 |
|
| View previous topic :: View next topic |
| Author |
The Golden Era |
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
 Posted: Tue Feb 03, 2009 10:19 am Post subject: The Golden Era |
 |
|
Gone but not forgotten:
| Quote: | A defence of shareholder value
Published: February 3 2009 09:10 | Last updated: February 3 2009 14:52
The irony is inescapable. The golden era of the shareholder value movement – the idea that businesses should be run in the interests of equityholders – has delivered one of the worst stock market performances ever. Most major markets are now below where they were 10 years ago. But while the theory of shareholder value is down, it is not out. There is no intellectually coherent alternative, certainly not managerial capitalism or touchy-feely stakeholderism.
In fact, in this post debt-bubble world, it needs to be encouraged and reinforced. In Europe alone, equity issues are expected to reach €300bn this year. Investors who help companies rebuild their debt-strained balance sheets will, of course, do so prompted by the profit motive. Yet by ensuring a company’s survival, they will also better the lot of all stakeholders. To help them do that, two main areas need reform.
The first is the age-old problem of how to achieve a better alignment of the long term interests of owners with managers. Better paid and more powerful non-executive directors are required to keep a check on executives. Pay must also move towards longer-term incentives – such as restricted share grants or bonuses that vest over several years – rather than measures that focus on short term performance. Pay at present is all too often extravagantly inflated, layered with complexity, and ludicrously out of step with what is delivered.
The second is the preferential treatment that debt enjoys. While dividends are double-taxed, first at the corporate level and then as income, interest payments are tax deductible. This will not change any time soon, but at least the gap can be narrowed. One possibility is for taxes on dividends to be tapered according to how long investments are held. This would reward loyal shareholders and encourage a genuine union of investors and companies that looked beyond share ramping and towards genuine value creation. |
| Quote: | State capitalism
Published: February 3 2009 09:11 | Last updated: February 3 2009 12:41
As the frontiers of the state again roll forward, it’s worth remembering that the man in whose name all this is done would have a clothes-peg on his nose. Keynes was a reluctant Keynesian. His genius, as biographer Robert Skidelsky diagnosed, was to develop an analysis of economic disorder which justified forms of state intervention compatible with traditional liberal values. The last of the great English Liberals, Keynes brought in the state to redress the failings of society not because he loved it, but because he saw it, in the last resort, as the saviour of capitalism from the temptations of collectivism or worse.
Free-market fundamentalists hope that the incoming tide of government interventionism will rapidly ebb, leaving markets once again to enjoy the freedoms of light tough regulation. That is wishful thinking. Sure, no government in its right mind sees the crisis as a way of legitimising a return to an out-of-date form of planned socialism run by unaccountable bureaucrats. But it is equally implausible to believe, after three decades in which advocates of unbridled laissez-faire have ruled the ideological roost and amid the worst financial crisis in two generations, that prevailing intellectual fashions will not now swing far in the opposite direction.
Staunch defenders of free markets are on the back foot. Even Alan Greenspan, a disciple of conservative philosopher Ayn Rand, has offered a mea culpa, acknowledging he had made a ”mistake” in believing that banks, operating in their own self-interest, would do what was necessary to protect their shareholders and institutions. But regulating everything to death will be no panacea. Capitalism, to paraphrase Churchill, is the worst economic system, except for all the others. Systemic breakdowns occur, but they are surprisingly rare. Free trade and deregulated markets make for a wild ride and hideous concentrations of wealth, but they remain the best means of spreading prosperity around the world we have. |
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
 |
| Author |
The Golden Era Replies |
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Fri Mar 04, 2011 6:24 pm Post subject: |
|
|
Greenspan guest-host on CNBC today (riding in on Tea Party coat-tails) and covered in many snippets therein for those who are interested.
Captial Gains are real:
http://www.cnbc.com/id/15840232?video=1828828276&play=1
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Sun Nov 07, 2010 12:59 pm Post subject: |
|
|
The same....the very very different:
Stock market regains highs
Published: November 5 2010 09:51 | Last updated: November 5 2010 16:10
| Quote: | A quick look at some key numbers suggests that not much has changed since the bankruptcy of Lehman Brothers in September 2008. On the day of the filing, the S&P 500 index dropped from 1250 to 1192. On Thursday, it closed at 1221, just about the middle of that range. The valuation is also roughly the same: 18 times trailing earnings, according to Société Générale.
A barrel of Brent oil was about $90 then, now about $87, and rising. The leading index of the US dollar’s value has declined, but by a hardly huge 3 per cent. Still, that is bigger than the change in nominal US gross domestic product, from a rate of $14.5bn in the third quarter of 2008 to $14.7bn two years later – a 1.7 per cent increase. Growth has been stronger in many other countries, but the whole world’s real GDP in 2010 is expected to be only 1.4 per cent higher than in 2008 (according to the International Monetary Fund, using market exchange rates) – or 1 per cent lower per person. |
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Fri Oct 15, 2010 8:40 pm Post subject: |
|
|
"an undesirable degree of residual uncertainty"
2003 article on the perils of securitization within the courthouse:
http://www.cfo.com/article.cfm/3009430?f=singlepage
LTV Steel quite a shot across the bow.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
|
| Posted: Sun Jun 28, 2009 1:26 pm Post subject: |
|
|
| Thanks, rffrydr. That is one of the best summaries I've seen - this short article is a must-read. It summarizes the problem very neatly without having to go into specific details such as Social Security ($9 trillion projected deficit), DB vs DC, ERISA rules, LDI, asset-liability matching, and so forth. |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Sat Jun 27, 2009 10:38 pm Post subject: |
|
|
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Sat Jun 06, 2009 8:34 am Post subject: |
|
|
Westside no longer best side:
http://www.latimes.com/news/local/la-me-westsideecon2-2009jun02,0,4956740.story?track=rss
At the bottom:
| Quote: | | Vacant storefronts on Beverly and Cañon drives in Beverly Hills are filling up, and, nearby, South Robertson Boulevard in Los Angeles is coming back, said Jay Luchs, executive vice president of CB Richard Ellis. |
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Tue May 19, 2009 7:31 am Post subject: |
|
|
http://online.wsj.com/article/SB124268209889631903.html
| Quote: | On the morning of Mr. xxx's auction, more than 100 bargain-hunters flocked to the auction tent along with dozens more bidding live online. The bids started strong, with the metal signs and animals selling. An online bidder bought the elephant head for $6,750. A bright yellow Honda motorcycle went for $9,500, and a 2003 Country Motor Coach fetched $150,000 -- far less than the $600,000 Mr. xxx paid for it or the $200,000 he owes on it.
|
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Fri May 15, 2009 11:37 pm Post subject: |
|
|
Burried at the bottom of the article:
“I’ve always argued going back many decades that you do not capitalize a piece of real estate with overnight interest rates,” the former chairman said today in response to an audience question.
Remember that guy?
Confirmation from the wizard himself: time is the achilles heel of capitalism. It's mismatch can be extreme when thrown forward over the life of the bond.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Mon Mar 30, 2009 5:09 pm Post subject: |
|
|
Never say never. Today is an historic day indeed. Water and Oil; Wall St. and GM, came together at a time and manner so unexpected yet so obvious that it threatens to become precedent. And "threatens" is the operative word.
Today the head of one of the world's great and august corporations was put before the hysterical crowd on a platter--justice delivered justice denied. Rick Wagoner may been the sacrificial lamb for america's auto industry; but, for suddenly queasy Banksters he's become the scape goat.
So grating on the ears to listen to the almost apologetic equanimites issuing from the CNBC pack. No sooner denied blood than they have to unnaturally crane their necks skyward, trying to catch the glint of that great blade that may slice down on any one of them. New York and Detroit strangely bundled in fear.
Maybe not for long....maybe forever 
[edit]: the Journal picks up the irony, http://blogs.wsj.com/marketbeat/2009/03/30/so-much-for-tough-love-futures-sink-on-gm-news/
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
Please log in to view without the ad banners |
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
Powered by phpBB
|
FAQ
Search
Memberlist
Usergroups
Statistics
Register
Profile
Log in to check your private messages
Log in
