Cringley's got a great columns about some possible dangerous usage of our regulation law:

Here's an example of how it will work. Imagine your bank is a medium-sized publicly traded bank headquartered in the U.S. midwest with a national charter (that is, regulated by federal, rather than state, banking authorities). Now imagine your bank is not in compliance with Section 404 of Sarbanes Oxley. Section 404 requires as part of the regular audit process that the bank's accounting firm (generally one of the Big 4) certify whether or not the bank is Section 404 compliant. Accounting firms, having paid billions in penalties recently for overlooking accounting errors at companies like Enron and Tyco, aren't going to be lax about this provision. If the bank isn't Section 404 compliant, which means they haven't applied sufficient internal controls to data, the auditors will report that.

Now what?

Well, if your bank isn't in compliance (many won't be), they'll have to very quickly get in compliance. They'll also have to pay a fine and perhaps one or more officers of the bank will do some time in prison. Really.

But there is a funny thing about banks, and that's the way they are regulated and controlled, which makes possible a very different outcome in the case of a Section 404 violation. Technically, the bank can't even continue to operate, because the legal definition of a bank is as a compliant organization. So a very real possibility is that your bank will be forced to merge with another bank that IS in compliance.

That's the new scam. Big banks with sophisticated IT operations are going to appear at the doors of smaller, less sophisticated, banks literally demanding the keys. They'll take over the building, the tellers, and of course the deposits for a price tag that may well be zero.

That's a heck of a deal for everyone except the bank's current shareholders.

PBS | I, Cringely . August 4, 2005 - The New Robber Barons

What is not uncertain, however, is that our Current Account
Deficit has granted a degree of control and authority to another sovereign
nation over our own economy. The net results of that may be determined over the
coming decade.

Buffett (who I've come to dislike inspite of my respect for him) warned of this in 2003. Bill Gross specifically predicted this for 2005.

The Big Picture: Federal Reserve Responsibilities Outsourced to China

Thomas Friedman spends an hour talking to MIT about his new book. Watch streaming video of the May 16 event.

Chances are good that Bhavya in Bangalore will read your next x-ray, or as Thomas Friedman learned first hand, "Grandma Betty in her bathrobe" will make your Jet Blue plane reservation from her Salt Lake City home. In "Globalization 3.0," Friedman contends, people from far-flung places will become principal players in the marketplace.

The World is Flat: An Hour With Thomas Friedman | MIT World

] More than a third of the mortgages written in the
] Washington area this year are a risky new kind of loan
] that lets borrowers pay back only the interest, delaying
] for years repayment of any loan principal. Economists
] warn that the new loans are essentially a gamble that
] home prices will continue to rise at a brisk pace,
] allowing the borrower to either sell the home at a profit
] or refinance before the principal payments come due.

] The loans are attractive because their initial monthly
] payments are tantalizingly low -- about $1,367 a month
] for a $320,000 mortgage, compared with about $1,842 a
] month for a traditional 30-year, fixed-rate loan. If home
] prices fall, though, borrowers could lose big.

] "People are buying houses like they used to buy cars,"
] said Alan E. Hummel, past president of the Appraisal
] Institute, who likened the process to buyers leasing a
] car. "They are renting the property from the bank, in
] this case," he said.

Decius was recently telling me about these loans. We both agreed they were a very stupid proposition. Apparently, they are catching on like wildfire, accounting for the bulk of homes sales in upscale areas. When the housing bubble bursts, the banks are going to own about 40% of your local upscale communities, and they are going to be selling for extremely low prices. Either that, or renting houses will become the norm once the ensuing banking scandals calm down, because that's pretty much what is happening right now..

America has officially given birth to Exurbia, defined by the "McMansion" and the "debt-hole".

Many Buyers Opt for Risky Mortgages

As far as I can tell, nobody in a position of power is thinking about how we'll deal with the consequences if China actually gives in to US demands, and lets the yuan rise.

The Chinese Connection

Warning, this is not a test. The world is flat. "Hello, my name is Rajiv, how can I help you?"

NYT | Friedman: It's a Flat World, After All

] China has overtaken the US in the consumption of basic
] agricultural and industrial goods, a new survey says
]
] China, with its 1.3bn population and booming economy, is
] now the world's biggest consumer of grain, meat, coal and
] steel.
]
] China is well ahead of the US in the consumption of goods
] such as television sets, refrigerators and mobile phones.

As well as meat, steel, and coal... As expected.. Six and rising.

BBC NEWS | Asia-Pacific | China emerges as global consumer

It is always difficult to decipher just what the often-opaque Fed chairman means.

The New York Times shares your confusion.

No quote or phrase as memorable as "Irrational Exuberance" has come out of Greenspan's most recent comments, but there is no doubt of a sharp edge that can be felt slowly cutting. I hope our parents enjoy their Social Security. Security related problems seem to be the forte of my generation. Not all of them are globalized in nature, most are very domestic, much like Social Security. I don't feel very secure. I don't feel like anyone is looking out for us, and at the same time expecting us to do all the hard work and take all the hard breaks.

Mr. Greenspan's Warning

] Although in recent years the proportion of our labor
] force made up of those with at least some college has
] continued to grow, we appear, nonetheless, to be
] graduating too few skilled workers to address the
] apparent imbalance between the supply of such workers and
] the burgeoning demand for them. Perhaps the accelerated
] pace of high-tech equipment installations associated with
] the large increases in productivity growth in recent
] years is placing unachievable demands for skilled
] graduates over the short run. If the apparent
] acceleration in the demand for skilled workers to staff
] our high-tech capital stock is temporary as many presume,
] the pressure on our schools would ease as would the
] upward pressure on high-skilled wages.

In english: "We needed a lot of engineers to set up the new infrastructure over the past few years. Admins, Programmers, Network Engineers, etc... We're done doing that now. We don't need ya'll anymore. Thanks for all the productivity growth. I'm sure you can find a suitable job in another industry at a significant reduction in pay. You can rest assured that the overall economy has benefited greatly from your work. We're not planning to share the rewards with you, because you don't own it. We own it. We're looking for people who own stock to do really well in the coming years. We're exited about that, and we think you ought to be excited for us. Oh, and BTW, I'm cutting your pension. Have a nice day."

FRB: Speech, Greenspan--Critical role of education in the nation's economy--February 20, 2004

] A little known online music store is experimenting with a
] new pricing system in which most songs start out costing
] a dime, and their prices fluctuate from there based on
] customer demand.

] "We a have certain amount of money allocated for this,
] and when that runs out, we'll go back" to higher prices,
] said Holly Cooper, Digonex's marketing director. "This
] is basically so we can gather some real world data."

Music site tries floating price tags | CNET News.com