The federal pay czar, Kenneth Feinberg, would be right to reject requests for big bonuses at banks feeding from the public trough.....
Mr. Feinberg must object to gargantuan payouts from banks that would be bankrupt
if not for taxpayers’ money. He should not be deterred by banks’ arguments that they will lose superstars and compromise profitability if they can’t pay lavishly.
The superstars caused the problem with financial wizardry they did not fully understand...
Most broadly, Mr. Feinberg must devise a structure to dissuade bankers from blowing up the economy again. In principle, one would like to see firms pay executives as they saw fit. But banks are different. They gamble with ordinary people’s money. They have proved they can do it extremely destructively.
Bankers’ remuneration was among the main factors behind this destructive behavior, encouraging them to take on dubious bets that provided big short-term returns at the expense of their institutions’ and the economy’s future stability...
http://www.nytimes.com/2009/08/03/opinion/03mon3.html
Sunday, August 2, 2009
NYTimes: Rewarding Bad Actors ( Who Make Us Poorer )
Americans are angry at Wall Street, and rightly so....
But crashing the economy and fleecing the taxpayer aren’t Wall Street’s only sins. Even before the crisis and the bailouts, many financial-industry high-fliers made fortunes through activities that were worthless if not destructive from a social point of view.
And they’re still at it. Consider two recent news stories....
Just to be clear: financial speculation can serve a useful purpose.... But speculation based on information not available to the public at large is a very different matter....
.... we’ve become a society in which the big bucks go to bad actors, a society that lavishly rewards those who make us poorer.
http://www.nytimes.com/2009/08/03/opinion/03krugman.html
http://en.wikipedia.org/wiki/Paul_Krugman
But crashing the economy and fleecing the taxpayer aren’t Wall Street’s only sins. Even before the crisis and the bailouts, many financial-industry high-fliers made fortunes through activities that were worthless if not destructive from a social point of view.
And they’re still at it. Consider two recent news stories....
Just to be clear: financial speculation can serve a useful purpose.... But speculation based on information not available to the public at large is a very different matter....
.... we’ve become a society in which the big bucks go to bad actors, a society that lavishly rewards those who make us poorer.
http://www.nytimes.com/2009/08/03/opinion/03krugman.html
http://en.wikipedia.org/wiki/Paul_Krugman
European CityMobile and CyCab
There is an exciting project involving an automated (i.e. driverless taxi) to provide local transport. Read my blog here.
I have been writing on this matter for a few months, but I learned yesterday that the people in Europe had been working on the same idea much earlier.
I have been writing on this matter for a few months, but I learned yesterday that the people in Europe had been working on the same idea much earlier.
Prudential Yield 15/20
Someone posted a comment that the Prudential 15/20 is similar to the Great Link Choice. Can policyholders of this product give feedback on:
a) The structure of the product
b) Does it guarantee against the failure of a certain number of CDOs
c) What is the current value of the various tranches of this product?
a) The structure of the product
b) Does it guarantee against the failure of a certain number of CDOs
c) What is the current value of the various tranches of this product?
Saturday, August 1, 2009
NYT: Auction rate securities
The debacle hit individual investors especially hard.
When state regulators investigated the circumstances surrounding auction-rate failures, they found that some of the firms selling the securities had turned their aggressive sales pitches on small investors even when astute institutional buyers had already seen trouble and stopped buying.
Regulators have since forced many brokerage firms that underwrote or sold the securities to buy back their clients’ holdings.
Eight large and small firms have already settled, or agreed to settle, auction-rate cases with the Securities and Exchange Commission.
http://www.nytimes.com/2009/08/02/business/02gret.html?ref=business
When state regulators investigated the circumstances surrounding auction-rate failures, they found that some of the firms selling the securities had turned their aggressive sales pitches on small investors even when astute institutional buyers had already seen trouble and stopped buying.
Regulators have since forced many brokerage firms that underwrote or sold the securities to buy back their clients’ holdings.
Eight large and small firms have already settled, or agreed to settle, auction-rate cases with the Securities and Exchange Commission.
http://www.nytimes.com/2009/08/02/business/02gret.html?ref=business
Re-build the trust in the integrity and reputation of Singapore
I call on the banks and stockborking firms who are involved in selling the credit-linked notes in Singapore and Hong Kong to offer the same compensation to investors in Singapore that they offer to those in Hong Kong. The compensation is 60% to 70% of the invested sum, and any excess, if the proceeds on maturity exceed the amount of the compensation.
Do act early, to protect your repuation. Equally importantly, your action will rebuild the trust in the integrity and reputation of the the financial system in Singapore in providing honest dealing and fair treatment of customers. This will enhance the role of Singapore as a trusted financial hub of the region.
Tan Kin Lian
Do act early, to protect your repuation. Equally importantly, your action will rebuild the trust in the integrity and reputation of the the financial system in Singapore in providing honest dealing and fair treatment of customers. This will enhance the role of Singapore as a trusted financial hub of the region.
Tan Kin Lian
Major US financial regulation initiatives
Read this report in Reuters.
I am impressed with the fast and appropriate action taken by the Obama Administration in addressing the failure of the financial market in USA. I believe that the measures are necessary and will be helpful in creating a fairer and better financial system.
This is an example of what can be achieved under a free, democratic system that draws on the best brains from all sides and respect the views and contributions of many people.
I am impressed with the fast and appropriate action taken by the Obama Administration in addressing the failure of the financial market in USA. I believe that the measures are necessary and will be helpful in creating a fairer and better financial system.
This is an example of what can be achieved under a free, democratic system that draws on the best brains from all sides and respect the views and contributions of many people.
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