Tell It To Al

 Halliburton Co., the comany that brought us the Dick Cheney and the Iraqi war, also brought us the BP oil spill.

Until now, this notorious conglomerate got little buzz for its involvment in BP’s ill-fated Macondo well in the deep waters of the Gulf of Mexico. 

But now investigators say Halliburton knew about flaws in the cement it was planning to pump into BP’s well, and pumped it anyway, maybe even without BP knowing about it.

Click here to read letter from the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.

Click here to see a slide presentation by Halliburton dated 11/18/2009 that suggests Haliburton knew about problems with standard cement slurry in deep water.

Click here to read more in the Wall Street Journal.

Walking past Rockefeller Center this week reminded me of the 1957 dystopian nightmare novel by Ayn Rand, Atlas Shrugged.

The book is one of the longest, most boring, and most poorly written tomes I’ve ever attempted to read.

Rand calls herself a philosopher. But it is easy to be a philosopher when all you do is set up straw-man arguments in a fictional world of your own creation.

Atlas Shrugged got terrible review when it first came out. But it has since evolved into a cult classic among free market capitalists for it’s exploration of “prime movers,” or leading innovators from industrialists to artists.

In Rand’s fictional story, society collapses as the government takes over free enterprise.

But why read the fictional horror in her book when you can read it for real almost every day in The Wall Street Journal.

Sub-par economic growth and continued high unemloyment is what policymakers, regulators and financial executives say we can expect.

RBC Capital Markets surveyed 172 of them at the two-day Buttonwood Gathering in New York this week. Some of the findings:

* 49% expect three to five years of sub-par growth (below 2% annually) in the U.S.

* 16% expect five to 10 years of such sub-par growth.

* 28% see a slow return 3% annual growth over the next two years.

* 61%  see the U.S. unemployment/underemployment rate easing to 12% to 15% from the current 17.1%.

“The financial and government leaders attending this year’s Buttonwood Gathering do not see either the best case of a return to robust growth or the worst case of a double-dip recession,” said Marc Harris, Co-Head of Global Research for RBC Capital Markets. “Instead, they see the economy continuing to trudge along.”

Slog, slog, slog.

Wouldn’t it be great if all credit cards charged no more than 10% interest?

That’s the goal of Metro IAF, a group of inter-faith organizations from the East Coast and Midwest. Check out www.10percentisenough.org.

Now you might argue that it is not the government’s place to tell private banks what they can charge on their credit cards. And I might agree with you. But is it the government’s place to bail out private banks when they fail?

When the banks were in trouble the people bailed them out. Now the people are in trouble and the banks want 30% to help them. Where is the love?

Throughout history, civilizations have had usury laws to prevent the rich from taking unfair advantage of the poor. The U.S. has virtually done away with them. I don’t know where fair interest rates stop and usury begins, but it seems to me that banks have been settling more on the usurious side of late.

A handful of ministers from Metro IAF told me that Citigroup CEO Vikram Pandit supported their efforts to establish a 10% cap on credit card rates.

 Click here to read what Pandit had to say about that.

BP’s CEO Bob Dudley wants to crank up the drilling rigs in the Gulf of Mexico now that the company’s notorious oil spill is a fading headline.

It’s not so much the drilling, but the spilling, that gets people mad. And Dudley says he wants to prove to the world that deep water drilling is safe now that his company has already proven it can be quite unsafe.

“We were certainly not perfect in our response, but we have tried to do the right thing,” he said. ”We are making significant changes to our organization as a result of the accident. … That is the standard by which we expect to be judged as we work to restore trust in BP.”

Click here to read more from the Associated Press. Are you ready to let BP back in the water?

Steven Rattner, a storied Wall Street money manager who served as President Obama’s former auto czar, is reportedly nearing a settlement with the Securities and Exchange Commission.

If the allegations against him are true, he not only paid an illegal kickback to bag $100 million investment from the New York State Common Retirement Fund, but he helped get a DVD distribution deal for one of the worst movies ever made, “Chooch” (see choochthemovie.com).

 Click here to read my column on Ratner, the “Chooch of the Week,” in The Sunday Wall Street Journal. And click here to read the SEC’s complaint.

Failure Friday didn’t disappoint this week as the Federal Deposit Insurance Corp. closed another seven banks in Florida, Georgia, Illinois, Kansas and Arizona.

That makes 139 bank failures so far this year.

One of them, Hillcrest Bank in Overland Park, Kan., wasn’t all that small - $1.6 billion in assets. Click here to read more from the Associated Press.

Failure Friday is getting to be a regular thing. That’s the day the FDIC likes to swoop in because it then has the weekend to put things in order. Last year, the FDIC shuttered 140 banks. It’ll likely surpass that total next Friday.

Sure is fun hearing the pundits all week, bantering about how the economy and the banking sector are in a slow but steady recovery, and then ending almost every week with yet another rash of bank closings.

All I can say is, TGIFF: Thank God It’s Failure Friday.

If you’ve ever tried calling your U.S. Senator’s office, chances are you got a polite brush off.

Josh Brodbeck, an organizational development and strategic planning consultant in Denver, was so frustrated by this experience, he began to think of ways he could get a senator’s attention.

Would life be any different, he wondered, if he were a federally registered lobbyist? From this question, the Senate Access Project was born.

Brodbeck cold called all 100 U.S. Senate offices as a citizen to ask for a meeting to discuss a health care bill. Then he registered as a lobbyist and cold called them all again abut the same bill.

Guess which tactic got more meetings? Josh the lobbyist by and a 4-to-one margin.

Click here to read my column on Brodbeck’s experiement. And click here to read Brodbeck’s study.

Bank of America is sure in a pinch. It’s bondholders want it to take back some shoddy mortgage loans. It’s borrowers want it to be more responsive to their loan modifications requests.

And now, in federal court in Denver, it’s being hit with a lawsuit from a guy named Keith Schwartz who owes $1.25 million on his home in Silverthorne, Colo. In state court, Schwartz won a preliminary injunction preventing Bank of America from foreclosing on him. But the case is pending.

He claims Bank of America doesn’t hold the note on his property and doesn’t have the right to foreclose on him. He also claims Bank of America won’t divulge the names of the investors who do have the right to foreclose, interfering with his ability to negotiate a loan modification.

And now, on top of all that, he’s accusing Bank of America of committing fraud in court. He says Bank of America used a “known robo-signer” in an affidavit filed in court. Bank of America denies the allegations.

Here’s my column on Schwartz vs. the Bank of America robo-signer:

Continue reading…

How’s the American Dream working out for you?

Some 48% of Americans say it’s not working out for them, and of those 56% say they fear it may never work out, according to a recent survey of 1,008 Americans by the polling firm StrategyOne, a Daniel J. Edelman company.

The good news is, of course, the other half.

Of those surveyed, 52% said they believe they are living the American Dream. Maybe they are not watching television shows and movies that constantly suggest everyone should be a millionaire.

Among people in households earning between $40,000 and $50,000, only 41% say they believe they are living the dream, the survey reported.

Here’s who says they’re not living the Amercan dream: 42% of college graduates and 29% of people in households earning $75,000 or more a year. Maybe they should wake up.

No matter how illusive the American Dream remains, 74% say they still believe America is a place where people can succeed. Of those earning less than $25,000 a year, 68% share this belief.

“Even though many consumers are worried about their own prospects for success, they have not shaken the belief that the American Dream remains a very strong possibility,” said Bradley Honan, senior vice president of StrategyOne. Click here to read more about the survey.