December 7, 2013.
“Old soldiers never die, just the young ones.” (Anon).
Seventy two years ago today the Japanese Empire attacked the
U.S. fleet at Pearl Harbor in a surprise attack. The world changed thereafter. How many of our children remember the event
or the great and small persons who survived that attack, the battles and the
war? Patton, Wainwright, Bataan, Bradley,
MacArthur, Hurtgen Forest, Guadacanal, Code Talkers?
Manny is back,
sort of. Former New Mexico Senator
Manny Aragon has been released from federal prison to a half-way house after
about four years incarceration for his conviction on kick-backs from an
Albuquerque court house construction project. At one time Manny virtually controlled the
New Mexico Senate and much of state government. Although Manny will likely not be there, we
are within about six weeks of the start of the “short” session of the N.M.
Legislature. Despite the N.M.
Constitutional restrictions on the matters that can be considered—budget,
vetoed bills and matters on the Governor’s call—most of the legislation which
should be of concern to the financial services industry seems to come back year
after year. I think this year will not
be unique. As we approach the Session, I
will review the proposed legislation as it appears.
Social Media and
electronic communication continue to cause problems to business and
government. Winston Brooks,
Superintendent of the Albuquerque Public Schools, is an opponent of the
Martinez’ administrations’ education reforms that involve testing which may
impact teacher evaluations. Apparently,
after having been told by e-mail or a “tweet” that the Martinez’ education
chief, Ms. Skandera, was to appear at a rural location, Brooks made
inappropriate and allegedly sexist comments about her on his Tweeter
account. Mr. Brook’s was suspended for
three days and his future contract with the school system was not
extended. His future is uncertain.
Although one may
question the judgment of Mr. Brook’s posting anything on an obviously public
site, any business operating in 2013 should be aware that all managements’
company e-mails are subject to discovery in litigation, if not publicly available. Depending on the case, an officer’s social
media may be discovered in litigation.
The solution is neither easy nor fool proof—education and the threat of
inappropriate behavior being made public may be the only preventive measure.
Bitcoins
are in the news and being studied by the regulators. Bitcoins are a product of the Internet age. A
programmer or group of programmers invented Bitcoins in 2009. The Bitcoin “currency” is a rigid system of
virtual supply and demand functions, monitored by a peer group called
“miners”. Please don’t expect me to
explain this, except that the total Bitcoin supply is limited in its founding program. No more than 21 million Bitcoins will ever be
issued and by 2013 about half that number had been issued. Exchanges that trade Bitcoins for hard
currency are limited—they have a short life and two of the most prominent are
Japanese and Chinese. A small number of
companies accept them as a matter of routine commerce. Two of the Facebook veterans have announced a
purchase of 1% of the Bitcoins in existence, and are preparing a filing of a
Bitcoin ETF.
Why
all the fuss about Bitcoin? Until 2013
the Bitcoin market was fairly stable and unknown to most people. However, in October 2013, the F.B.I. arrested
the mastermind of the “Silk Road” drug empire, which operated in the so-called
“Dark Web” (an invention of U.S. security and law enforcement agencies formed
for clandestine activities—but downloadable by anyone). Silk Road was an Internet market place in
which transactions in drugs and I.D. theft occurred, masked by the “Dark Web”
promise of anonymity. All transactions
were in Bitcoin. “Silk Road” operated
with impunity until its mastermind felt aggrieved by some employees or business
associates and let out contracts to kill.
In the process he let his real Internet identity slip, and he was
caught.
Almost
immediately, the Bitcoin value dropped to less than $2.00 and then in the wake
of the “Silk Road” story, the Bitcoin value climbed to $1000 per Bitcoin. In testimony before Congress the regulators
voiced concern about the lack of regulation of the Bitcoin market, but
generally stated that such virtual currency had a place in the market. Ben Bernanke voiced support for the concept
of virtual currencies. But, like a wet
blanket, on December 4, former Federal Reserve Chairman Alan Greenspan termed
Bitcoin “not a currency” and predicted a “bubble” in Bitcoins.
On
November 8, 2013, the CFPB released its “tool” to assist lenders in complying
with the Dodd-Frank Act that requires that consumers be furnished a means to
find housing counselors before entering into housing and mortgage transactions. The deadline is near, February 2014. The
regulations appear at 12 CFR Part 1024.
Although the regulations do not appear all that burdensome (although
detailed), one wonders if New Mexico consumers will ever use a housing
counselor. How many housing counselor
meeting HUD requirements are there in rural areas of New Mexico. The regulations require a list of ten and
some proximity by zip code. Sounds
simple. Is it?
I will be in touch, as we know more
about the legislature.
Do good.
MARSHALL G MARTIN
Mobile: 505-228-8506
Office: 505-982-4611
