Mr. Paul Equale

GLG News^SM Analyses by Paul Equale(?)

What Goes Around, Comes Around....Eventually

January 15, 2009

Analysis of:Citigroup Ready to Shrink Itself by a Third | online.wsj.com

The history of of the banking cycle is rife with examples of boom and bust, just like the business cycle.  The regulatory approach of the federal government is a key aspect of that cycle.  How did the optimism of the late 1990's turn so quickly to our current situation.  A look at a previous period in our nation's history can help to illuminate some of today's issues.

Bush to WTO: Drop Dead

April 9, 2007

Analysis of:U.S. still in the wrong with Web gambling ban, WTO says | www.iht.com

The internet gambling ban which was attached to last year's port security bill is an example of the power of the fundamentalist, anti-gambling, pro-morality Republican constituency in the waning days of the Bush Era.  Led by (then) Senate Majority Leader Bill Frist (R-TN) in an effort to polish his conservative credentials when he was seriously considering a bid for the Republican presidential nod, the effort to ban internet gambling was successful. No Republican running for president can afford to offend this powerful minority of galvanized activists.  Coupled with the prosecutorial power of the Justice Department, the ban has sent shivers up the spine of the e-commerce community.

The WTO opinion, which will likely be appealed by the US Trade Representative, will carry the same weight as other international sanctions do with the Bushies....zilch, zero, nada. It does, however, give some political ammunition to those who are advocating a repeal of the ban.

Beazer Homes: A Canary in the Coal Mine?

April 9, 2007

Analysis of:Feds Probe Beazer Homes | www.msnbc.msn.com

By criminalizing the building/lending practices of Beazer, the US Attorney is creating a roadmap for prosecutions in other parts of the country where a combination of poor state regulatory oversight coupled with tenuous federal jurisdiction have contributed to the still emerging mortgage crisis. 

These companies have a higher headline risk, now that foreclosures are starting to accelerate.  The Charlotte Observer broke the story on March 18, and HUD said that they had no knowledge of improper practices by Beazer.  By March 25th, the IRS, US Attorney, FBI, and HUD Inspector General were engaged in a proctoscopic examination of the company, which will likely end in serious fines and prison time for some Beazer execs. 

Enterprizing news outlets around the country will be influenced to pursue similar stories, and local prosecutors, as well as other US Attorney's will see the political opportunity that a successful prosecution will provide.  No one should forget that Rudy Giuliani got his start on the public stage as a relentless US Attorney for the Southern District of New York, walking an earlier generation of Wall Street perps through the streets of Manhattan for the benefit of the cameras.