Relevant and even prescient commentary on news, politics and the economy.

USA: History’s Largest Free Port for Financial Freebooters?

By Jeff McCord of The Investor Advocate

USA: History’s Largest Free Port for Financial Freebooters?

The term “freebooter,” derived from the Dutch vrijbuiter, means one who openly steals property. Once freebooters sailed the coasts of the Carolinas, Florida and Caribbean isles from free ports such as Port Royal, Jamaica, taking what they wished with little or no consequences because Jamaican Colonial authorities granted them immunity.

Today, a federal appeals court may determine if the United States has become the largest such free port for swindlers in modern history. At issue is the Supreme Court’s controversial 2010 decision (Morrison v. National Australia Bank), that provides immunity from investor accountability to off-shore shysters preying on Americans as well as on-shore fraudsters plundering foreigners as long as the fraudulent transactions take place outside the USA or involve securities listed overseas. Many experts believe Morrison also provides immunity from SEC civil and federal criminal actions.

“Political” High Court Decision to Curtail Investor Rights May Also Free Criminals

With Morrison, the Supreme Court “cavalierly overturned 40 years of precedent,” says former SEC commissioner and Brooklyn Law professor Robert S. Karmel. She says there was no compelling reason for the Supreme Court to even hear the case and onlyu did so to “further its campaign to limit [investor fraud] class actions to the extent possible”

See Justce Antonin Scalia’s majority [Morrison] opinion is blatantly political…NY law journal

Justice Scalia’s majority opinion may also be so broadly worded that the United States Court of Appeals for the Second Circuit may be compelled to conclude that no prosecution — civil or criminal — of wrongdoers peddling foreign securities is possible within the United States. Among other unfortunate and unforeseeable consequences, such a ruling would overturn the criminal convictions of two flamboyant “old school” fraudsters: Alberto Vilar, who falsely claimed to be a Castro-fleeing Cuban émigré but did have an investment operation in Panama (an old pirate haunt); and, Ross Mandell, a broker of questionable repute who resides in Boca Raton (the new Port Royal?).

Flamboyant Convicted Swindlers May Be Off the Hook

First, let’s meet Ross H. Mandell, a Boca domiciled broker with a regulatory challenged past – he was suspended from trading on the New York Stock Exchange — and million dollar life-style, the New York Times reported. A unanimous federal jury convicted him of running an old-fashioned “boiler room” operation in Florida to defraud mostly British investors by using fraudulent sales pitches to flog questionable stocks on a London exchange. Although, he allegedly defrauded Americans as well, his lawyers contend the statute of limitations had run out on those crimes.
New York Times columnist Floyd Norris recently described Mr. Mandell:

“The government says the money he gained from defrauding investors paid for ‘first-class flights, five-star hotel suites, expensive meals, adult entertainment and personal spending,’ even though his firm was losing money. It says some of the money was used for ‘work done on Mandell’s penthouse apartment at Trump U.N. Plaza’ in Manhattan.”

See: NYT…Us justce vs. foriegn fraud

Let’s now consider the case of Mr. Alberto Vilar, a high-profile broker-dealer who was found guilty in federal court of stealing millions of customers’ funds. Listed by Forbes in 2005 as among the 400 wealthiest men in America, Mr. Vilar had assets believed to total nearly $1 billion. He was an opera lover and a very generous, well-known patron. Despite his love of the performance art, Mr. Vilar reportedly embezzled $2 million from star tenor Placido Domingo, in an incident unrelated to his securities conviction. See: New Yorker

In an appeal citing Morrison, Mr. Vilar’s attorneys say he should be released from incarceration at a federal facility and his conviction overturned because the transactions and investments at issue were allegedly structured at the defendant’s Panamanian registered broker-dealer, rather than within the United States. In a sign some believe signals that the federal appeals court may agree, Mr. Vilar was ordered released on bail pending the appellate decision. See: Bloomberg…amerindo cofounders vilar and tanaka-wi release-on-bail

Foreign-Based Frauds of Petty Criminals and Too-Big to Fail Banks

These are simply two recent fraud cases that may be turned upside down by Morrison. And, although the alleged crimes were egregious, these were relatively small scale transgressions when measured against the off-shore connivances of too-big-to-fail banks that can cause multi-billion dollar investor losses. Think Goldman Sachs and its’ allegedly fraudulent sub-prime mortgage derived collateralized debt obligations structured in London, but sold to U.S. investors.

Whether petty criminals or clever multi-national corporate schemers, such wrongdoers may have been dealt a “get out of jail free” card by the Supreme Court. They have also been immunized from accountability to their victims.
Congress Should Take Action before Jolly Roger flies beside Stars and Stripes
Many agree with former SEC commissioner Karmel (cited above) that it is time for Congress to overturn Morrison. Salvator J. Graziano, Esq, a partner at Bernstein Litowitz Berger & Grossman, LLP, president of the National Association of Shareholder and Commercial Attorneys and former Assistant District Attorney for Manhattan agrees. He summed-up the wider repercussions of Morrison in calling for Congress to take action:

“With Morrison, the Supreme Court unwittingly has allowed the U.S. to become a safe haven for fraud so long as the securities at issue are listed abroad. On behalf of investors at home and abroad, we ask Congress to over-turn the unfortunate Morrison decision by restoring the rights of action of defrauded investors and clarifying the authority of federal regulators and the Department of Justice.”

Congress should act before the Jolly Roger flies beside the Stars and Stripes over Wall Street and Boca Raton.

Trade and Development

Trade and Development

Run 75411 picked up this recent report over at Economists View where someone (Goldilocksisableachblond?) pointed to a recent UN report TRADE AND DEVELOPMENT REPORT, 2012

Run says: There are some interesting comments within the Overview to the much longer report, which I found germaine to what is happening in the US and which have been addressed before by many of us. I have not had a chance to read the entire report. Bolding within the quotes are my own. I am more interested in your thoughts and comments. This is on developed countries and there is more on developing countries to be added later.

The turning point: financial liberalization and “market-friendly” policy reforms
In order to comprehend the causes of growing inequality, it should be borne in mind that the trend towards greater inequality has coincided with a broad reorientation of economic policy since the 1980s. In many countries, trade liberalization was accompanied by deregulation of the domestic financial system and capital-account liberalization, giving rise to a rapid expansion of international capital flows. International finance gained a life of its own, increasingly moving away from financing for real investment or for the international flow of goods to trading in existing financial assets. Such trading often became a much more lucrative business than creating wealth through new investments.

More generally, the previous more interventionist approach of public policy, which strongly focused on reducing high unemployment and income inequality, was abandon. This shift was based on the belief that the earlier approach could not solve the problem of stagflation that had emerged in many developed countries in the second half of the 1970s. It was therefore replaced by a more “market-friendly” approach, which emphasized the removal of presumed market distortions and was grounded in the strong belief in a superior static efficiency of markets.” (Page 18)

The failure of labour market and fiscal reforms
Just ahead of the new jump in unemployment in developed countries − from an average of less than 6 per cent in 2007 to close to 9 per cent in 2011 − the share of wages in GDP had fallen to the lowest level in the post-war era. Due to their negative effect on consumer demand, neither lower average wages nor greater wage differentiation at the sector or firm level can be expected to lead to a substitution of labour for capital and reduce unemployment in the economy as a whole. In addition, greater wage differentiation among firms to overcome the current crisis in developed countries is not a solution either, because it reduces the differentiation of profits among firms. Yet it is precisely the profit differentials which drive the investment and innovation dynamics of a market economy. If less efficient firms cannot compensate for their lower profits by cutting wages, they must increase their productivity and innovate to survive.”
(Page 22)

A reorientation of wage and labour market policies is essential ?????????????????

In addition to employment- and growth-supporting monetary and fiscal policies, an appropriate incomes policy can play an important role in achieving a socially acceptable degree of income inequality while generating employment-creating demand growth. A central feature of any incomes policy should be to ensure that average real wages rise at the same rate as average productivity. Nominal wage adjustment should also take account of an inflation target. When, as a rule, wages in an economy rise in line with average productivity growth plus an inflation target, the share of wages in GDP remains constant and the economy as a whole creates a sufficient amount of demand to fully employ its productive capacities.”

Run here: I think as Spencer and others have so aptly pointed out, productivity gains have been skewed to Capital since the seventies.

Influencing income distribution through taxation

The net demand effect of an increase in taxation and higher government spending is stronger when the distribution of the additional tax burden is more progressive, since part of the additional tax payments is at the expense of the savings of the taxpayers in the higher income groups, where the propensity to save is higher than in the lower income groups.

The experience of the first three post-war decades in developed countries, when marginal and corporate tax rates were higher but investment was also higher, suggests that the willingness of entrepreneurs to invest in new productive capacity does not depend primarily on net profits at a given point in time; rather, it depends on their expectations of future demand for the goods and services they can produce with that additional capacity. These expectations are stabilized or even improve when public expenditures rise, and, through their income effects, boost private demand.

Taxing high incomes, in particular in the top income groups, through greater progressivity of the tax scale does not remove the absolute advantage of the high income earners nor the incentive for others to move up the income ladder. Taxing rentier incomes and incomes from capital gains at a higher rate than profit incomes from entrepreneurial activity – rather than at a lower rate as practiced so far in many countries – appears to be an increasingly justifiable option given the excessive expansion of largely unproductive financial activities.
Page 26

Deregulation Without Cultivating Better Rules

Top bank lawyer’s e-mails show Washington’s inside game at Bloomberg shares insights into how regulation is impacted when regulators and the industry regulated share too much.

Pruning Hedge Fund Regulation Without Cultivating Better Rules By Jesse Eisenger, ProPublica at Dealbook, NYT also writes on the SEC and de-regulationscommercial water slides for sale.

Guest post: “Mother” of All Bank Frauds Shocks and Awes Regulators

“Mother” of All Bank Frauds Shocks and Awes Regulators,
As LIBOR Victims Seek Justice

By Jeff McCord of The Investor Advocate
August 21, 2012

Many wonder why Federal regulatory precincts are so quiet several weeks following discovery that the London Interbank Offered Rate (LIBOR), a key interest rate determining charges to and earnings by American borrowers, lenders, pension funds, retirees and consumers had been rigged for years to benefit a handful of the world’s largest banks. Experts estimate damages to the economy can be measured in multiples of trillions of dollars.

Predictably, a relatively minor fine of $450 million – chump change in Jamie Dimon’s world – was levied by US and British regulators upon Barclays Bank, the most obvious of several likely perps in history’s biggest bank heist. Fortunately, the vigilant attorneys general of New York and Connecticut are issuing subpoenas to JP Morgan Chase and Citigroup, among other banks too big to regulate federally. And, private class action lawsuits charging violations of securities and anti-trust laws have been launched.

But, where are the expressions of horror and outrage, and other hot air emissions from the people’s elected representatives in Washington? We look in vain for a William Jennings Bryan, the Nebraska Congressman and 1896 presidential candidate who shouted at bankers: “You shall not crucify mankind on a cross of gold!”

Time to Order Golden Crosses?
Should middle-Americans use remaining credit on nearly maxed-out cards to buy life-sized gold-plated crosses at mall jewelry stores and report to their local mega-bank offices? Will bank “relationship managers” provide the nails, or will we need to pay for those as well?

These are just a few of the questions that cannot be fully answered until after the election. But, we can draw some conclusions from the statements of our presidential candidates and the views of well-informed observers.

Mitt Would Roll-back Regulations; President “Can’t get Too Involved”

First, let’s try on the Mitt. Governor Romney has long said he would roll back the regulatory knuckle raps enacted in the Dodd-Frank financial reform law. On the LIBOR fraud, he is apparently voting with his wallet. During his much publicized Olympic trip to London, Governor Romney met privately with bankers from Barclays and other financial behemoths, pocketing $2 million in campaign contributions for his time and this promise:

“I’d like to get rid of Dodd Frank and go back and look at [all financial] regulation piece by piece.”

With his Treasury Secretary accused of looking the other way years ago when as NY Fed Bank president he learned of LIBOR rigging, it is unlikely President Obama will call for “heads to roll.” Indeed, in one comment made by the White House on what is now being called the “Crime of the Century” by at least one syndicated columnist, White House press secretary Carney admitted he hadn’t discussed LIBOR with the President, but assured reporters the Administration supports financial reform, adding:

 “I don’t want to get too involved in Libor because I know it’s under investigation.”

What of the announced SEC and Department of Justice investigations? Based on their record pursuing the mortgage-backed securities and derivatives swindlers, we can’t hope for much. A Zachs financial analyst writes in a NASDAQ blog that a few more fines may be levied:

“Currently, we remain skeptical for JPMorgan and wait to see what the future beholds. If it is found guilty in this LIBOR scam, it is liable to be fined by authorities. Notably, in June, Barclays already faced a fine of $450 million by certain U.S. and U.K. authorities for rigging the rate.”

With recently revised and reported profits of $4.92 billion in just the first quarter of this year and with Cracker Jack PR and lobbying teams operating effectively, Jamie Dimon and his senior managers are likely sleeping soundly. After all, if anyone gets jail time, it will be line traders or lowly underlings.

Hedge Fund Says Private Lawsuits Will Recover LIBOR Damages
No wonder James Rickards, a New York hedge fund manager, author and columnist, wrote in US News & World Report that recovery of the immense financial damages suffered in this “mother of all bank scandals” by US mortgage holders, investors, small financial institutions and so many others will not come through regulators. Although a few criminal prosecutions may be launched and more fines levied, justice will be achieved and damages recovered by private lawsuits prosecuted by class action attorneys on behalf of victims, Rickards suggests.

He even dares to give voice to what many on Main Street have been thinking since 2008:

“Of course, the insolvency of a major bank in the face of LIBOR rate rigging charges cannot be ruled out. In that case, good riddance. The big banks have perpetrated a crime wave longer than that of Bonnie and Clyde. If it has taken the law this long to catch up with them, it’s better late than never.”

Lonely Federal Candidate Calls for Accountability

At least one federal candidate this year joins Rickards in demanding accountability for LIBOR fraudsters. Elizabeth Warren, whose Massachusetts Senate campaign is not bank-rolled by financial services giants, says:

“Real accountability would mean prosecuting the traders and bank officials who violated federal laws and prosecuting the executives who knew what they were up to. It would mean forcing executives to pay back any inflated compensation that was based on padded profits.”

Syndicated columnist and University of Southern California professor Robert Scheer seconds Ms. Warren’s call for justice. Unfortunately, he doesn’t see jail cells for LIBOR fraud masterminds:

“Modern international bankers form a class of thieves the likes of which the world has never before seen. . . . The modern-day robber barons pillage with a destructive abandon totally unfettered by law or conscience and on a scale that is almost impossible to comprehend.”

Federal Judge Calls Time-out for LIBOR Suits, But Invites More

That brings us back to lawsuits and private enforcement of securities laws. Despite a decade or more of Congressional and Supreme Court efforts to reduce liability for those corporate and financial officers who design and perpetrate such complex crimes, investor and consumer lawsuits filed in federal and state courts can still recover damages and discipline robber barons with the only punishment they understand: taking away their money.

Small banks, municipalities, pension funds and other victims of the rigged LIBOR market are lining-up to do just that. In response to the magnitude and intricacy of the alleged violations of securities and anti-trust laws, on August 6th US District Judge Naomi Reice Buchwald in Manhattan placed a hold on new LIBOR lawsuits while she sorts out the complaints already filed. She did, however, encourage the filing of new complaints, as she explained to the Chicago Tribune:

“While parties are free to file new complaints—and, indeed, are encouraged by the court to do so if they do so promptly . . . I am imposing a stay on any action that is not the subject of a pending motion to dismiss. The stay will last until the current motions to dismiss are resolved.”

Once again, hedge fund manager Rickards explained in layman’s terms what is likely to happen:

“Bank defendants in cases like this typically ask a judge to dismiss the case because the claims are too vague. However, the facts in this case have already been made plain by Barclays . . . Once the plaintiffs get past the motion to dismiss, they begin discovery, which gives the class action lawyers access to internal E-mails, tape recordings, depositions, and other books and records of the perpetrator banks. Based on small glimpses of the doings at Barclays, the communications of the other major bank LIBOR trading desks could be shocking.”

Banks May Be Held Accountable This Time

Once the undoubtedly “shocking” internal documents of the mega-banks come to light and the public learns the sordid details of the “crime of the century,” politicians may find standing idle a difficult posture. Regulators and the Department of Justice may be handed the evidence to seriously prosecute the perpetrators (whether they want to or not).

If the private actions and discovery process are permitted to proceed, the mega-banks who have caused global economic mayhem of historic and biblical proportions may finally be brought to justice. Middle-Americans may get their day in court.
# # #

But then again…

I can’t help but compare Yves Smith’s appraisal of SEC performance and either party’s political attitude to the previous post by Peter Henning:

If you merely looked at the SEC’s record on enforcement, you’d conclude that it suffered from a Keystone Kops-like inability to get out of its own way. The question remains whether that outcome is the result of unmotivated leadership (ex in the safe realm of insider trading cases) and long-term budget starvation leading to serious skills atrophy, or whether the SEC really, truly, is so deeply intellectually captured by the financial services industry that it thinks industry members don’t engage in fraud, they only make “mistakes”?

It’s sure looking like the latter. We’ve railed repeatedly on the refusal of the SEC to use an obvious tool, Sarbanes Oxley, to pursue not only the massive failings of these firms to install adequate risk controls during the crisis, but also to go after obvious recent cases, namely, the JP Morgan CIO losses and the MF Global collapse.

Further confirmation comes today in the form of investor abuse and repudiation of Dodd Frank requirements that the SEC hopes to slip next week when hopefully no one will notice.

Fines as special tax rates?

The NYT reported that:

Standard Chartered, the British bank, has agreed to pay New York’s top banking regulator $340 million to settle claims that it laundered hundreds of billions of dollars in tainted money for Iran and lied to regulators.
(Dan here…We do not know how much remained with Standard Charter as various kinds of fees, admin., and charges…was there a premium for risk?)
…it falls near the middle of the collective settlements that the Justice Department and the Manhattan district attorney have reached with other global banks in recent years over money laundering charges, from $619 million with ING bank in June to $298 million with Barclays in 2010.

For a bit of speculation directly from the article with no special knowledge, let’s  comparison shop for human consumption and readers:

($345,000,000 /  $250,000,000,000 =  .00138 = one tenth and a bit of a percent) and to compare to a more human scale,  if you handled $100,000 for ten years in business it would be $1,000,000 times .00138 = $1,380  fine.  Not a hard thing to pay.

Another way to think of it is:   If you made 10% (Who knows?) of 250 billion as retained in some way in costs (salaries, bonuses, use of facilities risk premiums and such) that is 25 billion, so the fine might be ten times a % of money made billable at 2.5 billion/year, and a fine of 1.38 %, means a $345,000,000 fine out of $2,500,000,000 billable for the year.  A special tax rate of 1.38% for one year for risks over a decade is pretty good, no?

What am I missing?

Is That It for Financial Crisis Cases?

Peter J. Henning, a colleague of Linda Beale, poses the question in the NYT:

Is That It for Financial Crisis Cases?

Last week turned out to be a good one for Goldman Sachs. The Justice Department closed a criminal investigation of the firm and its chief executive, Lloyd C. Blankfein, and the firm disclosed that the Securities and Exchange Commission had decided not to pursue a civil fraud case related to a subprime mortgage deal.
When the story of the financial crisis is finally written, this may turn out to be the denouement of the government’s investigations of Wall Street for potential wrongdoing that contributed to the financial crisis in 2008.

Investment banks like Goldman load their disclosure documents with plenty of generic disclaimers that can support a defense that no one sought to mislead buyers. It may not be so much a matter of weak laws as the requirement to show beyond a reasonable doubt that a defendant had the intent to commit a crime, a significant barrier to successfully prosecuting any fraud case.
And proving a perjury case is even more difficult because it must be shown that the defendant intentionally lied, not just that the testimony was incomplete or inaccurate. Whether Goldman’s position was “massive” or not looks to be a matter of degree, making it almost impossible to prove perjury.

The S.E.C.’s decision was a bit more surprising because the enforcement division told Goldman in February that it planned to recommend civil charges against the firm related to its sale of a $1.3 billion mortgage-backed security. Goldman had already settled allegations in 2010 about how it structured a collateralized debt obligation known as Abacus, so even if the S.E.C. had pursued another case, it was unlikely to contain any major new revelations about systemic misconduct.

It does not look as if any other criminal cases against other banks are likely to emerge from the financial crisis now that four years have gone by. The Justice Department has already passed on cases against executives from firms like Countrywide Financialand the American International Group, and nothing else seems to be drawing the attention of prosecutors at this point.

New laws would not make it any more likely that senior executives could be pursued unless they included liability as a “responsible corporate officer” for the conduct of underlings without having to prove an executive’s knowledge or recklessness.
Wall Street would be sure to put up quite a fight if expansive criminal prohibitions were introduced that made it easier to prosecute senior managers for the violations of lower-level employees. The pushback in Congress against the Dodd-Frank Act’s regulation of the financial sector shows that there may not be much appetite for additional government involvement in the financial sector.

Euro area troubles, banks, and sovereign debt connections

Economist Mark Blyth talks on Europe and rescuing the banks…

See 35 minutes in on context for LIBOR troubles. (70% of the special investment vehicles designed to pump and dump mortgages belong to European not American banks … Euro banks listed their periphery debt as Tier One Capital under Basel.)

Good news for the big banks

Posted from an e-mail today comes this comment from Noni Mausa.  For me the key is how to filter the noise from the music so to speak.  And this involves being willing and then doing the quick checks on something that catches your eye.  You don’t have to agree with Noni’s conclusions to make yourself ask the questions needed to put articles in context.

It makes me more certain that we need  a section for those who are mildly interested in economics as it affects their lives, or feel either not qualified or reticent to even ask a simple list of questions in an effort to understand what is going on.   With examples.

by Noni Mausa

Good News! Little Billy Recovering Well!

The Associated Press had an article this morning about how well the banking sector is recovering from the financial crisis.  I had to giggle — it’s like reporting that little Billy is  feeling better now after getting a tummyache from eating Little Susie’s entire birthday cake.

I commented online to that article, but here’s my comment for your delectation.
Full article at
U.S. banks see their fortunes rise
Article by: MARCY GORDON , Associated Press, Updated: July 5, 2012 – 10:42 PM

Profits are up, bank failures are down, more loans are being repaid
on time and losses are ebbing.” 

I wrote:

And this is being presented as GOOD news?  Let’s see:

— Interest rates are down, so they’re not making money off interest, or not much.
— Loans are being offered “cautiously,” which I guess means they’re only loaning to people and businesses who don’t really need it.
— Instead, they are profiting from “higher account fees and more mergers,” that is, charging more the same or lesser services. (Could you remind me how this cannot be a drag on the economy?)
— Bank failures are slowing — but hundreds of banks have closed down ( or been swallowed up by others since 2000.  Thirty-one have closed in 2012 alone, all smaller, local banks from the look of the lists.

— But the big banks are much bigger.  There are currently about 7,500 banks in the US, of which the largest (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs) held more than
$8.5 trillion in assets at the end of 2011, equal to 56 percent of the U.S. economy, according to the Federal Reserve.

The Big Five today are about twice as large as they were a decade ago relative to the economy.
How much of their profits comes from systemic fraud and extortion? I
guess we’ll find out once the FBI have finished their work.


The stability and profits of the banking sector is a good news story indeed — if you happen to be a bankster.

Noni Mausa
PS  I found all this data online in the 17 minutes it took me to write
this comment.

PPS  What is it with the Associated Press?  They seem to often have
these rah-rah articles.

The Crux of the Problem in the Financial Industry

by Mike Kimel

The Crux of the Problem in the Financial Industry

A great set of lines from William Black posted at Barry Ritholtz’s Big Picture:

The Jamie Dimons of the world know that if they win the gambles they will be made immensely wealthy and that when they lose the gambles massively the federal government will bail them out. Every gamble a federally insured bank (or an implicitly guaranteed SDI) takes is a gamble with government money. Bank leverage is always extreme in the modern era; it vastly exceeds the reported (and often inflated) capital. The government is the true creditor through its explicit and implicit guarantees of the bank’s creditors.

Now, that isn’t necessarily a prescription for failure. Expectations of behavior, and public shame, make a big difference when it comes to determining whether people whose instinct are to act in their own best interests no matter how much harm it will cause to others will act on those instincts. 

In general, the Jamie Dimons of the world (to use Black’s phrase), if they somehow found themselves and a small child the only survivors of an accident, would protect the child until help arrived, though it might profit them to loot the child’s belongings and jettison the child as dead weight. But it isn’t merely personalizing a potential victim that keeps them from, well, making them into a victim. In general, the Jamie Dimons of the world, if told to charge a hill during a war, will charge said hill, even if the opportunities to profit are greater by staying behind. 

So what makes finance different? Or is that the wrong question, and if so, what is the right question?