China has a number of deals going on with its people, the US and the rest of the World – and those deals are being severely tested in the latest economic downturn. First, domestically the deal is that the people tolerate a one-party systems with most of the decisions made at the top for 10%++ […]
The Bush Administration seems bound and determined to prove its incompetence right to the very end of its term. Every commentator says that President-Elect Obama has huge problems on his plate, and the Bush Team in its waning days is just adding to the shipload. Take Treasury Secretary Henry Paulson(soon please, rather than later). Here is some commentary
Public Trust, like the air we breathe, is a social commons. No one party can buy or control it. But it can be tainted, polluted, and otherwise damaged by individual and collective actions. Rod Blagojevich sits at the public service tip of the “Pay to Play” disease that is infecting all levels of US Politics
Blagojevich and Madoff: Boxing Day Gifts Read More »
Thank you sweet Louise, Story that is … at the NYTimes who has written a story which describes how lavish compensation and bonuses were at the heart of the current Financial Meltdown – aka Sub Prime Mortgage Induced Financial Disaster. Time to own up and the Times has done it first among the major Financial
In mathematics QED Quod Est Demonstrandum is used at the end of a proof. It means that which was required to be proved has now been provided for all to see. I have been arguing for the last two years that the US Financial System has gone off the rails because of unmitigated greed (I
The US is beginning to see the consequences of having a Failed State or 5 on its border with Mexico as the drug trade problems spiral out of control. Interestingly, the idea that anything can be bought is the driving force behind the drug terror in Mexico. The same attitude has come lurching on the
Political Corruption Read More »
The NYTimes has a story on the Bernard Madoff $50Billion Ponzi scheme that has wreaked havoc among the wealthy in New York this Christmas. Fittingly the story title is : For Investors, Trust Lost, and Money Too Maddof’s doing to his posh investors is but a reflection of what US Finance and Wall Street has
I have been waiting for Barrons, Business Week, Forbes, and Fortune to clarify the issue – what do the Big 3 carmakers pay their workers and what effect does this have on the overall cost of the car. The New York Times business section claims to have done it. The average is around $56/hour +
Finally, Whats in $73/hour? Read More »
LaPopessa along with Buckarooskidoo have a blog Make it Stop! Make it Stop! that is purportedly “the ramblings of [some] dangerous minds”. I beg to differ. I find it fascinating for four reasons: First, it takes on topics that from time to time the popular press needs to be coaxed into looking at in detail;
The Blog of LaPopessa and Buckarooskidoo Read More »
The NYTimes has an excellent story on the change that is coming to Wall Street, Private Equity and the Masters of the Universe dwelling there. What makes this story cogent is that these guys (primarily) are busy trying to remake themselves as smart bond/debt holders – now that easy credit for stocks and buyouts has
Private Equity Reincarnations Read More »
There is a “gaming” culture in the US Banking system that is has survived the Financial Meltdown – call it “the never give the suckers an even break” or “fiduciary trust? Why me worry?”. Unfortunately it appears to have spread across the border. And as witness I have the following unsolicited offer from Citibank from
The Bank “Gaming” Culture Read More »
Business Week is describing how the people who brought you the Financial Meltdown are now busy siphoning off Meltdown Bailout money. See here the old/new SubPrime Wolves. And this is not the only occurrence. The NYTimes cites how badly depleted the FBI has been to fight white collar crime – and despite warnings and requests
At the Root of the Financial Crisis: White Collar Crime Goes Scot-free Again Read More »
If the article at the New York Times about GM’s shaky future is right, the company faces almost the same fate whether it takes the bailout or bankruptcy root – massive restructuring as GM dwindles in size and employment to a diminished image of itself. Many of GM’s VPs and middle managers are already without
GM’s Middle Managers Plight: Ruined Brands Read More »
There is a New York Times article – no, post mortem, on Citibank that is symptomatic for what has been going on on Wall Street for the past 5 -10 years and underlies the deepness of the malaise that afflicts the US Financial System. Here is an excerpt: “Today, Citigroup, once the nation€™s largest and
Greedy Guts Bring Down Citibank …. Read More »
Frank Partnoy at the Daily Beast has written an encomium( meaning lavish praise of a person or thing) to the Five Hedge Funders that each a)had to appear before Congress this past week and b)had to bear the burden of earning at least $1billion this past year for which they paid capital gains taxes at
Hedge Fund StuporHeroes Read More »
The question that gets asked everyday and of every Tom, Dick, and Henry Blodget Financial commentator is “when will the bottom be reached “in the current rollercoastering yet consistently swooning stock markets. And without fail, the Financial commentators fill the airwaves with incredible financial mumbo jumbo that even a voodo witch doctor would not lay
Hedge Fund Redemptions Read More »
The NYTimes has a story today that Barack Obama has finally been declared the winner in North Carolina. It hardly seems to matter since Obama already has well over the needed 270 electoral votes as well as an 8 million popular vote plurality. But there is something satisfying about Obama winning in North Carolina –
Obama Wins North Carolina Read More »
The reason that stock prices continue to gyrate so much as they head down and the credit markets still are frozen – even after unprecedented action by the Fed and worldwide central banks – all is captured in a single phrase – the derivative mess. The Size of the Problem That is why I am
The Derivative Mess Read More »
The World Finance industry and especially the Wall Street Branch has been able to fend off most monitoring and regulation under the guise that a)financial institutions and markets are Darwinian effective – as long as they remain unfettered by regulations, financial markets will be transparent and efficient at reaching very risk balanced valuations of any
Finance Self Regulation Read More »
NYTimes is leading the charge in re-examining the nature and worth of the influence Alan Greenspan had on broad US Economic and Financial policy. As long serving chairman of the Federal Reserve Board, Mr. Greenspan set monetary policy as FedCharman from 1987 to 2006 under Republican and Democratic Presidents. As seen in the article Mr.
Re-examining Greenspan’s Era Read More »
There is a news item at the NYTimes that confirms in no uncertain terms what has become abundantly obvious – Wall Street will not regulate itself. Not only that but Wall Street cannot rescue itself when it gets into trouble. The whole reason the banking system is failing now is that a)no financial institution trusts
Wall Street’s Incompetencies Read More »
One would hardly know based on the coverage in the Press and on TV – Economic and Political Revolutions are taking place right before the pundits eyes and they have scarcely acknowledged them. 1)The Web as a shaper of direct governance rose significantly. The Web through blogs and business webstes a)carried the latest news of
Economic and Political Revolutions Read More »
Thanks heavens that Congress, Democratic Senator Chris Dowd and Republican SenatorRichard Shelby, have taken a whoa, wait a minute view on this bailout measure. Under the guise of an emergency, the Bush Administration is doing a Financial Iraq – let us in with no controls or otherwise the system will meltdown and there will be
Moral Hazard V – Blank Cheque Bailout ? Read More »
The day after assesments of the Wall Street Fix are not sanguine. The essence of the argument is that the government has still not done the right thing because all the derivative based bad debt has: 1)Not been identified and reported completely to the SEC+Fed by the investment banks and other bad funds holders; 2)the
The deal is not done yet, but Bernanke and Paulson (SEC Chairman Cox seems to have no credibility) appear to have sold Congress on the idea that the total US Financial System was in the throes of completely freezing up. Now taxpayers as Moral Hazard Insurance providers are on the hook for probably a sweet
The article has a tinge of shadenfreude and reads like a clever Steven Colbert rant, but the punchline is literally the lethal level of truth – see Rosa Brooks column in the LATimes here.
USA gets a letter from the World Bank Read More »
I have been arguing in this column that Executive pay has no correlation with the real risks taken. And measured against the real life or death decisions made by doctors, service men, captains of ships both air and nautical – CEO’s pay vis a vis their performance seems to be great outliers – almost ridiculous
It appeared that with the refusal of FedAid to Lehman and the shotgun wedding of Merrill to Bank of Captain America, Treasury Secretary Paulson had closed the Moral Hazard Insurance window for your friendly Investment Bankers-only service. But I demurred here. And sure enough, two days later, the Moral Hazard Insurance window is open again
Two days ago I raised the question of whether US Secretary Paulson and the Treasury would be able to stop Wall Streets run on the Moral Hazard Insurance Company – that is as Paul Krugman of the New York Time’s calls it: “[Federal] officials are worried that their rescue efforts will encourage even more risky
The Moral Hazard Denoument Read More »
I have been arguing here that there is a Capital Investment Crisis in the US because organizations and especially private equity firms are routing investments to self-aggrandizing, sure-thing takeovers which add nothing new to the economy except old line companies stripped of personnel, debt capacity, and no financial ability to adapt a long term innovation
Innovation Investments Trickling Down … Read More »
There have been some interesting business news items recently. In the Thursday, August 14th Financial Post, there is a story by Barbra Shecter on the state of securities disclosure by Canadian businesses. Even in the polite etiquette and language of regulation, the Canadian Securities Administration declared that “significant deficiencies were found in the disclosures made
The Problem with Business Ethics Shortfalls Read More »
I have promised to feature some venture capitalists who are taking real risks and creating new jobs and businesses. This is in stark contrast to private equity and hedge funders who are playing Ponzi games or, given cheap capital, making sure thing leveraged buyouts of marginal beneficial impact to the economy. My first choice is
Venture Capitalist: Vinod Khosla Read More »
