Is this an industry scare tactic to prevent unwanted regulation, or a real threat?Now Congress is moving to limit the penalties on riskier [credit card] borrowers, who have become a prime source of billions of dollars in fee revenue for the industry.
Singh His Praises: India's Congress Party, headed by economist Manmohan Singh, pulled off a major victory over the weekend. Pundits took it as a mandate for economic reforms, and a surprising win for the ruling party in a country that loves to kick its leaders to the curb after one term.
Silicon Valley is full of imperial visionaries whose mission is to take down Google, which now controls about 64 percent of the search market worldwide. They range from Microsoft to newcomers like Cuil, but all of them have ended up merely battling one another on the outskirts of Google's dominion, fighting for the shrinking number of searches that Google hasn't yet figured out how to conquer.Then there is physicist Stephen Wolfram.
Every good businessperson has a favored statistic about China. I remember meeting the son of a vineyard owner in Napa Valley, who was helping his parents take their modest business global. "Think about it," he told me. "If we sold a bottle of wine to every Chinese millionaire, we'd run out of wine before we ran out of millionaires!"I haven't kept in touch with the oenophile, so I don't know how his well-laid plans played out, but Dan Gross has been keeping tabs on how some major American brands...
Welcome to Shangkong: A year or two ago, New York and London battled each other to be crowned seat of global finance. But, writing in the Financial Times, Yale professor (and regular Newsweek International contributor) Jeffrey Garten argues that, "once the global recovery begins, New York and London might be vying less with one another than with a new competitor in the form of a partnership between Hong Kong and Shanghai – call it 'Shangkong' – a highly consequential shift of financial...
Everybody is talking about last weekend's Saturday Night Live skit with Justin Timberlake and Andy Samberg singing "Motherlover," but for you econophiles out there, you might want to skip the pop-comic songfest in favor of the "Geithner Cold Open." "Initially, my department had planned to give each bank a numerical grade of one to 100.
Stress-Free Friday: A stress test wrap-up from the NYT. On Your Marx...: Venezuela's Hugo Chavez responds to the recession by nationalizing the docks and boats owned by oil-services companies like Halliburton and Schlumberger.Gold Bugs Beware: All the bears are screaming "Buy gold!" to hedge against inflation, but check this interactive graphic on the history of gold prices first.
Levantine doomsayer Nassim Nicholas Taleb, author of "The Black Swan," has been everywhere lately, appearing on a Planet Money podcast last week and then this morning at the New Yorker Summit. (He also co-authored a new research paper.) The upshot of his latest message is extreme: ban debt.Taleb claims that debt is a risk-enabler.
Obama declared war on corporate tax evaders today, unveiling a plan that will make it harder for companies to hide money offshore indefinitely and, in so doing, raise an extra $103.1 billion over 10 years (according to the Administration's math, at least). (For background, check here.)The response from corporate America was predictable.
Another One Bites the Dust: The federal government put Chrysler into bankruptcy protection yesterday, and the New York Times argues that "if the process is prolonged, the costs and complexity would likely ensure that the company would never emerge from bankruptcy proceedings." Obama blamed "a small group of speculators" who "were hoping that everybody else would make sacrifices and they would have to make none," he said. (John Gapper defends the hedge funds and "speculators" here.) The new,...
Stripped: During a shareholder meeting that at times seemed more like a circus, investors voted to strip Ken Lewis of his chairmanship of the board. The embattled financier will remain CEO of the company -- for now, at least."You Sneeze, You Go Home": That's the rule at Mexico City brokerages, where stock traders slip on face masks in between client phone calls.
It's a sign of exactly how complicated our current situation is that even as straightforward a task as tallying how much money the U.S. government has spent so far on bailouts is nearly impossible.
As oil shot up to $150 a barrel last year, venture capitalists (VCs) poured money into clean technologies like NASA-caliber fuel cells, on the belief that their costly, sci-fi-inspired advances would remain competitive even if oil fell to $50 a barrel.
Sinking...Like a Rock: The auto industry's woes continue. Chrysler will likely file for bankruptcy next week. Meanwhile, Ford lost $1.4 billion last quarter, on top of a $14.6 billion loss in 2008, but says it still won't need a government bailout.What's His Motivation?: A Madoff movie is already in the works.
You've got to hand it to Jim Owens, the CEO of Caterpillar -- he knows how to craft a provocative sentence. Like this one, for instance: "I'd rather be President Hu than President Obama." That's what he told a gathering of the Council on Foreign Relations in Washington, DC today. (Hat tip to Real Time Economics.)The reason he'd prefer a seat of power in Beijing over Washington right now is that the task for China's leaders is to encourage consumer spending, telling their citizens, in effect, to...
Today in encouraging news: Obama has called credit card CEOs to the White House. They'll meet on Thursday and, according to McClatchy, Obama will "stress the need for greater clarity in the way that credit cards are marketed and administered."This of course is a preliminary step in reining in shoddy lending practices, which extended not just to mortgages but credit cards and other consumer loans.
Is financial innovation good for society? In a speech last week, Federal Reserve Chairman Ben Bernanke gave a qualified yes. Financial innovation really picked up after 1980, and "I don't think anyone wants to go back to the 1970s," he said.Ryan Avent, the new blogger-in-chief over at Portfolio's Market Movers, thought that statement rather funny:According to Bernanke, no one, "wants to go back to the 1970s," but neither could Bernanke point to a truly helpful piece of financial innovation...