“A culture of dangerous greed and excessive risk-taking has taken root in the banking world,” said Senator McCain last week. Senator Warren told Wall Street, where failure has been rewarded with bailouts and record bonuses, that “Banking should be boring.” They were pitching the “21st Century Glass-Steagall Act.” Wall Street must have gotten the willies.
Monthly Archives: July 2013
What Gloomy CEOs See That Giddy Retail Investors Don’t
by Wolf Richter • • Comments Off on What Gloomy CEOs See That Giddy Retail Investors Don’t
CEOs have, in these crazy days of ours, one primary job, it seems: manipulating up the stock of their company. Few master this delicate art like Tesla Motors CEO Elon Musk, who took his highflyer into the stratosphere on a wing and a prayer. But why are executives worldwide wallowing behind the scenes in 2009-like gloom about the economy’s future?
Big Pharma’s Lurid Tactics Under Fire In China – And In The US
by Wolf Richter • • Comments Off on Big Pharma’s Lurid Tactics Under Fire In China – And In The US
At first, it was just multinational drugmaker GlaxoSmithKline that allegedly paid bribes in China, including “sexual bribes,” to “government officials, medical associations, hospitals and doctors,” by using travel agencies as conduit. For a total of $489 million. Now more big drugmakers are on the hot seat for the same crimes in China – and in the US.
Just How Low Can Spain Go?
by Don Quijones • • Comments Off on Just How Low Can Spain Go?
BBC’s article about the political funding scandal gripping Spain featured a photo of hapless leader Mariano Rajoy licking his lips like a “dirty old man.” It spread like wildfire across the social media, setting off a cacophony of calls for Rajoy to resign for the irreparable damage he’d done to Spain’s overseas image.
David Stockman: Financial Engineering As The ATM Of The Prosperous Classes
by David Stockman • • Comments Off on David Stockman: Financial Engineering As The ATM Of The Prosperous Classes
Unlike mortgage equity withdrawal by households, where the cash windfall was distributed across the middle class, corporate equity withdrawal through buybacks, buyouts, and takeovers resulted in cash distributions to the very top of the economic ladder. Financial engineering: the ATM of the prosperous classes!
Mother Of All Bubbles Pops, Mess Ensues
by Wolf Richter • • Comments Off on Mother Of All Bubbles Pops, Mess Ensues
The asset bubbles the Fed’s money-printing and bond-buying binge has created are spectacular, the risk-taking on Wall Street with other people’s money a sight to behold. Big winners were mortgage Real Estate Investment Trusts – and those who got fat on extracting fees. But now the pendulum is swinging back, and the bloodletting has started.
Austrian Steelmaker Offshores Production To … Texas
by Wolf Richter • • Comments Off on Austrian Steelmaker Offshores Production To … Texas
Voestalpine, an Austrian steelmaker with 46,000 employees, saw its revenues decline by 4% last year. It blamed the “cooling down of the global economy,” and “dwindling momentum in Asia (especially China).” Now it’s under pressure to cut costs. Hence offshoring to cheap countries! China or Indonesia? Nope.
Blinded By Optimism, German Economy Now Below Stall Speed
by Wolf Richter • • Comments Off on Blinded By Optimism, German Economy Now Below Stall Speed
The financial crisis was brutal for Germany, but the recovery steep, and in 2011, the gloating started. They called it the German “success recipe,” a superior system that would keep the economy growing even amidst Eurozone debt-crisis mayhem. That optimism has endured, and stocks have hit new highs, but the economy has diverged sharply.
David Stockman: Bubble Finance Personified
by David Stockman • • Comments Off on David Stockman: Bubble Finance Personified
“The Fed should have been embarrassed by the M&A frenzy,” writes David Stockman. Tyco CEO Dennis Kozlowski, Wall Street’s favorite deal maker, put “the rest of the corporate deal junkies to shame.” But “the poster boy for Greenspan’s first stock market bubble and its sudden, violent demise was a wake-up call that was wholly ignored.”
(Broke) Italy “Would Love To” But Can’t Pay Its Bills This Year
by Wolf Richter • • Comments Off on (Broke) Italy “Would Love To” But Can’t Pay Its Bills This Year
In most countries, it would be an act of mind-bending chutzpah, or perhaps a display of political insanity, but in Italy it barely made ripples: for a government official, a minister no less, to declare that the country cannot pay its long overdue bills, and not for a month or two, but for the rest of this year! Due to “technical” problems.