When I was a young aspiring middle manager in finance, I reported to a senior executive who used to ask me for "spitballs for the board"...essemtially succinct statements about the state of the various businesses which he could use at the BOD meetings. It was to be the businessmen's one liner in response to " so, Ed what's new? ". The expression has stuck with me for nearly 40 years. So, lets look at some spitballs on various timely topics as a bridge to Dad's blog next topic.
The US is one of only four large OECD countries that brings under its tax umbrella [so called worldwide system] citizens and firms living and operating abroad. This year Britian and Japan have joined everyone else with a territorial system.. Are we our own worst enemy?
$300billion plus of the AIG alphahets [CDO, CDCCs] recently bailed out by US tax payers were for European banks, the US legal entities of foreign banks were helped by the US stimulus. Yet, Germany and France in particular play beggar thy neighbor with their stimulus plans. Did you know that youghurt making is a strategic industry in France? No foreigners may pursue acquiring Danone.
Germany and China made things and US consumers bought them on credit...is this over?
"The financial crises was a US creation" yet, Deutche Bank's debt is equal to 80% of Germany's GDP and Barclay Bank debt exceeds Great Britain's GDP.
Hedge funds and private equity are in athema in France and Germany yet bear little [if any] responsibility for the crises. Is the "European" approach to global financial regulation based more on a "not invented here" "not understood here" attitude than saving the planet?
Should we have a Tobin tax? Should we have "salary caps" on bankers or limits on bonuses including extended time frames for equity vesting and clawbacks?
Intergalactic financial regulations are being called for; are they desirable, are they needed...why should the US and UK have the same regulations as France and Germany ? The economies are quite different as are their political and social frame works.
How can the US expect cooperation from the rest of the world on "free trade" when the President puts a 35% tarriff on tire imports from China that wasnt even supported by the US tire industry? It was however greeted enthusiastically by the steelworkers union who are involved in tire making. Hmmm! And don't foget the buy America provisions in other legislation.
China is poised to take a leading voice in the UN's climate change discussions. Regardless of the practicality or reality of China's emissions proposals, is this a preface to China's taking a leadership position on other matters that suit its purpose? e.g. replacing the $ as the reserve currency
Banking used to be a boring business and none was too big to fail; investment banking was done through partnerships. Should they be again?
partnerships do seem to change the risk perceptions. anything to force management to take a longer term perspective would work.
ReplyDeletewhether the solution is holding bonuses in reserve for clawbacks, or handing out locked up stock, I think its clear the compensation of a banking executive shouldnt be even more short term than a silicon valley startup CTO.
Of course the shareholders are so distributed there is no one left to care but the government and the taxpayer, standing there holding the bag.
matt