Today’s Water Cooler: Ferguson die-ins spread nationwide, Dem autopsies, Buffet backs Clinton, Chomsky wrong about language, TNR implosion
Recent Items
Friday, December 5, 2014
New Study Says US Fracking Boom Will Fade Quickly After 2020
A new study by a team at the University of Texas, published in Nature News, throws cold water on bullish US natural gas production forecasts by the US agency, the Energy Information Administration. Its analysis suggests that the fracking boom will be a relatively short-lived phenomenon, which raises doubts about the attractiveness of investing in shale plays and in liquified natural gas transport facilities, particularly for export.
Topics: Dubious statistics, Economic fundamentals, Energy markets, Environment
Posted by Yves Smith at 4:59 am | 44 Comments »
Eileen Appelbaum and Rosemary Batt: How Academics Cook Their Studies to Flatter Private Equity
Yves here. This is the third part of an interview by Andrew Dittmer with the authors of an important new book on private equity, Private Equity at Work (see Part 1 and Part 2).
Here, Appelbaum and Batt discuss some important, widely publicized academic studies in which the results were skewed so as to favor the private equity industry.
Topics: Dubious statistics, Guest Post, Private equity
Posted by Yves Smith at 3:59 am | 6 Comments »
Transparency Hypocrite BlackRock Doesn’t Believe in Giving Out Info But Likes to Take It
Reader Adrien pointed out an article from the Financial Times from last month, in which the world’s largest fund manager, BlackRock, stood up for the widespread practice in the UK of fund managers insisting that investors, including public pension funds, sign confidentiality agreements. This goes well beyond the objectionable practice in the US, where managers of exotic-seeming strategies like private equity, hedge funds, and infrastructure funds have managed to shroud their activities in secrecy. In the UK, even plain-vanilla fund management strategies, like stock and bond funds, are also subject to this information lockdown.
But as we’ll demonstrate, BlackRock does not walk its talk.
Topics: Investment management, Private equity
Posted by Yves Smith at 3:36 am | 1 Comment »
Tom Engelhardt: Washington – War Party Ascendant
It was the end of the road for Chuck Hagel last week and the Washington press corps couldn’t have been more enthusiastic about writing his obituary. In terms of pure coverage, it may not have been Ferguson or the seven-foot deluge of snow that hit Buffalo, New York, but the avalanche of news reports was nothing to be sniffed at. There had been a changing of the guard in wartime Washington. Barack Obama’s third secretary of defense had gone down for the count.
But the press blood lust conveniently missed the real story, that of the ever-increasing power of the War Party within the Beltway.
Topics: Banana republic, Guest Post, Politics
Posted by Yves Smith at 2:00 am | 57 Comments »
Jeffrey Sachs Channeled His Inner Bill Black – and Obama and Holder Ignored Him Too
Yves here. This post by Bill Black serves to illustrate the difficulties of effecting change. As much as Black in particular has been a forceful and articulate advocate for tougher bank regulation and prosecution of executives, arguments like his get at most polite lip service from the enforcers. Recall that Black is far from alone. Others who’ve called for a more tough-minded approach include Charles Ferguson of Inside Job, Eliot Spitzer, Neil Barofsky, Joe Stiglitz and Simon Johnson.
We are seeing more and more of the elite willing call for more aggressive measures to combat bank misconduct.
Topics: Banana republic, Banking industry, Federal Reserve, Guest Post, Legal, Regulations and regulators
Posted by Yves Smith at 2:00 am | 15 Comments »
2:00PM Water Cooler 12/4/14
Today’s Water Cooler: Powers That Be react to Ferguson, please tell me 2016 won’t be Bush v. Clinton, Kalishnikov rebrands, Alien typography
Topics: Water Cooler
Posted by Lambert Strether at 1:59 pm | 98 Comments »
The ECB’s Balance Sheet and Draghi’s Confidence Game
Yves here. This post provides a high level summary and assessment of the ECB’s post-crisis conduct. Among other things, it demonstrates that the ECB makes the Fed look good. Some readers will take issue with the fact that Mody treats QE as a reasonable policy, when the experimental policy has goosed asset markets without doing much for the real economy. It has hurt savers by flattening the yield curve and reducing yields on longer-term investments and many economists believe it has exacerbated income inequality, which is increasingly seen as a drag on growth. However, the hair shirt of the Masstricht treaty rules out fiscal stimulus, and most economists accept the view that monetary stimulus is better than standing pat.
Topics: Banking industry, Credit markets, Economic fundamentals, Europe, Guest Post, Politics
Posted by Yves Smith at 9:55 am | 16 Comments »
Links 12/4/14
Topics: Links
Posted by Yves Smith at 6:55 am | 90 Comments »
Hedge Fund Investors Starting to Push Back Against Big Fees for No Performance
Bloomberg reported on Wednesday that hedge fund investors are finally getting serious about reining in hefty fees when investment performance is underwhelming, particularly since that has been the case for the industry as a whole in recent years. But regular readers of this blog can tell how serious this initiative really is from the very first paragraph of the article:
Topics: Hedge funds, Investment management
Posted by Yves Smith at 3:01 am | 13 Comments »
Eileen Appelbaum and Rosemary Batt Explain Private Equity Tricks That Put Companies at Risk
Yves here. This is the second part of an interview by Andrew Dittmer with the authors of an important new book on private equity, Private Equity at Work (see here for Part 1).
In this segment, Eileen Appelbaum and Rosemary Batt describe some of the ways that private equity firms make the companies they buy more vulnerable to bankruptcy, yet get away with it.
Topics: Banking industry, Guest Post, Private equity
Posted by Yves Smith at 2:03 am | 9 Comments »
Meet and Greet Natalie Jaresko, US Government Employee, Ukraine Finance Minister
The new finance minister of Ukraine, Natalie Jaresko, may have replaced her US citizenship with Ukrainian at the start of this week, but her employer continued to be the US Government, long after she claims she left the State Department. US court and other records reveal that Jaresko has been the co-owner of a management company and Ukrainian investment funds registered in the state of Delaware, dependent for her salary and for investment funds on a $150 million grant from the US Agency for International Development. The US records reveal that according to Jaresko’s former husband, she is culpable in financial misconduct.
Topics: Banana republic, Banking industry, Europe, Guest Post, Investment management, Politics, Russia
Posted by Yves Smith at 12:31 am | 103 Comments »
2:00PM Water Cooler 12/3/14
Today’s Water Cooler: Obama’s Ferguson numbers, Hillary Clinton hesitates, the melt rate in Antarctica, and parasitic lifeforms, alien or not
Topics: Guest Post, Water Cooler
Posted by Lambert Strether at 1:59 pm | 59 Comments »
Don Quijones: Mexico on the Verge of a New Tequila Crisis?
As the old adage goes, things have an annoying habit of occurring in threes. It’s particularly true in the case of crises, which tend to fuel each other in a potentially lethal feedback loop. And Mexico is already experiencing blowback from two separate but strongly interlinked crises.
Topics: Banking industry, Doomsday scenarios, Economic fundamentals, Energy markets, Guest Post
Posted by Yves Smith at 9:55 am | 14 Comments »