I asked one investment banker what might cause half of North America’s top corporations to default. No ordinary economic recession or natural disaster short of an asteroid strike could do it: no hurricane, for example, and not even ‘the big one’, a catastrophic earthquake devastating California. All he could think of was ‘a revolutionary Marxist [...]
Insurers to Banks: Swap Guarantees for Nothing
Let’s say you file a claim with the insurance company after a disaster. Instead of getting a check, the insurance company tells you that it would prefer NOT to pay the claim since that would put the insurance company in a precarious financial position. What would your reaction be? Some banks are confronting a similar [...]
“Should Analysts Who Don’t Own Stocks Be Trusted?”
Remove the part about “Who Don’t Own Stock” and you’ve got a legit story. Another silly rule designed to prevent conflicts makes analyst guesses less trustworthy. You’ve almost certainly seen it: Every time an analyst on CNBC comes on to talk about a stock there is The Screen. We find out whether they own the [...]
“The Criminalization of Failure”
Great John Carney post at Dealbreaker.com. The cure is worse than the problem: “Of course what’s really happening here is that the hedge fund managers are taking the fall for the collapse of Bear, and the even broader reverberations from that, including the controversial merger, the bailout and the credit markets’ woe,” law professor Larry [...]
Protectionism for Profit – Now Doctors get in on the Racket
How can doctors get fat off the tax payer if the tax payer has a choice? MD lobbyists are preemptively shoring up their bottom line under the guise of safety. Add this to the existing list of readymade excuses to steal from the tax payer whose greatest hits already include, “it’s for the children,” and [...]
“Ever wonder why fund managers can’t beat the S&P 500? “
The headline quote from Gordon Gekko from the 1987 movie Wall Street show this has been common knowledge for decades: Fund managers cannot beat the index after fees. According to this Bloomberg article, consumers are finally starting to catch on: When Fidelity Investments opened the Magellan Fund in January to new shareholders for the first [...]
Oil Up Again
Previously a $5 move would be front page news. Now it’s just to be expected: Crude oil for July delivery rose $5.07, or 3.9 percent, to settle at $136.38 a barrel at 2:48 p.m. on the New York Mercantile Exchange. Oil reached a record $139.12 a barrel on June 6. Futures have doubled in 12 [...]
China > USA
From Whiskey & Gunpowder: China added more to global economic growth in 2007 than the U.S. That’s the first time a country other than the U.S. has contributed more to global GDP since at least the 1930s. This little history-making milestone typifies a growing list of Chinese economic achievements… and American shortcomings. “On issue after [...]
“House prices are falling even faster than during the Great Depression”
The Economist puts up the sentence (headline) and the chart of the day in this article on housing prices. Unfortunately, new figures this week reveal that house prices have already fallen by more over the past 12 months than in any year during the Great Depression. The S&P/Case-Shiller national index fell by 14.1% in the [...]
The Bear Collapse – WSJ’s Incredible Reporting
Outside of Fortune, very few publications write good business stories. The Wall Street Journal has interesting articles and does good reporting, but rarely writes about the internal drama of Wall Street in such a readable way. It’s like something Bethany McLean or Kurt Eichenwald would have written. Part 3 will be out tomorrow. Read part [...]
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