Taking stock of a year’s worth of work

Columnist

Different people mark the end of the year in different ways. One of my traditions is reviewing my work for the year, owning up to mistakes that I haven’t corrected and following up on some of what I’ve written. It’s not as much fun as passing out my wife’s delicious Hanukkah cookies to my colleagues, another year-end ritual, but it has its uses.

●I predicted a difficult year for investors in 10-year Treasury securities. My February prediction — “buy today, cry tomorrow” about long Treasurys — has been accurate. But that was such an obvious call that it was like shooting fish in a barrel, as opposed to fishing.

Allan Sloan is a columnist for The Washington Post. He is a seven-time winner of the Loeb Award, business journalism's highest honor. View Archive

●What turned out to be wildly wrong was my prediction that the 30-year, 6.55 percent bonds that Verizon issued in September would tank. I mocked a friend who bought them at 106 percent of face value the day they were issued. When last I looked, they were trading at 116. Score one for you, David.

●I apologize for getting more than 400 of you to waste your time sending e-mails to the Financial Accounting Standards Board urging it to require companies to disclose the U.S. income taxes they pay for a given year. (Not in a given year, which is already required, but for a given year.) FASB took note of the e-mails but didn’t do what they asked.

Knowing actual taxes would allow the argument over corporate tax rates to be based on facts rather than on the fictional numbers that companies use in their financial reports. The FASB or the Securities and Exchange Commission could enlighten the debate in a minute by requiring companies to disclose the taxes-incurred information from their corporate tax returns, which would require almost no effort on the companies’ part. But absent a change, that’s not going to happen, because there’s no major business or political constituency to force the FASB or the SEC to do something that would irritate corporate America. Too bad.

●People wonder why I’m so down on the “Volcker rule,” the subject of my most recent column. It’s because I consider it horribly and needlessly complex, and comparing it to Glass-Steagall — a piece of relatively simple Depression-era legislation that held up for decades — is ludicrous. All Volcker and Glass-Steagall have in common is that they are named for people.

I’m no Paul Volcker fan. I had no dealings with him when he ran the Federal Reserve, but I watched him bungle Arthur Andersen after he was appointed to chair Andersen’s independent oversight board when the firm was marred by its role in the Enron scandal.

Volcker should have segregated the Andersen offices untainted by Enron and made them a new operation. A simple, obvious fix. Instead, he puffed on his cigars and held forth, and the firm was indicted and convicted on criminal charges. By the time the conviction was overturned, Andersen was long gone.

Emilie Feldman, an assistant professor at the University of Pennsylvania’s Wharton School (and a family friend), published a nifty paper in 2006 pointing out that had Andersen tried to combine with one of the other then-Big Five accounting firms, it would have violated antitrust standards. Thanks in good part to Volcker, the Big Five firms are now down to the Final Four. That works great for college basketball; for accounting, not so well.

●I found myself in the unusual position of siding with JPMorgan Chase, which I don’t remember ever having done before. I’m no fan of gigantism or complexity, both of which afflict JPMorgan. But the bank is not the source of all evil in America, as it’s being made out to be. The idea that it should not be allowed to deduct perfectly deductible payments it made to settle lawsuits brought by Fannie Mae, Freddie Mac and others is silly and unfair.

●And my ritual disclosure: One share of stock in a Detroit bank that I bought for $40 about 40 years ago when I was the Detroit Free Press banking reporter and wanted to make sure I could attend shareholder meetings has morphed into $2,350 of JPMorgan stock.

●I’m glad that I managed to figure out that President Obama’s post-presidential pension and other benefits are worth about twice as much as his Treasury proposal would allow regular people to have in pensions and retirement accounts without facing tax penalties. There are definitely abuses of the system, such as the likes of Mitt Romney sticking ridiculously low-priced assets into retirement accounts. But you know what? Had 401(k)s existed when I began my career and had I been able to max out on contributions, the value of my retirement benefits and pensions probably would have exceeded the proposed limit.

●Two final follow-ups: When I referred to “survivors” in my column about deciding when to take Social Security, I was talking about children and grandchildren, not spouses. Each member of a married couple has his or her own benefits. I don’t think of them as “survivors.” Sorry for the confusion.

●When I wrote about the proposed spinoff of my employer, Time Inc., from Time Warner, I said that former Time Inc. chief financial officer Howard Averill, who left to become CFO of Time Warner, had forfeited a $1.75 million payment that he would have gotten if the spinoff were completed. Soon after my column ran, Time Warner disclosed that it had paid Averill $1.75 million to compensate him for the foregone payment.

And that will do it. Have a great end of the year, and a happy, healthy and prosperous 2014.

Sloan is Fortune magazine’s senior editor at large.

business

economy

Success! Check your inbox for details. You might also like:

Please enter a valid email address

See all newsletters

Comments
Show Comments
Most Read Business

business

economy

Success! Check your inbox for details.

See all newsletters

To keep reading, please enter your email address.

You’ll also receive from The Washington Post:
  • A free 6-week digital subscription
  • Our daily newsletter in your inbox

Please enter a valid email address

I have read and agree to the Terms of Service and Privacy Policy.

Please indicate agreement.

Thank you.

Check your inbox. We’ve sent an email explaining how to set up an account and activate your free digital subscription.