The US administration's paranoid obsession with terrorism has gone too far with the Securities and Exchange Commission's link on state sponsors of terrorism. It's a knee-jerk reaction that's badly conceived and shows a lot of sloppy thinking.

The list identifies Cuba, Iran, North Korea, Sudan and Syria as the evil state sponsors and when you click on each country, you get a list of companies that purportedly do business with them.

Now, you would have thought the SEC, supposedly the champion of business and investment, would have been more careful identifying the companies. Not so. There are companies on that list that no longer do business with those countries, or are winding back their involvement.

Two examples: the link to Credit Suisse's operations in Sudan ("As part of its continuing evaluation of risk, in the first quarter of 2006, the Group determined to limit the amount of business with counterparties in, or directly relating to, Cuba, Iran, myanmar, North Korea, Sudan and Syria. The Group has decided that it will not enter into new relationships with clients from these countries and will end all existing relationships with corporate clients and most private banking clients in these countries. Some designated relationships with private banking clients in these countries will be maintained subject to restrictions") and the Cadbury Schweppes link to Syria which reveals its operations in that part of the world have been discontinued.

The SEC's mind-boggling stupidity has drawn a lot of fire. The Institute of International Bankers has warned that it would discourage US listings and has sent letters to SEC chairman Christopher Cox and Treasury Secretary Hank Paulson demanding they take the site down.

The site has also come under fire from chairman of the House Committee on Financial Services Barney Frank who released a letter he sent to Cox, according to news reports, demanding the regulator does something about it

Frank wrote: "I hope you will give serious consideration to devising either a more rigorous, materiality-based methodology for developing the list you are presenting to investors or else eliminating the webpage entirely. Disclosure is important, but in this instance it is my belief the disclosure needs to be absolutely accurate or not occur at all."

Doing a blacklist is one thing. But checking the information on it to make sure it's right is another story altogether. Obviously too hard for the SEC. That would require some work.

This administration seems to be operating in another world. It's certainly not the one that would attract investors to the US.