Desiderata
Shit, Bull Shit, Horse Shit and More Shit – Those were the tabs on my brother’s notebook in college, and they really capture the essence of the Chief Magistrate’s <a href=”http://finance.yahoo.com/news/WH-warns-tax-defeat-could-apf-3072595197.html?x=0&sec=topStories&pos=main&asset=&ccode=”>most recent threats</a> about tax cuts. This isn’t an explicitly political blog, so put the politics aside for a moment. The assertion by gas-bag-extraordinaire Larry Summers that not going along with the tax cuts threatens the economy is possibly the most ridiculous, groundless and unsupportable piece of hucksterism you’ll ever see. Factually speaking, something these clowns don’t like, tax cuts have a history of not helping the economy. If I were a democrat, I would be pissed.
Sued for Paying Too Much – Morgan Stanley was actually sued last year by its largest shareholders for spending too much on compensation. So, this year they’re going to <a href=”http://dealbook.nytimes.com/2010/12/08/morgan-stanley-looks-to-rein-in-executive-pay/?ref=business”>back it down to the 50%</a> range. This will end very badly in one of two ways: 1) Gorman will be canned; or 2) lots of other people will get canned. Hmmmm, I’m going with option #2.
Bond Market Not Impressed – I realize the purpose of this blog is to decode what’s written in the business press, and nowhere is that more helpful than the bond market. The yields on bonds are going up (which means prices are going down) as a result of the recent tax plan. Why? The people in the bond market – generally a hard headed group – think <a href=”http://www.nytimes.com/2010/12/09/business/economy/09place.html?_r=1&ref=business”>the tax and unemployment deal is insanity</a> because it will cause the budget deficit to continue to grow, and cause more trouble than the money staying in peoples’ pockets will cure. Makes the completely stupid comments from Larry Summers seem even more stupid.
UNIONS BAD (to be read in a Cave Man Voice) – You hear it all the time, right? Unions are against free trade and just want to protect their jobs at any cost (how the desire to protect your job ever became a bad thing is a master work of business propaganda). Well two of the biggest unions left are all in favor of the <a href=”http://www.nytimes.com/2010/12/09/business/global/09trade.html?ref=business”>proposed free trade deal with Korea</a>. It’s not too hard to understand why. In this case, the US auto market has already been opened completely to Korean cars, while the Korean market has been completely shut off to our exports. There’s nowhere to go but up.
Can They Really Do That?!?! – I’ll be you a dollar you didn’t know about this. There are people who do nothing but buy obscure patents, sue companies for allegedly using them without proper licensing agreement, and threaten to shut them down if they don’t pay big fees. It’s blackmail, of course, but since it’s done by the monied class, they don’t call it that. What they do is dress it up as a venture fund and raise billions of dollars from some of the most highly respected investors in the country. Not an ethical way to go, but as Daffy Duck once said, “eh, it’s a living.” In a great column, Nathan Vardi lays it out pretty clearly. By the way, Nathan Myhrvold used to be one of the highest ranking people at Microsoft. Once a predator, always a predator.
Business Decoder 