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$$$ Henry Paulson: ‘Now Is the Time for Action on Debt Ceiling, Deficit’ (WSJ)
$$$ ECB’s Trichet confident Greek crisis a one-off (Reuters)
$$$ Fitch to put Greece into ‘restricted’ default (Guardian)
$$$ “A Harlem financial consultant wants JetBlue to pay for booting her off a Florida-bound flight after an airline worker accused her of not wearing panties.” (NYDN) Continue reading »
On May 11, 1979, commodities trader and “family man” Arthur Gerald Jones went missing. His wife told investigators that six months prior, he’d lost his job, and due to the fact that despite selling his CBOT seat and forging her name on an application for a second mortgage, Jones still had a bunch of gambling debt to pay off, possibly to the mob, foul play was suspected, and he was eventually declared dead in 1986. This would be sad if not for the fact that AGJ has actually been living and working (as a bookie, natch, and apparently also on his tan) in Las Vegas for the last 23 years. Continue reading »
Proponents of raising the debt ceiling claim that a default on Aug. 2 is unprecedented and will result in calamity (never mind that this is simply an arbitrary date, easily changed, marking a congressional recess). My expectations of such a scenario are more sanguine. … Despite the defaults in 1934, 1968 and 1971,* world markets have been only too willing to purchase Treasury debt and thereby fund the government’s deficit spending. If these major defaults didn’t result in decreased investor appetite for U.S. obligations, I see no reason why defaulting on a small amount of debt this August would cause any major changes.
Default Now, or Suffer a More Expensive Crisis Later: Ron Paul [Bloomberg]
* For “defaults” read “moves away from the gold standard.”
A nice thing about being a director of a U.S. public company is that, if you’re nominated for re-election, you can’t lose. Not, like, “incumbents have an advantage”: you actually can’t lose, and as long as one share votes for you you’ll be re-elected even if everyone else votes against you. (That’s been changing a bit but still largely true.) You might not get re-nominated, say if you insider trade or just piss off Ken Griffin, but once the board nominates you you’re pretty much set.
The only way to get actually voted out is if a shareholder mounts a proxy contest, mailing proxy cards to all other shareholders to try to get their own nominees elected. That’s expensive enough that it normally only happens in hostile M&A situations, or when boards are really exceptionally screwing up.
The SEC has been trying for some time to put in place a “proxy access” rule, which would allow shareholders to nominate director candidates on the company’s proxy card, without going to the expense of a proxy fight. Companies are less jazzed about this. So they’ve sued, again and again, to stop the SEC, and so far they’ve succeeded.
Today they won again, as the D.C. Circuit today struck down the latest SEC proxy access rule, saying:
Continue reading »
Are you in the financial sector, overworked, and worried about layoffs? Are you willing to relocate for the right job? Are you aware that there’s a market where prospects are good for job growth, you won’t have to work too hard, and they’re more relaxed on age-of-consent issues than in Greenwich? It’s called Cambodia and it’s calling your name. Continue reading »
For starters, they’d like to see a management shakeup. Continue reading »
Earlier this week, an incensed Goldman Sachs employee informed us of a new development at 200 West that was causing great civil unrest. “They replaced the regular sized (8 oz?) with tiny little cups (5oz?),” he wrote, steaming. “Last week the cappuccino machine wasn’t filling my cup and I was wondering why. Now I know, the machine is filling the tiny cups!” Not about to take the TLC situation sitting down, he of course had a plan. “I guess now I will just have to get two cups of coffee at once.” While he was surely dead serious about making good on his threat, there is no longer a need to double up. Continue reading »
JPMorgan equity strategist Thomas Lee put out a glass-half-full note yesterday titled “Corporates are the new “sovereigns”: 22 stocks to own around sovereign default.” Apparently there are a lot of companies who have their shit together more than Congress does:
Over the past year, an increasing share of US corporates are seen as having LOWER default risk than the US government. … As of yesterday, 22% of US high-grade issuers (from the J.P. Morgan JULI index of 250 issuers) have a CDS spread inside that of the US government. This is up from zero a year ago. … Note the composition of CDS spreads by industry. 42% of US industrials have a CDS spread inside the US govt, as do 38% of Healthcare companies.
If you answered yes, today’s your lucky day. Continue reading »
A year after the passage of the Dodd-Frank Act, graphic designers continue to find new ways to explain how confusing it is and how little progress there’s been on some of the rulemaking to implement it. According to Barney Frank, that notion could not be further from the truth. Speaking with Dealbook about the legislation, the Congressman cleared up a few other misconceptions, like the idea that Congress “punted” the most important regulatory decisions to the SEC and CFTC.
Frank: We didn’t punt anything. You can’t do these things without setting general rules. I mean, if the question is, should we have said specifically – first of all, there are two problems if you did things specifically. On the one hand, you get people to get around it. If you are very specific about what you have banned, I guarantee you these people will find other ways. You have to have more general such rules.
Or that the agencies are at all to blame for delays in rulemaking: Continue reading »
