lest anyone not understand what’s allegedly involved, Khuzami employed analogy to good use. He said: “These trusted employees chose to steal information that belonged not to them, but to the company and its shareholders. They lined their pockets with tens of thousands of dollars by trafficking in that stolen information in a manner that is not unlike an employee who drives to the loading dock late at night and fills the trunk of his car with valuable office equipment and sells it to his neighbor.”

The U.S.’s largest public pension funds reports further progress in its useful quest to get more publicly traded companies to adopt majority voting for directors.

Simply put, majority voting requires a director in an uncontested election to receive more “for” votes from shareholders than “withhold” votes to continue to serve on the board of directors.

The 58 companies targeted in March 2010 by The California Public Employees’ Retirement System (CalPERS) were holding onto the plurality system. Under that system, a single “for” vote could re-elect a director.

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There are facts. There is political reality. As those two clash, it won’t come out well for the Securities and Exchange Commission.

The SEC’s chairman, Mary L. Schapiro, marshalled facts in a speech today, hitting hard that the watchdog agency needs more money to modernize to fulfill its role, especially in light of the additional responsibilities handed the SEC by the Dodd-Frank Act.

The reality is the SEC had better review all its operations, set its priorities and stop some things so it can do others well. The top priorities should be enforcement and watching ever-more-sophisticated stock market patterns.  Other functions, such as investor education, will have to fall by the wayside.

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The incongruity wasn’t lost on the Federal Reserve chairman or the crowd.

“But before asking the last question, a couple of very important matters to take care of,” intoned the moderator at Fed Chairman Ben Bernanke’s rare press conference today in Washington at the National Press Club. “Want to remind our members and guests of future speakers. Harry Shearer, the comedian and humorist, a voice of ‘The Simpsons,’ will discuss media myths on March 14.

“And we might even try to get him to do a few voices for us,” the moderator added, according to a transcript.

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