Somehow I always knew this headline was coming: Imprisoned former Qwest CEO Joe Nacchio sues his defense lawyers.
Click here to read details. The lawsuit complains Nacchio even had to pay for his lawyers’ underwear. Talk about taking it in the shorts.
Now I am trying hard not to picture Herbert Stern, the former federal judge who defended Nacchio, in his underwear.
Nacchio’s lawsuit says Stern and his law firm, Stern & Kilcullen LLC in Roseland, N.J., grossly overcharged him to the tune of $25 million.
“S&K was negligent and careless in handling the defense of the criminal action,” the complaint says. “Among other things, they were barred by the trial court from calling a critical expert witness by virtue of their blatant failure to comply with basic litigation procedures.”
I watched Nacchio’s trial and found myself rooting for him to win because the prosecution’s case against him was so thin. Many who read my previous columns about what a jerk Nacchio was at Qwest were surprised. But the criminal case against Nacchio was really lame.
The only thing, lamer, though, was the defense.
I was shocked to Nacchio put on on virtually no defense as his lawyers lost key motions.
Not surprised to see him complain about bad lawyering now. But one of my Facebook friends pointed out where Nacchio may be wrong to complain about having to pay for his lawyer’s underwear: “You always have to pay for briefs, no?”
Posted by Al Lewison March 23, 2011 Housing /
Meet Maria Echeverria, a Southern California grandmother, who used to own a mortgage company.
She is going to prison after pleading guilty to two counts of wire fraud.
The borrowers who took out these fraudulent loans are not.
The lenders – that encouraged high-volumes with loose lending standards – are not.
Echeverria made stated-income loans. During the boom, these were commonly called liar loans or cheater loans because borrowers could state any income they wanted and there was no verification. Mostly what underwriters looked at was credit scores.
The mortgage industry was corrupt from the very top of the banking system on down. But those at the top get to settle civil lawsuits without admitting nor denying guilt.
Granny, however, goes to jail. Click here to read my column.
Posted by Al Lewison March 22, 2011 Economy /
It’s one thing when card-carrying members of the the lunatic fringe predict the United States is headed for bankruptcy. It’s another when it comes from a member of the Federal Reserve Bank.
“If we continue down on the path on which the fiscal authorities put us, we will become insolvent,” Dallas Federal Reserve Bank President Richard Fisher said on Tuesday in a speech at the University of Frankfurt, Germany. “The question is when.”
Fisher, however, said he expects the U.S. to make the necessary cuts to its budget to avoid this fate.
“The short-term negotiations are very important,” he said. “I look at this as a tipping point.” Click here to read more from Reuters.
Meantime, he says the Fed has done enough to support the U.S. economy already: “The Fed has done enough, if not too much, and we should do no more.”
While Fisher thinks the economy is growing just fine, here’s another view: University of Maryland economist Peter Morici fears the worst. Click here to read his take.
Posted by Al Lewison March 21, 2011 Housing /
Home sales are down 9.6% in February – another reminder that the thing we keep calling the recovery does not include housing.
Foreclosures and short sales made up 40% of the market, according to the National Association of Realtors, and one-third of the deals were in cash. In short, were it not for a lot of bottom-feeding investors, home sales would really be up the creek. Click here to read more from the Associated Press.
Also, I particularly loved this quote from NAR’s economist, Lawrence Yun, on the Wall Street Journal’s website.
“We have an uneven, choppy recovery. … Hopefully it is a recovery that is taking place.”
A lot of us in the United States seem to hate collectivism, but no matter what happens to unions, we’re going to get collectivism anyway.
I’m talking about collective pain and shared sacrifice.
Let’s face it. States are going broke after the recession demolished property values and wiped out employment rolls.
The federal government, meantime, has been in a mad rush to take bad debts off the balance sheets of banks and corporations and put it on the balance sheets of the taxpayers. This has been in the name of saving the economy for all – and it seems to have worked, for now. But we the people … the great collective … get the debt.
Meantime, global markets remain imperiled by the uncertainty and volatility of world events, from the triple disasters in Japan to unrest in the Middle East, now escalating into bombing runs in Libya.
Click here to read my column in the Sunday Wall St. Journal.
Posted by Al Lewison March 18, 2011 Economy /
You can tell how desperate states are to do something – anything – to chip away at their budget crises when you read news like this:
Three states are talking about lowering their cigarette taxes in hopes of luring more smokers into their borders to buy more smokes, thereby raising cigarette tax revenue even though the rate is lower.
Did you follow that? It’s a sick version of the Laffer Curve – the Reagan Era idea that you can raise tax revenues by lowering tax rates. Click here to read more from The Associated Press.
Cigarettes offer the two sure things – death and taxes – in a handy little stick. Isn’t it great states want to sell more?
More smoking, more gambling, more revenue! Hooray.
But where there’s smoke there’s fire. No way will this ease their crises. Only another sign of their impending financial ruin.
Posted by Al Lewison March 17, 2011 Trends /
As we’ve just learned from Japan, nuclear power plants are perfectly safe until one day when they aren’t.
David Lochbaum, director of the Nuclear Safety Program at the Union of Concerned Scientists, put it this way in a press briefing today:
“Nuclear Regulatory Commission (NRC) has, with few exceptions, set the safety bar at the proper height, but has all too often
allowed unsafe reactors to limbo beneath that bar.”
Lochbaum’s is the author of a new report, The NRC and Power Plant Safety in 2010. Click here for links to the report. Lochbaum examined 14 “near-misses” at U.S. nuclear plants in 2010 and the NRC’s response. He found inadequate training, faulty maintenance, poor design, and failure to investigate problems.
The report was due out before Japan’s nuclear crisis, but now it’s suddenly interesting.