Weil on Finance: Bull-Market Genius
Good morning, View fans. Here is a look at some of my breakfast reading today.
Bull-market geniuses as CEOs
Gretchen Morgenson in her New York Times column asked: “Should a rising stock price inoculate top executives from criticism over their pay?” The answer is: No. “This focus doesn’t just leave out a wide array of measures that better capture whether a company’s management is operating in the interests of investors with a long-term horizon. It also allows top executives to reap the pay benefits associated with a short-term bullish stock market, which may have nothing to do with their company’s specific business or operations, pay experts contend.”
What does it take to get booted off the government payroll in Greece?
Even murder may not be a disqualifier. James Angelos of the Wall Street Journal tells the story of two people in prison over the 2009 killing of the mayor of Pangaio, Greece. They’re still on the municipal payroll. “International creditors -- now evaluating Greece's adherence to terms of two bailouts and weighing a possible third -- have called on the country to shape up its public-sector workforce and dismiss thousands of workers deemed unsuitable,” he writes. “The case in Pangaio suggests how hard that is likely to be.”
Europe’s sovereign-bank nexus is nowhere near broken
From the Financial Times: “Europe’s financial institutions are more exposed to their domestic government bonds than at any time since the eurozone crisis started, reigniting concerns that the fates of sovereign states and their banks are too closely intertwined. Despite official pledges by eurozone authorities to break the `sovereign-bank nexus,’ government bonds accounted for more than a 10th of Italian banks’ total assets at the end of August, the last month for which data are available. That is up from 6.8 per cent at the beginning of 2012, according to data from the European Central Bank.” So if a country’s biggest banks get in trouble, this weakens the country’s government, which weakens the banks, and so on (and vice versa).
Wake me up when the U.S. debt showdown is over
This is the 18th U.S. government shutdown since 1976. Kopin Tan of Barron’s says it’s easy to see why the market is treating it like the boy who cried wolf: “Clearly, investors understand the dire impact of a Beltway impasse, but believe the odds of our first-ever debt default are still slim. We expect a president freed from re-election pressure to play hardball, and Republicans to pantomime enough of a fight to appease Tea Partiers ahead of 2014's mid-term elections. But we're counting on a resolution that lets America continue its habitual and serial borrowing.” Plus, “this shutdown all but ensures that the Federal Reserve’s quantitative-easing program, such a big hit with viewers recently, will get renewed for another season.”
Personally I think the name of this corporate mascot is great
A Japanese company that makes freezers, Fukushima Industries Corp., unveiled a new mascot over the weekend. It’s shaped like an egg with wings and red feet. The name: Fukuppy. The South China Morning Post calls this “unfortunate,” failing to see the true genius that is required to come up with a name so amazing.
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)