Saturday, July 31, 2010

Newest Campbell case update

There has been some activity in Southern Africa regarding the SADC Tribunal ruling concerning land reform in Zimbabwe. The North Gauteng High Court in South Africa postponed the auctioning of the property owned by the government of Zimbabwe in South Africa. The postponement was due to an emergency application by the Zimbabwe Government. The application argued that because the properties were under diplomatic immunity the sale of the property could not be done legally.

There were two respondents in the case, a German Development bank, KFW Bankengruppe, and Afriforum. Both respondents separately won judgments against the ZIm government and now seek the sale of these properties in South Africa in satisfaction of those judgements. The bank won a judgment against the ZIm government for failure to pay back a loan. Afriforum is the civil rights group working with the farmers who won the SADC Tribunal ruling in 2008.

Concurrently, two of the white farmers involved in the ORIGINAL ruling by SADC, Louis Fick and Michael Campbell, applied to the tribunal for a further judgement based on the non-compliance of the government of Zimbabwe with the first judgement. In the current case, No. SADC (T) 01/2010, the Tribunal found that the Respondent, the Republic of Zimbabwe, was in continuous violation of previous court decisions. The 16 July judgment gave some pertinent case history. Mike Campbell brought the application based on two previous decisions of the Tribunal ruling in his and other farmer’s favour. [The first was Mike Campbell (Pvt) Limited and others v The Republic of Zimbabwe. The second was the case of William Campbell and Another v The Republic of Zimbabwe.].As a result of the non-compliance the Tribunal resolved to report the matter to the SADC Heads of State meeting to be held in Windhoek, Namibia in August 2010. It also ordered costs against the Respondent.

It remains to be seen if reporting to the Head of State of SADC members will have any consequences.

Saturday, July 17, 2010

Everything I learned in kindergarten

This is very American but none-the-less true.
Here are all the things you ever need to know to get through your life: personal and professional.

All I really need to know about how to live and what to do and how to be I learned in kindergarten. Wisdom was not at the top of the graduate school mountain, but there in the sand pile at school.
These are the things I learned:

* Share everything.
* Play fair.
* Don't hit people.
* Put things back where you found them.
* Clean up your own mess.
* Don't take things that aren't yours.
* Say you're sorry when you hurt somebody.
* Wash your hands before you eat.
* Flush.
* Warm cookies and cold milk are good for you.
* Live a balanced life - learn some and think some and draw and paint and sing and dance and play and work every day some.
* Take a nap every afternoon.
* When you go out in the world, watch out for traffic, hold hands and stick together.
* Be aware of wonder. Remember the little seed in the Styrofoam cup: the roots go down and the plant goes up and nobody really knows how or why, but we are all like that.
* Goldfish and hamsters and white mice and even the little seed in the Styrofoam cup - they all die. So do we.
* And then remember the Dick-and-Jane books and the first word you learned - the biggest word of all - LOOK.

SEC v. Goldman Sucks settlement

I am trying to drill down to what is the point of the whole settlement with Goldman thing. So many of the Wall Street Journal articles were all about who won and who lost. I think that misses the point. I think the point is that this settlement is all about a level of securities transactions that the retail investor never sees. (Thank God for that) or do they??

Let Goldman settle with the SEC. Let the SEC reduce charges from full on fraud to unintentional fraud. That is all fine with me. The real crux of the matter is sending the message that deception no longer is free. (totally nicked this from the WSJ) Also send the message that firms and banks need to be more responsible for the deals they create. Fair enough for that. But this deal concerns institutional investors and their complex and complicated rules.

What is not a factor in this deal is how things need to be reformed for the retail investor. That may be addressed by the Dodd-Frank bill. How do we protect the retail investor from big banks who create these new financial products that create mayhem? I think we are doing it. We pass laws afterwards that try to clean up the mess. And that is it. Consumer protection is a big part of the new financial reform and that is something. We will cover that in another blog.

Retail investors need to see that the capital markets are a force of nature. You cannot control the ocean and you do not want to. The ocean does wonderful things all on its own just like the capital markets. Let them create financial products that no one understands and then we need to respond and regulate it. It is not a pretty process but it just might be the thing that keeps us going as a nation. The financial crisis is unfortunate but we do not hate it enough to stop investing. To borrow from my friend from Bulawayo, Zimbabwe, people are not actually uncomfortable enough to make drastic changes. I think the same is true in the US despite all the media rhetoric.

The problem is not Goldman Sachs per se. It is really the law. We need to fund the SEC even better so that there is an incentive for bright people to work there. Those same bright people are now working for Wall Street firms. We need to create the atmosphere of respect for the SEC. Even more respect is needed. We might have the best level of respect between industry and regulator, but there is room for improvement.

If Goldman is the most law abiding citizen on Wall Street, then we need to alter the law. We need to get back to fundamentals. We need to address compensation and incentivise bankers and investment bankers to comply with the law. We need to show traders that complying with the law is actually better than making tons of $$. How do you do that? I am not sure.

Honestly, I think more people just need to remember everything they learned in kindergarten.

Sunday, July 4, 2010

Napa, California

Sterling Vineyards

Happy, happy 4th

Last week I spent a few days in Napa Valley, California--wine region USA--and learned that the first vines were brought there by priests. I think they were Franciscan. The Franciscans were very active up and down the Pacific coast of North America. I have visited all but a few of the Missions established by Blessed Fray Junipero Serra, a Franciscan priest from Majorca sent to convert the Indians of Alta California. So many brave pioneering men and women have helped to make America a powerful and prosperous nation warts and all. As today is Independence Day, I cannot help but think about the debt we owe to the Founding Father s and those who supported their vision for the colonies by fighting for independence and conceiving of a new way to govern. This is not so much about being nationalistic, rather it is about paying homage to brave people and those who put it all on the line for an idea they believed in.

Maybe where America has gone astray, if in fact it has, is to lose sight of how humble we should be when we consider what those men did in Philadelphia before and up until 1781 with the passage of the US Constitution. We benefited from the efforts of England in the colonies until the War of Independence and relied upon the writings of progressive European thinkers of the day. We retain that influence in our architecture our laws and our shared history. In California we are no less connected to Europe and Mexico and the culture here reflects that in the best possible ways-food, family law and architecture.

America is great in theory and we should continuously re-examine ourselves to ensure that we are on the right path…because we owe a debt. Between the World Cup and July 4th I have become completely sentimental (or maybe just more so).

I truly believe we would all be better off if we spent more time contemplating how connected we are. No Napa without the Spanish, no America without the English, no vuvuzelas without South Africa and apparently no football without the Germans!!

Today, I remember all those who died for their dreams worldwide and I hope in the future that We, the People, do a better job promoting peace & prosperity-no strings attached and no hidden agendas. Happy, happy Independence Day America. Be proud but stay grounded.