Emerging Market Corporate Sector Debt: A Stitch in Time Could Save Billions

By Julian Chow and Shamir Tanna Much has been said lately about growing private sector debt in emerging market economies. In our recent analysis, we examined the corporate sector in a number of countries and found their rising levels of debt could make them vulnerable. Low global interest rates in the aftermath of the global financial crisis and […]

The Urge to Merge

There have been a three large deals announced recently that provide a timely opportunity to review the trend in merger and acquisitions.  The $130 bln Verizon/Vodafone deal, the $7.2 bln purchase of Molex by Koch Industries, and the $6 bln acquisition of Neiman Marcus clearly help lift the dollar value of transactions this year. According […]

A Three-Day Homestretch

Hurricane Sandy has been uppermost in everyone’s concerns.  We have the greatest sympathy for those who have lost loved ones, homes, and businesses.  The effects of weather are often devastating in any setting.  Here in the midwest, it is often a tornado that strikes with little warning.  When a hurricane hits highly-populated areas, the effects […]

The Vampire Squid Has Feelings and Obama Is No Longer Her BFF

Matt Taibbi famously dubbed Goldman “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” Taibbi knew his metaphor worked a deep injustice onVampyroteuthis infernalis, a small animal that feeds on carrion and excrement (I will let the reader explore the metaphorical possibilities).    Goldman […]

The Promise and Circumscribed Potential of Worker-Owned Businesses

While our prolonged economic downturn is concentrating power and wealth in fewer and fewer hands, it is also stimulating efforts to create more democratic business models. Today’s Financial Times highlights an increased interest in worker cooperatives, with the Basque’s Mondragon as the model. From a June article in the Guardian: MC [Mondragon Corporatio] is composed of many co-operative […]

The More You Pay, the Less You Get

Schumpeter at The Economist pointed me to a paper by Richard Cazier and John McInnis on one of my favorite topics: CEO hiring. Cazier and McInnis first confirm, not surprisingly, that pay for new, externally-hired CEOs is positively related to the past performance of their previous firms. In particular, they measure EXCESS_COMP as the difference […]

Trust Me

I mentioned in a recent blog post that a reporter had called me up to ask “what I thought about a Hong Kong-listed baby formula producer that was loading up on loans and relending the money to non-ferrous metals, tungsten, and highway companies.”  That reporter — I can now disclose — was Shai Oster from Bloomberg, who […]

Wall Street and Silicon Valley

Whenever someone criticizes “Wall Street,” someone else tries to defend Wall Street by saying that without it we wouldn’t have Silicon Valley and all of its wonders. Most recently, A.S. at Free Exchange says this: “What would Silicon Valley have been without venture capital and private equity? Apple’s spectacular growth was made possible by the capital […]

CFO Optimism Takes a Plunge, but Not a Double-Dip

Finance chiefs took a decidedly gloomy turn in September, as optimism levels and spending plans declined and hiring plans remained flat. Still, the numbers remain in positive territory and do not indicate that CFOs are retrenching due to fears of a double-dip recession. In the context of weak macroecomic numbers and concerns about Europe, finance […]

Investment Behavior and Policy Implications

Over the weekend, both Professors Barro and Mankiw wrote on investment in the New York Times. As Modeled Behavior observed, the focus on business fixed investment (BFI) or nonresidential investment was somewhat odd because BFI behavior had not been particularly anomalous in the recovery. Here, I extend upon that analysis, and draw some policy implications. […]

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