Some have taken notice that investment banks are much more cavalier with other people’s money that they are with their own dough. We’ve gone further in earlier posts, saying that investment banks shouldn’t be public companies (scroll towards the end). A Bloomberg article points out the obvious: the Street has sustained losses unimaginable in the […]
Read more...Martin Wolf’s current comment is great fun. He makes a recommendation which is logical and well argued but so contrary to the prevailing orthodoxy that it is sure to elicit a lot of ire. And I guarantee it will be misconstrued as well. Wolf notes that banks (and we can include investment banks) have succeeded […]
Read more...The Wall Street Journal broke the story that Bear Stearns’ 74 year old chairman James Cayne has told board members he will give up his CEO role but stay on as chairman. 57-year old president and investment banker Alan Schwartz is expected to assume the CEO post. I complained back in November that the Wall […]
Read more...UBS is getting heat on multiple front on the planned investment of $11.5 billion, the bulk of which comes from the Singapore Investment Corporation, and the remainder from a secretive Middle Eastern investor. Initially, this development seemed like a coup, for the Swiss bank announced further writeoffs seen as deep enough to take it through […]
Read more...Yet another cash infusion for an investment bank suffering losses by the Chinese (the first was Bear Stearns). China state-controlled China Investment Corp, is buying securities that offer a current yield of 9% and convert into as much as 9.9% of the firm. However, the investment fund will receive no board seat or management role. […]
Read more...You can fault Bear on other fronts, but the firm has an executive compensation plan that – hold your breath – requires that top brass get no bonuses if the firm misses its ROE targets. Even though the top executives could have received small bonuses this year, the Wall Street Journal reports they decided to […]
Read more...A story highlighted on the first page of the Wall Street Journal and slotted to appear on page A3, “Fidelity Succession Plan Weighs Splitting Chairman, CEO Posts,” has the earmarks of being a PR plant by the Boston-based company. And the Journal appears to have featured it as served up in return for getting the […]
Read more...This is a great post, “Why Market Leaders Don’t Listen to Investment Bankers,” by Charles Green at HuffPo. The set-up for this story is why it isn’t so dumb for companies to keep a lot of supposedly unproductive cash on hand. You can make similar argument for why companies shouldn’t divest their cash cows. A […]
Read more...The New York Times has an odd piece today, “Where Did the Buck Stop at Merrill?” which seeks to determine whether the unexpectedly $8.4 billion third-quarter writeoff was not just former CEO Stanley O”Neal’s failing, but also one of Merrill’s board. Another shoe may be about to drop, since the Wall Street Journal claimed that […]
Read more...A piece in Seeking Alpha, “Buybacks: A Wolf In Sheep’s Clothing,” by Matthew Hougan at Index Universe, does a nice job of debunking the myth that stock buybacks are a positive indicator for price performance. I’ve always had trouble with the logic of buybacks. If a company doesn’t believe that it has attractive enough prospects […]
Read more...The Financial Times reports today that institutional investors and the SEC are taking interest in the difficult-to-justify pay disparities between the CEO and his immediate subordinates at some public companies. And isolated data points, like Sallie Mae, suggest that the ones with the biggest gulf (in its case, ten times) aren’t delivering commensurate performance. A […]
Read more...Psychologists, when working with patients, need to differentiate between two types of people: internalizers and externalizers. Internalizers are very responsible and tend to blame themselves for Things That Happen, whether they are their fault or not. They fit well in jobs that demand professionalism and personal responsibility. By contrast, externalizers blame everyone else for their […]
Read more...Ah, time for a reality check on the Wall Street Journal/Administration party line. Here we’ve been told how horrible Sarbanes-Oxley is, and how those tough corporate governance measures are bad for the competitiveness of US markets. Like many of the things the officialdom in Washington has been telling the public, this line of reasoning doesn’t […]
Read more...Robert Reich tells us that despite the talk about moral hazard, the rich have plenty of safety nets: The real moral hazard in this saga started when Fed Chair Ben Bernanke cut the Fed’s discount rate (charged on direct federal loans to banks) and announced that the Fed would take whatever action was needed to […]
Read more...Will someone, please, teach the reporters at the Wall Street Journal the basics about scientific research? I know it’s hard finding stuff to write about day in, day out. But the story “Scholars Link Success of Firms To Lives of CEOs” is a travesty. The centerpiece of the article is a study by Morten Bennedsen, […]
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