Good afternoon, View fans. Here is some of what I've been reading today.
Ernst & Young's bad day, 25 bad audits
The Public Company Accounting Oversight Board released its annual inspection report on Ernst & Young, the Big Four auditing firm. It wasn't pretty. Out of 51 audits that were reviewed, 25 had deficiencies so significant that the board's inspectors considered them to be audit failures. Unfortunately there isn't much that investors can do much with this information. The report didn't name any of the companies where Ernst botched the audits, per the board's longstanding policy of keeping client names secret.
The fun never seems to end at Ebix
Shares of Atlanta-based software company Ebix Inc. plunged after Greg Farrell of Bloomberg News reported that federal investigators are reviewing its cross-border financial transactions to check for money laundering. It's the latest in an incredible saga. Earlier this year Ebix was set to be acquired by Goldman Sachs, until the company disclosed that the U.S. Attorney's Office in Atlanta had begun an investigation into possible misconduct at the company.
Benjamin Lawsky has a new campaign
This was a good piece by the New York Times today about New York state's top financial regulator, Benjamin Lawsky, who sent warning letters to 35 payday lenders that were offering short-term loans at interest rates that in some cases topped 500 percent. It seems the state has usury laws after all. Who knew?
Howard Marks on confidence
Barron's published a lengthy article today by the Oaktree Capital chairman, who discussed market cycles and the pendulum of investor confidence. He's always worth a read. Excerpt: "If the economy continues to recover and the Fed's bond buying eases off, interest rates are likely to go further on the upside. But given the modest level of confidence at play, the markets should not turn out to be perilous. Most assets are neither dangerously elevated (with the possible exception of long-term Treasury bonds and high grades) nor compellingly cheap. It's easier to know what to do at the extremes than it is in the middle ground, where I believe we are today. As I wrote in my book, when there's nothing clever to do, the mistake lies in trying to be clever. Today it seems the best we can do is invest prudently in the coming months, avoiding aggressiveness and remembering to apply caution."
Move long, nothing to see here
American Banker comes to the defense of Raj Date, the former No. 2 official at the Consumer Financial Protection Bureau who left to form his own firm. Two House committees sent a letter to the agency asking if he was using his inside knowledge about its mortgage rules to benefit his company. Reporter Rob Blackwell writes that "some of the panels' concerns appear to be based on faulty information." Looks like some folks in Congress may have had it in for Date. And none of them would ever think about taking a turn through Washington's revolving door.
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)