| NYT: US eyes reining in ‘too big to fail’ firms

NYT:-U.S.-eyes-reining-in-‘too-big-to-fail’-firms WASHINGTON - Congress and the Obama administration are about to take up one of the most fundamental issues stemming from the near collapse of the financial system last year — how to deal with institutions that are so big that the government has no choice but to rescue them when they get in trouble.

A senior administration official said on Sunday that after extensive consultations with Treasury Department officials, Representative Barney Frank, the chairman of the House Financial Services Committee, would introduce legislation as early as this week. The measure would make it easier for the government to seize control of troubled financial institutions, throw out management, wipe out the shareholders and change the terms of existing loans held by the institution.

The official said the Treasury secretary, Timothy F. Geithner, was planning to endorse the changes in testimony before the House Financial Services Committee on Thursday.

The White House plan as outlined so far would already make it much more costly to be a large financial company whose failure would put the financial system and the economy at risk. It would force such institutions to hold more money in reserve and make it harder for them to borrow too heavily against their assets.

Setting up the equivalent of living wills for corporations, that plan would require that they come up with their own procedure to be disentangled in the event of a crisis, a plan that administration officials say ought to be made public in advance.

“These changes will impose market discipline on the largest and most interconnected companies,” said Michael S. Barr, assistant Treasury secretary for financial institutions. One of the biggest changes the plan would make, he said, is that instead of being controlled by creditors, the process is controlled by the government.

Some regulators and economists in recent weeks have suggested that the administration’s plan does not go far enough. They say that the government should consider breaking up the biggest banks and investment firms long before they fail, or at least impose strict limits on their trading activities — steps that the administration continues to reject.

Anger over bailouts
Mr. Frank, Democrat of Massachusetts, said his committee would now take up more aggressive legislation on the topic, even as lawmakers and regulators continue working on other problems highlighted by the financial crisis, including overseeing executive pay, protecting consumers and regulating the trading of derivatives.

Illustrative of the mood of fear and anger over the huge taxpayer bailouts was Mr. Frank’s recent observation that critics of the administration’s health care proposal had misdirected their concerns — Congress would not be adopting death panels for infirm people but for troubled companies.

The administration and its Congressional allies are trying, in essence, to graft the process used to resolve the troubles of smaller commercial banks onto both large banking conglomerates and nonbanking financial institutions whose troubles could threaten to undermine the markets.

That resolution process gives the government far more sweeping authority over the institution and imposes major burdens on lenders to the companies that they would not ordinarily face when companies go into bankruptcy instead of facing a takeover by the government.

Deep-seated voter anger over the bailouts of companies like the American International Group, Citigroup and Bank of America has fed the fears of lawmakers that any other changes in the regulatory system must include the imposition of more onerous conditions on those financial institutions whose troubles could pose problems for the markets.

Some economists believe the mammoth size of some institutions is a threat to the financial system at large. Because these companies know the government could not allow them to fail, the argument goes, they are more inclined to take big risks.

Also, under the current regulatory structure, the government has limited power to step in quickly to resolve problems at nonbank financial institutions that operate like the failed investment banks Lehman Brothers and Bear Stearns, and like the giant insurer A.I.G.

As Wall Street has returned to business as usual, industry power has become even more concentrated among relatively few firms, thus intensifying the debate over how to minimize the risks to the system.

Some experts, including Mervyn King, governor of the Bank of England, and Paul A. Volcker, the former chairman of the Federal Reserve, have proposed drastic steps to force the nation’s largest financial institutions to shed their riskier affiliates.

In a speech last week, Mr. King said policy makers should consider breaking up the largest banks and, in effect, restore the Depression-era barriers between investment and commercial banks.

“There are those who claim that such proposals are impractical. It is hard to see why,” Mr. King said. “What does seem impractical, however, are the current arrangements. Anyone who proposed giving government guarantees to retail depositors and other creditors, and then suggested that such funding could be used to finance highly risky and speculative activities, would be thought rather unworldly. But that is where we now are.”

The prevailing view in Washington, however, is more restrained. Daniel K. Tarullo, an appointee of President Obama’s, last week dismissed the idea of breaking up big banks as “more a provocative idea than a proposal.”

At a meeting Friday at the Federal Reserve Bank of Boston, the Federal Reserve chairman, Ben S. Bernanke, said in response to a question by a former Bank of England deputy governor that he would prefer “a more subtle approach without losing the economic benefit of multifunction, international firms.”

Republican and Democratic lawmakers generally agree that the “too big to fail” policy of taxpayer bailouts for the giants of finance needs to be curtailed. But the fine print — how to reduce the policy and moral hazards it has encouraged — has provoked fears on Wall Street.

Even before Mr. Frank unveils his latest proposals, industry executives and lawyers say its approach could make it unnecessarily more expensive for them to do business during less turbulent times.

“Of course you want to set up a system where an institution dreads the day it happens because management gets whacked, shareholders get whacked and the board gets whacked,” said Edward L. Yingling, president of the American Bankers Association. “But you don’t want to create a system that raises great uncertainty and changes what institutions, risk management executives and lawyers are used to.”

T. Timothy Ryan, the president of the Securities Industry and Financial Markets Association, said the market crisis exposed that “there was a failure in the statutory framework for the resolution of large, interconnected firms and everyone knows that.” But he added that many institutions on Wall Street were concerned that the administration’s plan would remove many of the bankruptcy protections given to lenders of large institutions.

This article, U.S. Considers Reining In ‘Too Big to Fail’ Institutions, originally appeared in The New York Times.

- | NYT: US eyes reining in ‘too big to fail’ firms |

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| BNY Mellon posts 3Q loss on hefty charge

BNY-Mellon-posts-3Q-loss-on-hefty-charge NEW YORK -Bank of New York Mellon Corp. said Tuesday that it took a hefty charge during the third quarter to restructure its investment portfolio, resulting in a loss of almost $2.5 billion for the period.
The New York-based trust bank said by selling and writing down the value of its most risky securities during the quarter, it has significantly reduced the risk of future losses in the portfolio.
Its shares rose 87 cents, or 3.2 percent, to $28.10 in premarket trading.
Because BNY Mellon is not a traditional retail bank, it has little direct exposure to risky consumer loans and mortgages that have plagued traditional banks over the last several quarters. But like other financial firms, BNY Mellon has taken hits on its investments in securities backed by residential mortgages and other real estate-related loans as the value of those assets have withered since the housing bubble burst.
BNY Mellon said it has sold $3.6 billion of the riskiest assets in its investment portfolio, and restructured an additional $8.5 billion of securities. The efforts resulted in a charge of about $3 billion, or $2.54 per share, the bank said.
Excluding the losses on its investment portfolio, total revenue declined 14 percent from the prior-year quarter to $3.33 billion as fee revenue fell. However, fee revenue has improved over the past three quarters as market conditions stabilize. Total fee revenue was $2.62 billion, down 15 percent from $3.09 billion a year earlier, but up 4 percent from the second quarter.
BNY Mellon primarily provides asset and wealth management services for institutional, corporate and high-net-worth individuals so the bulk of its revenue comes from fees related to those services.
Part of the fees BNY Mellon collects are based on the performance of the assets it manages for clients. So as the broader financial market improved, with the Standard & Poors 500 index rising 15 percent during the quarter, BNY Mellons results improved.
Revenue from foreign exchange and other trading activities fell 36 percent year-over-year to $246 million, but was up slightly from the prior quarter.
Total assets under management amounted to $966 billion at quarter end, down 9 percent from the third quarter of 2008 and up 4 percent from the second quarter.
For the period ended Sept. 30, the bank reported a net loss applicable to common shareholders of $2.46 billion, or $2.05 a share. A year ago, the bank reported earnings of $303 million, or 26 cents per share.
On an adjusted basis, excluding the restructuring and other one-time charges, the bank said it earned 54 cents per share. Analysts, who typically exclude unusual items from their estimates, were expecting a profit of 48 cents per share, according to a poll by Thomson Reuters. - | BNY Mellon posts 3Q loss on hefty charge |

| New study: What really happens when you die?

New-study:-What-really-happens-when-you-die? People often talk about seeing their lives flash before their eyes, but a select few — some of those who have been resuscitated after nearly dying — have reported on the experience of death, or at least coming very close to it. It’s a rarer phenomenon, and one that has captured the interest of scientists who are trying to answer the question of just what constitutes death, and when death actually occurs. A new international study is endeavoring to apply hard science to one of life’s biggest mysteries — its end.

“When you think about it, most people out there think of death as a moment; you’re either dead or you’re not,” Dr. Sam Parnia of Weill Cornell Medical Center told Meredith Vieira live on TODAY Monday. “But what we’ve found is there is no moment of death; it begins when your heart stops, and it goes on for a period of time.”

Parnia is the author of the book “What Happens When We Die” and the driving force behind the AWARE study, which tries to add some medical weight to stories of people who say they were conscious as doctors tried to restart their bodies after death. By learning from people who have been brought back from the dead, doctors might actually learn how to better save lives, he believes.

Looking from above
“At least 10 to 20 percent of people who have been brought back to life will tell us they had consciousness present, and a proportion of them will tell us they were able to see doctors and nurses working on them as if they’re looking from above,” Parnia told Vieira. “When people have died, their brain goes into a flatline state, so consciousness shouldn’t be present. But it could also be that did something amazing to get blood into their brains.”

Science has traditionally said that when a person has no pulse, they are gone from the land of the living. But what’s trickier for researchers is figuring out what is going on with the brain after the heart stops and cells start dying off.

Dr. Parnia and his associates are looking into the tales of “out-of-body experiences” to gain new insight into the inner workings of the brain when a person is at death’s door. Currently, no one knows for sure whether OBEs are real or if they are just a trick of the mind to ward off the painful process of the body shutting down.

The researchers are tackling the question on two fronts — one scientific, and one that employs an elevated parlor trick. Demonstrating the first, Dr. Parnia showed Vieira a brain oxygen meter, which doctors at hospitals participating in the study hook up to cardiac-arrest patients to determine how much oxygen still flows through the bloodstream at the time of death.

The second test might be even more intriguing to doctors and laymen alike. A small picture shelf is installed above patients’ beds in cardiac ICU units that are part of the study. The shelf can’t be seen from floor level — one would have to be “floating” to catch a glimpse of the photo. Doctors are trying to see if any patient brought back to life through resuscitation — and who say they wafted above their corporeal self — will recall seeing the photo in their intermittent state.

One man’s story
The researchers are thus trying to put some objectivity into what has long been a subject more commonly discussed by philosophers and theologians. But to be sure, the subject of people being brought back to life, and what they experienced before they were, has a grip on the public’s imagination.

One of the more famous cases is that of Baptist minister Don Piper, who appeared to have met his unfortunate demise more than 20 years ago when a 16-wheeler smashed into his Ford Escort head-on while crossing a bridge in Texas. Amazingly, Piper is still around to recount the accident to NBC in a taped segment that ran on TODAY.

“I was killed instantly,” the very-much-alive Piper says. “I was immediately struck, crushed by the roof of the car collapsing, steering wheel impaling me on the chest and the dashboard collapsing on both of my legs.”

Paramedics could find no sign of life at all in Piper, and placed a tarp over him while waiting for the medical examiner to arrive. A fellow priest prayed over him, but as he was singing “What a Friend We Have in Jesus,” Piper began singing along — an hour and a half after he was assumed dead.

Where did Piper go? To hear him tell it, he died and went to heaven. Piper wrote a best-selling book, “90 Minutes in Heaven,” in which he details being at the Pearly Gates, seeing other believers, hearing songs never heard on earth and thinking only good thoughts. He has now established a ministry based around his death experience.

New branch of science?
For his part, Parnia is fascinated by such stories, but not for their entertainment value. He believes the current study examining these accounts may actually help doctors be more successful in bringing more people back to life after death.

“ will allow us to discover the nature of the human mind and consciousness — it might open a new branch of science,” Parnia explained to Vieira. “We’ll know better methods of resuscitating cardiac patients.

“With ever-improving discoveries, we will be able to bring even more people back to life from clinical death,” Parnia continued. “It is paramount for physicians to be able to provide a scientific understanding of what happens to the brain and body and, more importantly, the human mind and consciousness, during death.”

Some 25 hospitals in the U.S. and Europe are participating in the AWARE study. But don’t expect results overnight: Parnia predicts a report on the study’s findings won’t be available for at least three years.

For more information about this topic, visit these sites:

MindBodySymposium.comNour FoundationHorizon Research Foundation

- | New study: What really happens when you die? |

| ‘Best Dressed’ man helps homeless

‘Best-Dressed’-man-helps-homeless MIAMI - The three homeless men stand before well-groomed Frank Kelly, Americas Best Dressed Real Man of 2007, according to Esquire Magazine. Hes there to help them get work.

Dont just tell me your strengths. Tell me a situation where you were able to implement that strength, Kelly tells them.

Two months later, each has a job.

The group is part of Project Vacant Streets, Kellys initiative to get the homeless back on their feet one job at a time. Each participant undergoes a series of transformations — emotional, professional and physical. The idea is that in less than a month, they gain the confidence to land a job through the skills learned. Kelly says he has helped nine people find jobs in the nearly two years since he started.

Kelly, a 32-year-old product director at Johnson & Johnson, describes the programs candidates as everyday Americans. He said most are not mentally ill or drug addicts, they have just suffered from chronic homelessness.

They have an incredibly difficult time getting back into the work force, Kelly said.

Kelly was born in Nicaragua, and his family moved to the Miami area when he was 2. His grandmother spent her life volunteering with churches and the homeless.

People around me introduced me to the world of volunteering and philanthropy, but it wasnt until Project Vacant Streets that I had my own thing, he said.

Misconceptions about homelessness
As a second career, Kelly was already a motivational speaker, giving lectures at college campuses and work settings about leaving lasting impressions while achieving your goals. A friend suggested that Kelly speak at the Community Partnership for the Homeless in Miami, which each night houses about 700 of Miami-Dade Countys estimated 4,300 homeless.

My first reaction was what could I possibly convey to the homeless? I was almost afraid of walking into the shelter, he said. Once Kelly stepped inside the shelter, though, he said the rooms energy convinced him that he needed to change Americans misconceptions about homelessness.

In less than six months, Kelly put his idea into practice with help from his wife, who handles logistics and phone calls, and from friends and family who volunteer. Now hes thinking about trying to turn the project into a reality TV show.

The program starts with an open house at the homeless shelter. Kelly narrows a group of candidates, selecting three he sees have the potential to complete the program.

One of the candidates Kelly recently picked was Fred Rice, 53, a waiter in Los Angeles, San Diego and Atlanta for nearly 30 years before the money ran out and he became homeless. For 16 years, Rice bounced from city to city, shelter to shelter.

Im putting all but two of my marbles into Frank Kelly, him teaching me basically the science of how to get a job, Rice said.

Having picked the hopefuls, Kelly goes to work on getting them to work.

Give some type of pitch for an interview. That gives you the confidence to walk in there with a positive attitude, Kelly tells the latest group during one of several mock interviews.

He critiques and refines their resumes — over and over. They get a makeover at a Target, with Kelly on hand to give advice about whats appropriate for work.

The final challenge is what Kelly calls the emotional change, with the candidates sharing their homeless experience during a speech to supporters and students at the University of Miami.

Americas biggest fear is speaking in public. So if these people can overcome that, then who is to say they cant overcome any interview? Kelly said.

Success stories
Some employers arent willing to give Kellys pupils a chance.

A large majority shut their doors on our project. They just dont get it. They have these preconceived notions of Americas homeless, said Kelly, who spends his lunch break calling contacts and sending out e-mails to help the candidates land an interview.

Several companies, however, have offered their services. Perry Ellis, the menswear line, has donated professional attire for candidates.

Kelly said hes spent about 1,500 hours and $8,000 to $10,000 of his own money on the project.

His payoff has been success stories like Rice, who was hired as a food server at the Eden Roc Hotel on Miami Beach. The program, Rice said, brought me back to the living world.

- | ‘Best Dressed’ man helps homeless |

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| Obama not rushing to tackle military gay ban

Obama-not-rushing-to-tackle-military-gay-ban WASHINGTON - President Barack Obama will focus at the right time on how to overturn the dont ask, dont tell ban on gays serving openly in the military, his national security adviser said Sunday.

I dont think its going to be — its not years, but I think it will be teed up appropriately, James Jones said.

The Democratic-led Congress is considering repealing the 1993 law. Action isnt expected on the issue until early next year.

Senate Majority Leader Harry Reid, D-Nev., recently wrote Obama and Defense Secretary Robert Gates on their views and recommendations on the contentious policy. In Sept. 24 letters, Reid also asked for a review of the cases of two U.S. officers who were discharged from the military because of their sexuality.

At a time when we are fighting two wars, I do not believe we can afford to discharge any qualified individual who is willing to serve our country, Reid wrote.

Jones said Obama has an awful lot on his desk. I know this is an issue that he intends to take on at the appropriate time. And he has already signaled that to the Defense Department. The Defense Department is doing the things it has to do to prepare, but at the right time, Im sure the president will take it on.

As a candidate, Obama signaled support for repealing the law. To the disappointment of gay-rights supporters, he has yet to made a move since taking office in January. The White House has said it will not stop the military from dismissing gays and lesbians who acknowledge their sexuality.

Last year, 634 members of the military were discharged for being gay, or .045 percent of the active-duty U.S. force, according to an Aug. 14 congressional report.

The largest number of gays who were ousted under the dont ask, dont tell policy came in 2001, when 1,227 were discharged, or .089 of the force.

The House is considering legislation to repeal dont ask, dont tell and allow people who have been discharged under the policy to rejoin the military.

Jones appeared on CNNs State of the Union.

- | Obama not rushing to tackle military gay ban |