General News

Dow Jones reported today that John Malone, DirectTV's (NASDAQ: DTV) Chairman, said that it was not for sale.

Malone didn't comment about question of whether Verizon (NYSE: VZ) or AT&T (NYSE: T) were potential suitors, but he did say that the company was anxious to add a wireless component to their product line.

Unless you live under a rock or have not turned on the magic box in your living room for some time, then you have more than likely seen the new-advertising war that has been taking over the airways between wireless communication giants, AT&T (NYSE: T) and Verizon (NYSE: VZ).

Verizon fired the first shot across the bow with several ads stating the things that AT&T's flagship device, the Apple (NASDAQ: AAPL) iPhone, cannot do. The campaign has become known as the iDont commercials which were a promotion for the new Motorola (NYSE: MOT) Droid phone that is an exclusive to the Verizon network. The Droid is the latest on the list of wannabe iPhone killers.

The onslaught continued with the now well-known "there's a map or that" ads that pointed out the limited 3G coverage of the AT&T network, compared to the superior experience customer can receive through Verizon.

In a particularly witty attack, Verizon placed the iPhone on the famous "Island of Misfit Toys" from the beloved Rank and Bass Christmas movie "Rudolph the Red-Nosed Reindeer." The ad brilliantly points out that even thought the device is destined for greatness, it is crippled by the lacking coverage of AT&T.



This move led to a lawsuit filed by AT&T stating that the Verizon ads were "misleading." The temporary injunction that AT&T was seeking was denied by an Atlanta judge on Wednesday.

After running to the teacher like a tattle-tale, AT&T has now mustered up some courage as it called on Luke Wilson to spearhead a campaign of its own. Wilson points out some of the bright spots of the AT&T network, including having the fastest 3G network (where coverage applies), the ability to chat and surf the web, and the company's exclusive rights to Apple's iPhone.



After pointing out the high-water marks of AT&T, Wilson makes a comment about Verizon that has all the wit of a third-grader, in an attempt to insult Verizon.

In the end AT&T is doing what they should have done in the first place by fighting back; however the ads could most definitely use a little more thought behind them.

Some of the biggest shareholders of Goldman Sachs (NYSE: GS) have asked the firm, which is set to deliver $20 billion in bonuses, to pass more of the substantial profit along to investors, according to a report in the Wall Street Journal.

The investors feel that the firm, which received $10 billion in taxpayer dollars to help battle the financial crisis, should reward the shareholders after the company rebounded this year. The investors are not looking for a large cut, just something to help them reap the benefits of the recent profits of Goldman Sachs.

Shareholders have called for closer scrutiny of pay as regulators and politicians fear that banks are moving back to bonus plans that preceded the implosion of the large-cap banks such as Lehman Brothers.

After the government provided an influx of cash into banks such as Goldman Sachs, along with the Group of 20 nations, guidelines have been put in place to promote long-term performance rather than short-term prosperity for the banks.

Goldman Sachs has repaid the government handout, as it earned net income in excess of $3 billion, causing the push from investors for higher returns.

Some of the major Goldman Shareholders are concerned about the largely unnoticed change in the company's financial statements which impacted its total headcount by adding temporary employees and consultants. This is important because the company's staff is on pace to take in about $717,000 apiece in 2009.

The Wall Street Journal quoted Goldman spokesman Lucas van Praag when he stated that shareholders "have historically been more focused on the absolute return on equity and on book value per share growth" than per-share earnings.

Shares for Goldman are at $171.60 before the market opens today.

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The Federal Energy Regulatory Commission, or FERC, launched an investigation today of Natural Gas Pipeline Company of America LLC, Northern Natural Gas Co. and Great Lakes Gas Transmission L.P. to determine whether the companies are over-recovering costs, causing rates to be unjust and unreasonable. higher than what's allowed, the commission said.

“Protecting consumers against unjust and unreasonable rates is a fundamental responsibility of the Commission under the Natural Gas Act,” said FERC Chairman Jon Wellinghoff. “Launching these investigations is important to the Commission fulfilling that responsibility.”

The Northern Natural Gas system, which is made up of 15,141 miles of pipeline from Texas to the upper Midwest, is part of Berkshire Hathaway Inc.'s (NYSE: BRK-A) MidAmerican Energy Holdings Co. The Great Lakes system, which runs 2,100 miles in Minnesota, Wisconsin and Michigan, is an affiliate of TransCanada Corp (NYSE: TRP). Natural Gas Pipeline is a 9,700-mile system running from Texas and the U.S. Gulf of Mexico coast to Chicago, which Kinder Morgan Inc. (NYSE: KMP) operates.

Under FERC rules, any over-collection by pipelines isn't returned to companies that use them. The commission can take a variety of actions if a company is over-recovering, including resetting rates, a commission spokeswoman said.

The apparent over-collection is on what's known as the recourse rate, which is a basic rate established by regulators based on the cost of service.

Reasons of the investigations are as follows:

• Northern Natural Gas’ 15,141-mile system extends from the Permian Basin in Texas to the upper Midwest. Based on Northern’s 2008 reports, FERC staff calculated total adjusted 2008 revenue to be $726 million, which appears to yield an estimated earned return on equity of 24.36 percent, higher than that allowed by the Commission.
  
  
• Great Lakes’ 2,100-mile system transports natural gas through Minnesota, Wisconsin and Michigan. Based on Great Lakes’ 2008 reports, FERC staff calculated total adjusted 2008 revenue to be $290 million, which appears to yield an estimated earned return of 20.83 percent, higher than that allowed by the Commission.
  
  
• Natural Gas Pipeline’s 9,700-mile system consists primarily of two interconnected transmission pipelines, the Amarillo and Gulf Coast lines, which terminate in Chicago. From Natural’s 2008 reports, FERC staff calculated total adjusted 2008 revenue to be $656 million, which appears to yield an estimated earned return of 24.5 percent, higher than that allowed by the Commission.

A key House panel approved the Paul-Grayson Amendment by an overwhelming 43-26 Thursday afternoon, which will give watchdogs new authority to audit the Federal Reserve.

Here is a summary of the Paul-Grayson Amendment:

Dear Financial Services Committee Colleague:

It is encouraging to see the issue of Federal Reserve transparency receiving so much attention during this current markup. Today we plan to offer an amendment to the Financial Stability Improvement Act that expands on the many extant proposals to enhance Federal Reserve transparency. Our amendment is based on HR 1207, the Federal Reserve Transparency Act, which has broad bipartisan and grassroots support. The bill is cosponsored by 309 Members of Congress, including all Financial Services Committee Republicans and 13 Financial Services Committee Democrats.

The amendment removes restrictions on GAO audits of the Federal Reserve, as HR 1207 does, but makes a few changes to take into account some of the concerns that the Fed has made known in public testimony. Specifically, the Paul/Grayson amendment:

* Exempts unreleased transcripts and minutes from meetings of the Board and FOMC to address the Fed’s concerns that free and open debate in their meetings would be stifled.
* Sets a 180-day time lag for release of details of market actions the Fed has undertaken, to address the Fed’s concerns that Congress or GAO is second-guessing its actions.
* Removes boilerplate language that allowed GAO to make recommendations on monetary policy and adds a section stating that nothing in the amendment shall be construed as interference in or dictation of monetary policy to the Fed.

Unlike proposals that target the Fed’s 13(3) facilities, the Paul/Grayson amendment opens up the entire $2 trillion Federal Reserve balance sheet to a GAO audit. The Fed’s recent purchases of nearly $800 billion in mortgage-backed securities (MBS) have occurred under the MBS Purchase Program, authorized under section 14(b) of the Federal Reserve Act. This program, which is expected to reach a size of $1.25 trillion, would remain exempt from audit even if all the current 13(3) audit proposals were to go into effect. Targeting facilities that are in the process of being drawn down and that are authorized under a specific subsection of the Federal Reserve while allowing other facilities to spring up in their place is counterproductive to true transparency. All purchases and loans that appear on the balance sheet should be subject to audit, without loopholes for the Fed to evade scrutiny.

More importantly, the Paul/Grayson amendment does not create any additional burdens. Some competing proposals, while making a good effort at expanding the number of 13(3) facilities open to audit, take a step backwards by imposing new restrictions on GAO that are more burdensome than the restrictions currently written into law. We cannot accept these new restrictions. Unlike competing proposals, this amendment amends existing restrictions on GAO audit authority, a necessary precondition for a complete audit. Competing proposals leave these restrictions in place, and even add new ones.

We also reject the false dichotomy between transparency and independence. The Paul/Grayson amendment would achieve the necessary transparency of the trillions of dollars of Fed interventions while keeping Congress from directly intervening in the decision-making process. Independence should not be synonymous with secrecy. We urge our colleagues to support the Paul/Grayson amendment.

Sincerely,

Ron Paul, Member of Congress
Alan Grayson, Member of Congress

Dr. Ron Paul is a Republican member of Congress from Texas.