I’m sitting in the Phoenix Airport, waiting for the redeye back to NYC. Why was I in Phoenix? To attend the graduation ceremony for the Thunderbird School of Global Management. Why would I do that? Well, they recite something at the Thunderbird graduation that seemed the basis of a good column. We’ll see about that, but for now I have …
Pay cuts instead of layoffs: something insidious this way comes?
More and more companies are cutting worker pay. I wrote a story about that a few weeks ago for the Global Business section of our magazine. I started thinking about it again last week after hearing that EMC, which makes data storage hardware, is reducing tens of thousands of salaries by 5%. The forward march continues.
At first blush, …
The Senate cramdown of mortgage cramdowns
Noam Scheiber has a nice explanation of why mortgage cramdowns lost out in the Senate Thursday but safe harbor for mortgage servicers will probably make it into law.
Both provisions are about making it easier to change the terms of troubled mortgages—in particular by reducing the amount owed to reflect the collapse in home values over …
“Smart Sponges”
A company finds a market for its “Smart Sponges”, chemically-engineered filters that effectively — and cheaply — purify storm-water runoff
Chrysler: Bankruptcy wins
Chapter 11 bankruptcy is one of the greatest glories of American capitalism. It evolved organically during the financial crises of the late 1880s, was replaced with a more punitive code in the 1930s, and then was resurrected and codified in the late 1970s. Chapter 11 allows companies that got in over their heads to seek a way out that …
Fiji water’s invite-mockery marketing strategy
Lynda Resnick, who with her husband Stewart owns Fiji water (along with POM and Teleflora), is on the board of the Aspen Institute and the Milken Family Foundation and is a regular at conferences where people talk about things like sustainability and carbon footprints. So is her water—pictured above at the Milken Foundation Institute …
Dr. Doom is still all doomsday-like
Nouriel Roubini was one of the first people to start talking about this financial crisis and recession and gosh darnit if he’s not going to be one of the last. He popped by this afternoon to talk to some TIME editors and writers. While he was here, he made fun of the notion that we’re seeing “green shoots” in the economy—choosing …
Lew Ranieri has turned bullish on housing
Lew Ranieri, the man who built the market for mortgage securities in the 1980s (and proud member of TIME’s list of 25 People to Blame for the Financial Crisis), was very early in predicting that subprime mortgage lending was going to result in a really big mess. I first heard of about his gloomy views on the subject in 2007, but Michael …
GDP falls 6.1% in the first quarter. What does that mean?
The U.S. economy shrank at a 6.1% annual pace (adjusted for inflation/deflation) in the first three months of the year. That’s a lot, especially since it was down 6.3% in the previous quarter. If these numbers hold up (more on that in a moment), that’s the worst half-year run for the economy since 1957-58, when real gross domestic …
Gary Becker says markets aren’t rational; endorses Yglesias approach to financial regulation
University of Chicago economist Gary Becker, in the midst of a mostly predictable analysis of the financial crisis and criticism of the Obama stimulus package at lunch at the Milken hoedown today, said a couple of interesting things:
1) Becker has built an estimable career around the notion that individuals generally respond rationally …
Obama’s housing plan, Part II
Today we got a major follow-up to the Obama Administration’s housing-rescue plan. You can now catch a break on your second mortgage, too. I don’t think the story I wrote is online yet, but here’s the sneak-peak:
Like the broader “Making Home Affordable” housing plan announced on Feb. 18, the new effort involves the federal government
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So where would you rather put your money, in hedge funds or in GE and GM?
Orin Kramer, the chairman of the board that oversees New Jersey’s public pension system (and himself a hedge fund manager), says he got a call from a reporter a while back asking him whether pension fund managers could ever be expected to “understand hedge funds in the way they do GM or GE.” That got a little bit of a laugh from the …