Skip to primary navigation Skip to main content

Wrestling over reform

   An update of the story that was on Page One of today's Buffalo News:
- Democrats willing to test GOP in Wall St. showdown - Jim Kuhnhenn/AP/Buffalo NewsDodd
   With a showdown vote looming, Democrats are resisting Republican appeals for a broad compromise on financial overhaul legislation and are eager to test whether GOP unity will crack in an anti-Wall Street political climate.
   The top negotiators on the
regulatory bill - Democratic Sen. Christopher Dodd [right] and Republican Sen. Richard Shelby - professed to be close to a deal during a joint appearance on NBC's "Meet the Press."
   But Shelby conceded that "inches sometimes are miles," and the two did not hold a negotiating session Sunday. Appearing Monday morning on a network news show, Shelby said, "I don't believe we'll have a deal today."

- Berating the Raters - Paul Krugman/The New York Times
   Let’s hear it for the Senate’s Permanent Subcommittee on Investigations. ... In the past few days scandalous Wall Street e-mail messages released by the subcommittee have made headlines.
   That’s the good news. The bad news is that most of the headlines were about the wrong e-mails. ... No, the e-mail messages you should be focusing on are the ones from employees at the credit rating agencies, which bestowed AAA ratings on hundreds of billions of dollars’ worth of dubious assets, nearly all of which have since turned out to be toxic waste. And no, that’s not hyperbole: of AAA-rated subprime-mortgage-backed securities issued in 2006, 93 percent — 93 percent! — have now been downgraded to junk status.
Senate Braces for Financial Showdown - Karl Hulse/The New York Times
- Deal Near on Derivatives  - The Wall Street Journal
   Among the considerations still in the balance: A big provision being sought by Warren Buffett in recent weeks. A key Senate committee had changed its proposed overhaul of derivatives regulation after lobbying by Mr. Buffett's Berkshire Hathaway Inc., potentially helping the famed investor avoid a financial hit, congressional aides say.
Financial reform's big unknowns - Robert J. Samuelson/The Washington Post
   Every financial reform, even if mostly successful, ultimately gives way to another because there are unintended consequences or unforeseen problems.
- The case for splitting up the nation's megabanks - Zephyr Teachout/The Big Money
  Typically, when confronted with the prospect of breaking up big banks, bankers and their apologists argue that socially useful economies of scale will be endangered. But it’s worth asking: What are the economies of scale that come along with a bank that has, say, $2.2 trillion dollars in assets? (That’s Bank of America.) Given that our six largest banks are now collectively worth more than 60 percent of the U.S. gross domestic product, it’s a burning question.

-- George Pyle/The Buffalo News

Please don't wreck the economy again

   All aboard for financial reform:

- Obama challenges Wall Street on reform - Los Angeles Times/Buffalo News
   Obama struck a conciliatory tone in a Manhattan speech given in the shadows of Wall Street, praising Obamawallstreet the importance of financial firms and free markets to the U.S. economy as he tried to close the sale on a nearly yearlong push for the most sweeping overhaul of financial rules since the 1930s.
   But even as Obama held out an olive branch, he insisted that tighter regulations were needed to rein in risky practices that led to the financial crisis and the recession.
[Video below]

- Credit raters abetted meltdown - AP/Buffalo News
   Credit rating agencies helped banks disguise the risks of investments they marketed before the financial crisis erupted, a Senate panel has concluded. [Live coverage of hearing Friday morning] 

   New York Sen. Charles E. Schumer is the focus of two big takeouts today:
- Friend to Wall Street, Schumer Is Suddenly Quiet - Carl Hulse/The New York Times
   Mr. Schumer acknowledges that his evolution on the issue has not been without some anguish as he navigates gingerly between the financial patrons he has mined for millions in campaign donations for himself and his party, and constituents who were hurt by the economic collapse.
- A Wall Street Ally Balances Loyalties - Devlin Barrett and Monica Langley/The Wall Street Journal
   Democratic Sen. Charles Schumer, one of Wall Street's closest friends in Congress, has a message for his longtime supporters who fear the financial-sector regulation bill: Get over it. It's going to pass

- Goldman’s rendezvous with reality - Robert Samuelson/Washington Post/Buffalo News
   Once upon a time, Wall Street’s leaders saw themselves as arbiters of capital, helping allocate society’s savings to productive uses. By contrast, Wall Street’s major firms now see themselves as captains of “the market,” navigating it — for themselves and sometimes their clients — for maximum gain. This is a distinction with a difference.

- Don’t Cry for Wall Street - Paul Krugman/New York Times
   [R]eform actually should hurt the bankers. A growing body of analysis suggests that an oversized financial industry is hurting the broader economy. Shrinking that oversized industry won’t make Wall Street happy, but what’s bad for Wall Street would be good for America.

- Wall Street's know-it-alls can't tell right from wrong - Steven Pearlstein/Washington Post
   Goldman Sachs is now relying on the character reference of a Wall Street sharpie who notoriously snookered investors into buying non-controlling shares of a private equity firm at the very moment when a credit-induced takeover bubble was about to burst.  

- Why Barack Obama wasn't that tough on Wall Street - John Dickerson/Slate 

   And, in the You Cannot Make This Stuff Up Department:
- SEC and Pornography: Workers Spent Hours on Porn Sites Instead of Stopping Fraud - Jonathan Karl/ABC News 

   This isn't it: 

-- George Pyle/The Buffalo News

Statler anninversary

Statler fence It was a year ago today when the company that operated the Statler Towers was forced into Chapter 11 bankruptcy.

U.S. Bankruptcy Court Judge Carl L. Bucki issued the order that day over the last-minute objections of developer Bashar Issa, the head of BSC Development Buffalo LLC, who submitted documents but did not appear in the courtroom.

The Statler case has gone through a series of twists and turns since then. The property was auctioned off last summer for $1.3 million, but the prospective buyers failed to close the deal. The tenant base dwindled, culminating in the shutdown of the property earlier this year. The first floor is now boarded up, with a fence ringing the Niagara Square landmark.

Lots of ideas have been aired for reviving the property -- Rocco Termini's "community in a building" concept being the latest -- but the Statler still lacks a purchaser to spearhead the effort.

The court-appointed trustee continues to hope a buyer can be found. In the meantime, another Statler-related auction is approaching, a May 1 sale of construction equipment and materials from Issa's time as owner.

-- Matt Glynn

In case you don't have enough to worry about...

   From this morning's Business Today:

- Power grid is inefficient, expensive and vulnerable - George Pyle/The Buffalo News
   If inventor Thomas A. Edison came back to life today, he might be amazed by such inventions as the cell phone and the Internet.
   "But," one of New York's premier experts on electric power noted Wednesday, "if Thomas Edison were to come back to Earth today, he not only could recognize the power grid, he probably could repair it."Smartgrid
   And that, said
Robert B. Catell, chairman of the New York Smart Grid Consortium, is the problem.
   A system so crucial to nearly every aspect of modern life has advanced very little in more than a century, when Edison was one of its creators and Western New York was the location of the first power grid, connecting the hydroelectric plant in
Niagara Falls with the street trolley system in Buffalo.
   What New York and the nation are now struggling with, Catell said, is a power delivery network that is expensive, inefficient, vulnerable to failure or sabotage and unable to bring the benefits of new sustainable and nonpolluting energy sources to the homes, businesses and public buildings that need them.
   The answer to that is the so-far theoretical idea of a smart grid — decentralized, computer-controlled, interactive, two-way system of power distribution that will take full advantage of clean power sources and information technology. It was the subject of discussion Wednesday as academics, engineers, power company executives and attorneys gathered for the latest seminar in the University at Buffalo-sponsored series called "The Business of Energy."

   More than one person to comment on this morning's story notes that this article fails to give proper cred to the other genius of electricity's early days, Nikola Tesla.

-- George Pyle/The Buffalo News 


High finance

    Fresh news from Wall Street:
- Obama slams Wall Street ways while asking support - AP/Buffalo News
   President Barack Obama rebuked Wall Street for risky practices Thursday even as he sought its Obamacooper leaders' help for "updated, commonsense" banking regulations to head off any new financial crisis.
   "Ultimately there is no dividing line between Main Street and Wall Street. We rise or we fall together as one nation. So I urge you to join me," Obama said in a high-stakes speech near the nation's financial hub.
 [Video] [Text]
- Live Blogging Obama’s Speech on Financial Regulation - Sewell Chan/The New York Times
- Post-Game Analysis: Why Obama’s Speech Counts - Damian Paletta/The Wall Street Journal 
- Obama urges CEOs to abandon 'furious effort' to block financial overhaul - The Washington Post
The Great American Bubble Machine - Rolling Stone
- The bond market will never be the same - Michael Lewis/Bloomberg
   If you happen to be sitting on the Goldman Sachs bond-trading floor, life must feel horribly unfair.
   You did nothing worse than live by the ethical assumptions of your market—any money-making event short of obviously illegal is admirable—and now your own grandfather thinks you’re some kind of monster. Your world feels upside down: What was right is now wrong; what was good is now bad; what once felt like winning now feels like losing

   From this morning's print Business Today section:
-  GM pays back loans from U.S., Canada - AP/Buffalo News
   General Motors Co. has repaid the $8.1 billion in loans it received from the U.S. and Canadian governments, a move its CEO says is a sign that the automaker is on the road to recovery.
   Chief Executive Officer Edward E. Whitacre Jr. announced the loan pay-backs Wednesday at the company’s Fairfax Assembly Plant in Kansas City, Kan., where he said GM is investing $257 million in that factory and the Detroit-Hamtramck plant, both of which will build the next generation of the midsize Chevrolet Malibu. ...
   the American auto industry lost more than 400,000 jobs in 2008, and analysts estimated that an additional 1 million would have been lost had GM and Chrysler liquidated. In the last nine months, the White House said the industry has added 45,000 jobs, the strongest employment growth in the industry in nearly a decade.
   “This turnaround wasn’t an accident of history,” White House economic adviser Lawrence H. Summers said in a blog posting.

- GM Still Owes Us - Jerry Flint/Forbes
   Far be it for me to rain on anyone's parade, but don't be fooled: General Motors has not paid its debt back to taxpayers.
- GM's Whitacre: U.S. may recoup all costs - The Detroit Free Press
   Aside from confirming that GM has paid off $5.8 billion in loans owed to the U.S. and Canadian governments five years before the government deadline, Whitacre boldly predicted the U.S. government would recoup its entire $50-billion-plus investment in the automaker and possibly even make money on it.
- And So It Begins: the GM IPO - Matthew DeBord /The Big Money
   General Motors’ CEO Ed Whitacre informed the public and media yesterday that GM will be paying back some of the many billions loaned to it by the United States and Canada. But more importantly, he went on the stump for a GM IPO, which could, and some say must, come before the November midterm elections.
- U.S.-made autos gain preference, poll shows - Alan Fram/AP/Buffalo News
Slightly more Americans now say the United States makes better-quality vehicles than Asia does, with 38 percent saying U. S. cars are best, and 33 percent naming autos made by Asian countries, according to an Associated Press-GfK poll.
   The survey suggests that those numbers are largely fueled by a plunge in Toyota’s reputation and an upsurge in Ford’s.

-- George Pyle/The Buffalo News  

How much money do you need?

   In Buffalo, we argue about whether the developers of Canal Side should be pushed to guarantee the project's future employees more than $10 an hour.
- Canal Side chief recoils at wage/job pact - Phil Fairbanks/The Buffalo News
   The fight over an agreement that could mandate wages, jobs and other benefits at Buffalo's Canal Side escalated Monday when developers suggested that part of the downtown site might not be developed if the Common Council insists on such a pact.
   Jordan A. Levy, chairman of
Erie Canal Harbor Development Corp., said his organization wants to work with the Council but will proceed with the Canal Side project with or without the 12 acres owned by the city. The land in question is beneath the Skyway around Marine Drive.

   In New York City, they note that the big investment firm that is accused of fraud just cleared what might be referred to as a bundle.
- Goldman earns $3.3B in 1Q as fraud case looms - AP/Buffalo News
Goldman Sachs said Tuesday its first-quarter earnings almost doubled to $3.3 billion as its trading  Goldmanbuilding business again surpassed the rest of the financial industry. A top lawyer for the bank, which is facing civil fraud charges, said Goldman would "never intentionally mislead anyone." ...
   The bank's earnings were overshadowed by the
Securities and Exchange Commission's civil fraud lawsuit filed Friday. The SEC alleges that Goldman Sachs and one of its vice presidents misled investors who bought complex financial products that were expected to fail.
- Schwab settles mortgage-backed securities suit - AP/Buffalo News
- Bank of New York Mellon 1Q profit jumps 74 percent - AP/Buffalo News
- Goldman executive in fraud case 'taking time off' - AP/Buffalo News
Terms, players in the Goldman Sachs fraud charges - AP/Buffalo News
A Difficult Path in Goldman Case - Binyamin Applebaum/The New York Times
   In accusing Goldman Sachs of defrauding investors, regulators are not only taking aim at a company with deep pockets and a will to fight — they are also pursuing an unusual claim that could be difficult to prove in court, legal experts said.
- When Wall Street Deals Resemble Casino Wagers - Andrew Ross Sorkin/The New York Times

   And, back in Buffalo, the Business Quote of the Day:
   “M&T is a pretty plain vanilla company. We make loans to consumers and businesses in our community, and that has served us well.”
    - Rene Jones, M&T Bank chief financial officer from:
- M&T Bank has a good first quarter - Jonathan D. Epstein/The Buffalo News

How Goldman Sachs makes its money, from The NewsHour [Feb. 10, 2010]:

-- George Pyle/The Buffalo News

M&T profits. Toyota fined. Leon tattooed.

   In Business Today:

- M&T Bank Corp. reports profits more than doubled - Jonathan D. Epstein/The Buffalo News
   M&T Bank Corp. said today that first-quarter profits more than doubled, driven by a higher profit margin following a pair of acquisitions in the Baltimore area and lower credit costs.
- Citigroup earns $4.4B in 1Q as trading rebounds - AP/Buffalo News
   Citigroup Inc. provided more evidence Monday that the nation's big banks may have turned a corner. The bank reported a surprise first-quarter profit as trading revenue offset losses from failed loans. 

- U.S. Gov't says Toyota accepted record $16.4M fine - Ken Thomas/AP/Buffalo NewsToyota
   Toyota Motor Corp. agreed Monday to pay a record $16.4 million fine for failing to properly notify U.S. authorities about a dangerous accelerator pedal defect, but denied allegations it broke the law.
   Transportation Secretary Ray LaHood, announcing the largest-ever penalty paid by an automaker to the U.S. government, said that "by failing to report known safety problems as it is required to do under the law, Toyota put consumers at risk."

- Tattooing gets beauty school’s imprimatur - Samantha Maziarz Christmann/The Buffalo News
   In the latest example of how tattoos have become more mainstream, Leon Studio One beauty school in Williamsville is adding tattoo classes to its successful hairdressing and aesthetics curriculum.
   “We look at it as part of the beauty business,” said owner Leon Tringali. “
The art of tattooing is thousands of years old. In the last 10 to 15 years, it has become like changing the color of your hair. People are now into adorning every part of their body.”
   The intensive one-month course has been submitted to the New York State
Department of Education and is waiting approval. Tringali hopes to have his first class of six students ready to go in roughly two months.
   And here is the new school song:  

-- George Pyle/The Buffalo News

Will it pay in Buffalo?

   In Sunday's Business Today:
   Can Buffalo afford to pay its workers enough that they can afford to live in Buffalo? Can we make ethanol pay? Is Buffalo a good place to ride out a recession?

Feasibility divides ‘living wage’ debate - George Pyle/The Buffalo News
   “It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should Adamsmith have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed, and lodged."
Adam Smith, [right] The Wealth of Nations, 1776
   Maybe it is fair that those who do the work of society can be expected to be paid enough that they can
enjoy its benefits. But is it always feasible?
   The father of modern economics, after all, had never been to Buffalo.
   People overseeing the development of
Canal Side — the $294 million project to turn the city’s forlorn waterfront into a retail and entertainment powerhouse — say that Buffalo cannot afford a rule that would require Bass Pro Shops and the other businesses that will locate there to pay their workers a “living wage,” well above the legal minimum wage and the going rate for such positions....
  But those
favoring such a requirement say Buffalo cannot afford much more in the way of development that does not pay at such a rate. And they argue that the higher wage, topping $10 an hour, is economically beneficial for the employers who would pay it and for the taxpayers of the larger community who are sinking so much into the project.
   Still hungry?
   UC Berkeley Labor Center, Living Wage Employer, Business for a Fair Minimum Wage, Employment Policies Institute and its study about the living wage experience in Santa Fe, N.M.

- A temperamental market - Matt Glynn/The Buffalo News
   In Buffalo, RiverWright LLC says it hasn't given up on ethanol, but it has put off those plans for now.
   In Orleans County, Western New York Energy LLC's ethanol plant is running strong and has built strong local connections.
   When it comes to making ethanol, the two ventures are on decidedly different paths.
- Ethanol industry is trying to regain clout - AP/Buffalo News

- Upstate fared better than U.S. overall - David Robinson/The Buffalo News
   ... That’s not to say that this recession hasn’t been plenty painful, with 15,600 jobs vanishing over the last two years, many of them in higher-paying manufacturing positions, especially in the battered auto industry. Countless more workers, happy to still have their jobs, have swallowed pay cuts, wage freezes and benefit reductions that have reduced their standard of living and squeezed their family budgets.
   But it could have been worse. Our 3.5 percent job loss from our prerecession peak is more than 40 percent smaller than the 6.1 percent drop nationally.
- The State of the Job Market, March 2010 - Gary Burtless/The Brookings Institution 
- Recession is ending? Some Americans don't buy it - Meghan Barr/AP/Buffalo News

-- George Pyle/The Buffalo News


Meanwhile, back at the recession ...

   In The Buffalo News Business Today:
- Regional jobless rate drops below 9 percent - David Robinson/The Buffalo News
   The unemployment rate in the Buffalo Niagara region dropped to 8.6 percent during March in a sign that the local job market is beginning to settle, the state Labor Department said Thursday.
   Leading the City & Region:
- VA hires 85 workers to speed vets’ claims - Lou Michel/The Buffalo News

- Obama signs $18 billion jobless benefits bill - AP/Buffalo News
   Just hours after Congress passed an $18 billion bill to restore unemployment benefits for the long-termDepression unemployed, President Barack Obama made it the law of the land.
- State's unemployment rate inches up - Chicago Sun-Times
- Initial jobless claims rise in Oregon - Bend Bulletin
- S.C. jobless rate slides for second month - The State
- Kentucky unemployment rate down slightly - Louisville Courier-Journal
- Ohio unemployment rises slightly - Canton Repository
- Unemployment rate still rising - Salt Lake Tribune
- State’s unemployment rate hits record in March - Las Vegas Sun
- R.I. jobless rate in first decline since ’06  - Providence Business News
Jobless rate falls, a first since ’07 - Boston Globe
- Georgia unemployment rate rises to a record 10.6 percent - Columbus Ledger-Enquirer 
- Foreclosure crisis won't ease until unemployment goes down, says UD prof - Dayton Daily News

Things are tough all over:

-- George Pyle/The Buffalo News   

Property changing hands. And not.

   In Buffalo, people are buying houses. One car dealer is buying the property of another. But, still, nobody wants the forlorn Statler Towers.
   From Business Today:

- Homebuyer tax credits boost pending sales - Jonathan D. Epstein/The Buffalo News
   The federal homebuyer tax credits are bringing buyers and sellers out in droves, as pending home sales in March rose 20 percent from a year ago, while new listings jumped 49 percent.
   The latest figures from the Buffalo Niagara Association of Realtors indicate that 975 homes were under a sales contract and awaiting closing in March, up from 815 a year ago.

- Tunmore's North Buffalo site to get Basil used-car facility - Matt Glynn/The Buffalo News Tunmore
   For decades, the Tunmore family has sold automobiles on Delaware Avenue in North Buffalo.
   That location is about to undergo a makeover. The Basil family of auto dealers, following a real estate deal, is preparing to open a used-car operation at the current home of Tunmore Auto Center and plans extensive renovations.

- Equipment auction for Statler set next month - Matt Glynn/The Buffalo News
   An auction of construction equipment and materials from the shuttered Statler Towers will occur next month, but the future of the property itself remains unclear.
   The auction will take place May 1 at
Cash Cunningham’s 1295 Main St. facility after U.S. Bankruptcy Judge Carl L. Bucki approved the request during a hearing Thursday.
- Disney goes to trial over safety of Tower of Terror - The Orlando Sentinel 

-- George Pyle/The Buffalo News

« Older Entries Newer Entries »