Hey, Germany: You Got a Bailout, Too Illustration by Bloomberg View By the Editors 2012-05-23T23:00:00Z In the millions of words written about Europe’s debt crisis, Germany is typically cast as the responsible adult and Greece as the profligate child. Prudent Germany, the narrative goes, is loath to bail out freeloading Greece, which borrowed more than it could afford and now must suffer the consequences. Would it surprise you to know that Europe’s taxpayers have provided as much financial support to Germany as they have to Greece? An examination of European money flows and central-bank balance sheets suggests this is so. Let’s begin with the observation that irresponsible borrowers can’t exist without irresponsible lenders. Germany’s banks were Greece’s enablers. Thanks partly to lax regulation, German banks ... Continue reading →
Lately, I have been thinking about exactly what it is that modern banking has evolved into. It is no longer about safety and security, instead focusing on speculation and trading. It has become impervious to the normal political process; it has consolidated to the point of being anti-competitive, with an enormous size advantage held by the top 10 banks versus smaller and/or non depository competitors. Then, the solution dawned on me – all it would take is the right person (with the support of their board) sending a simple letter. I slipped off to the near future, and grabbed a copy of a fascinating letter. It ended Too Big to Fail, eliminated taxpayer liability for reckless speculation, freed Hedge funds and investment banks from onerous ... Continue reading →
Every day, Michelle Leder and the crew at Footnoted.com scour Securities and Exchange Commission filings for highlights and lowlights in executive compensation. Once a month, she joins us to discuss some of their top finds. As we discuss in the accompanying video, April showered a host of benefits on executives at a couple of companies that are making repeat appearances in our monthly round-up. Pension Prescription at Medicis. Time was, pensions were an instrument designed to ensure that comparatively low-paid rank-and-file workers at large companies could enjoy a dignified retirement. But that was last century. Today, as many companies reduce or cut pensions entirely in favor of defined contribution plans like 401(K)s, other firms are boosting pension plans for top executives. Take Medicis. The pharmaceutical ... Continue reading →
You may have heard (or, perhaps read) about a company called Facebook (FB), which is going public today. For weeks now, there’s been a steady drumbeat of stories, and an even steadier drumbeat of filings. The most recent S-1, with the pricing details, was filed on Tuesday morning, making it the 8th version of the document. We’ll let others focus on the blow-by-blow today. Our friends at both the New York Times’ DealBook and the WSJ are both live blogging today’s events (see here and here respectively). What we found more interesting was the rash of insider trading-related forms filed late yesterday. We counted 39, which was significantly higher than those filed by Google (GOOG) insiders prior to its IPO in August 2004. Four of ... Continue reading →
Image: Illustration by Brian Taylor We the People of the United States, in Order to form a more perfect Lifestyle, establish Fairness, ensure blood pressure Tranquility, provide for the common Text Messager, promote less Outrage and secure Cell phone Service that’s anywhere near as good as it is in Other Countries, do ordain and establish this Cellular Bill of Rights. Article 1. The Subsidy Repayment must end Sometime. The carriers (Verizon, AT&T, T-Mobile, Sprint) provide to us very inexpensive phones. We love getting a $650 iPhone 4S for $200! But we get that handsome price only when we agree to a two-year contract. In other words, we’re paying off the real price over two years of payments. The carriers are subsidizing the phones. Which is ... Continue reading →
