Dodd Gets the Job Done?
—The Senate moved closer to passing a financial reform bill. Dodd is playing down the fact that regulators will lose the ability to create a $50 billion fund to pay for future bailouts. But to me that seems like a big deal. Yes, the government still has the ability to make banks pay for the bailouts after the fact, but without a fund they can point to and say, “Hey Taxpayer it’s not your money,” I think outrage over government stepping to do anything will continue.
–On regulation, Allan Sloan over at Fortune makes some suggestions about what really needs to get done to fix Wall Street. My favorite is that the government has the right to claw back bonuses for five years. Companies can ask for signing bonuses back. Why can’t we ask for performance bonuses back. As long as employees know it is a possibility in advance, I think it would be doable.
—A new study by a compensation consultant finds that CEO pay and performance is not linked. Not really any surprise there. Best article I ever read on CEO pay was from the NY Times finding the link between golf scores had a higher correlation with pay than stock price or earnings.
— Speaking of overpaid CEOs: Would Goldman split its CEO and chairman positions? Felix Salmon gives some good reasons why that won’t happen. I agree. I don’t think Goldman will take baby steps. The real question is what is the appropriate over/under on Blankfein. I say September 1st. Anyone else?
—The Curious Case of why a new derivatives exchange would be starting now. Cantor wants to allow people to be able to bet for or against the success of a film. Hollywood seems not to want it, even though it may badly need it.
—Productivity rose again in the first quarter. You know what that means: More work, fewer workers.
—Paulson and Geithner are testifying in front of the Financial Crisis Inquiry Commission. And it looks to be a he-said, he-said. Paulson warns the panel against regulating non-banks and derivatives markets. Geithner says it is time to shed light on shadow banking system. Are these guys getting to the bottom of anything? Don’t know. Go here for FCIC hearings.
Anything I miss?