Archive for April 20th, 2010
AG:Accounts a national crisis
(CNS): Full update – The auditor general has warned of “tremendous consequences” if the dire situation regarding government’s accounts is not addressed immediately. Describing the situation as a national crisis, Dan Duguay said that some two years since his first review of the state of public financial accounting little has changed, despite government spending more then $1million on an accounting task force to try to get the accounts up to date. Some organisations have made no improvement at all, even falling further behind. Others, he says, have made minor progress. But while a number of government entities have caught up with their financial statements, few have filed an annual report.
Concerning Abacus: Tails you lose, heads I win
The news broke last Friday that Goldman Sachs, the banking giant whose CEO recently declared that his company was about doing God’s work, had been the subject of fraud charges filed earlier in the day by the Securities and Exchange Commission.
The charges allege that Goldman Sachs made material misstatements and omissions in connection with a synthetic collateral debt obligation “CDO” Goldman Sachs structured and marketed to investors in 2007.
The name of the particular CDO is ABACUS 2007- AC1. It is alleged that the marketing materials failed to disclose that a large hedge fund (Paulson & Co Inc), with economic interests directly adverse to investors in the ABACUS 2007-AC1, played a significant role in the portfolio selection process. Incidentally, John Paulson, the CEO of the hedge fund, is celebrated for having personally earned $2.0 billion in 2008 and $2.3 billion in 2009.
To put it bluntly, the investors, as is generally the case in the casino game that is held up as high finance, were being played for stiffs. The greed game they had willingly decided to play goes simply like this: “tails you lose, heads I win”.
What, you might ask, does this have to do with us ordinary mortals in the Cayman Islands?
The Transaction Overview of the Offering Document (page 20) provides an explanation. ABACUS 2007-AC1 is incorporated with limited liability in the Cayman Islands. The Class D Notes are governed and construed in accordance with the Laws of the Cayman Islands.
Such a vehicle would have delivered less than $25,000.00 to the public revenues of the Cayman Islands. The SEC allegations suggest that investors were relieved of over $1.0 billion and that the Paulson hedge fund’s opposite CDS positions yielded a profit of approximately $1.0 billion. (Thereis a 99% chance that the Paulson positions were similarly facilitated by entities incorporated with limited liability in the Cayman Islands, Exempted Companies.)
A gamed transaction in excess of the $2.0 billion and the house (that’s us the offshore facilitator) is happy to put its reputation on the line for less than $50,000.00!
Are we really so naïve to continue to believe that $25,000.00 is adequate compensation to the public purse for the provision of an enabling environment, wherein so called reputable institutions can arrange for investors to be gamed for billions?
Are we truly satisfied that the reputational damage that is wrought on this little island by the globalrevelations of our involvement in such despicable acts by greedy self- interested financiers is worth the transient material illusion of development that it has brought us over the last two decades?
We continue to hear the self-interested captains of the financial industry and their choir boys and girls warn us that the industry is contributing to the local economy at an absolute optimal level. They continue to chide the public sector for its profligate ways and suggest that the real fix to our current financial and economic woes is to be found in finding ways for the immediate curbing of public sector expenditure.
Maybe rather than reducing the public service we the ordinary folks should be clamouring for the hiring of a few more good people who really understand what goes on the name of high finance and have them deal with the white collar scoundrels as they should really be dealt with.
Female road victim critical
(CNS): Police have confirmed that a female visitor to the island is currently in hospital in critical condition with life threatening injuries as a result of an accident on the West Bay Road yesterday evening (Monday 19 April.) Police said that just after 7:00 in the evening the woman, who was a pedestrian, was hit by two cars as she tried to cross the road by the Strand Shopping Centre. The victim has reportedly received multiple injuries and is currently being treated in the Critical Care Unit at the George Town Hospital.
Cops make drug & gun bust
CNS): Police have six people in police custody following a major operation in the eastern districts of Grand Cayman today (20 April). Five Caymanian men and one Jamaican man are currently being held at the George Town Police Station in connection with a drug and gun bust. A police spokesperson said a substantial quantity of ganja, along with cocaine, hash oil and three firearms were recovered when the men were intercepted, having apparently abandoned their boat, which sank as they tried to make a landing on the local shoreline.
One firearm was taken from one of the males on arrest and two others recovered together with ammunition after an air and sea search, which located the boat and the residue of its illicit cargo.
Police said this was a substantial seizure of firearms and drugs which would have found its way into the criminal networks of the Island. CNS understands the operation took place in the Bodden Town area.
Women to blame for earthquakes, says Iran cleric
(The Guardian): A senior Iranian cleric says women who wear revealing clothing and behave promiscuously are to blame for earthquakes. Iran is one of the world’s most earthquake-prone countries, and the cleric’s unusual explanation for why the earth shakes follows a prediction by the president, Mahmoud Ahmadinejad, that a quake is certain to hit Tehran and that many of its 12 million inhabitants should relocate. "Many women who do not dress modestly … lead young men astray, corrupt their chastity and spread adultery in society, which increases earthquakes," Hojatoleslam Kazem Sedighi was quoted as saying by Iranian media.
Debate on Internet’s limits grows in Indonesia
(New York Times): Displeased that a statue of a 10-year-old Barack Obama was installed in a park here, Indonesians took their protest not to this capital’s most famous traffic circle but to Facebook. More than 56,000 online protesters later, city officials gave in to arguments that the park should be reserved to honor an Indonesian. This example of high-tech grass-roots organizing was the direct result of the explosion of social networking in Indonesia. But the boom is prompting a fierce debate over the limits of free expression in a newly democratic Indonesia, with the government trying to regulate content on the Internet and a recently emboldened news media pushing back.
Hospital makes urgent appeal for blood
(CNS): The Cayman Islands Hospital in George Town is calling on donors of O negative, O positive and A positive blood to donate blood today- Tuesday 20 April. The hospital has an urgent need for these blood types and any people who can give are asked to contact the HSA as soon as possible. A health official explained that incidents resulting in hospitalization within the past 24-hours have drained the supplies of blood leaving the hospital in urgent need. Individuals who are willing and able to donate should contact blood the Blood Donor Services Department at 244-2674 or 244-2677.
Weatherman predicts cloud heading to Canada
(BBC): A change in wind direction by the weekend could help blow Iceland’s volcanic ash cloud away from Europe, a BBC meteorologist says. However, the change could see the cloud move to affect Canadian airspace instead. North-westerly winds over the Atlantic have blown ash from the erupting volcano over the UK and Europe this week. But Matt Taylor warned ash blown away from Europe could cause problems for Canada instead.
"Weather conditions should be more favourable by the end of the week," Matt Taylor said. "The wind should change to the opposite direction: it could start to disperse some of the stuff that has been blown over from Iceland."
Cline says EIA will be made public
(CNS): Although the government and the proposed cruise port developer have only just signed the MOU, the environmental impact assessment has already begun, and once it is complete government will release its findings, MLA Cline Glidden says. While there is wide political support for a development of cruise berthing facilities there are still a number of people who have concerns about the impact the project will have on Cayman’s marine environment, Seven Mile Beach and the islands’ capital, George Town. The EIA must now be completed before the MOU 90-day period elapses, which, according to government and the developer, will mitigate any negative impacts caused by the project.
Still no conservation law as minister signs pledge
(CNS): Although Minister for the Environment Mark Scotland signed the Chamber’s Environmental Pledge to commemorate Earth Day, there is still no sign of the National Conservation bill. Since coming to office the minster has said he will address the outstanding law. However, CNS understand that despite being in consultation throughout most of the last administration, Scotland has again circulated the bill in order to make changes. While the environmental pledge is a Chamber of Commerce initiative intended to encourage the commercial and public community to better sustain resources and protect the environment, the conservation bill is the only thing that can legally protect the environment.