Weil on Finance: J.C. Penney's Awful Day, Tax Soccer Stars

Jonathan Weil joined Bloomberg News as a columnist in 2007, and his columns on finance and accounting won Best in the Business awards from the Society of American Business Editors and Writers in 2009 and 2010.
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Good morning, View fans. Here are your morning links. Have a great day.

Another awful day for J.C. Penney investors

The struggling retailer's stock fell 15 percent yesterday after Goldman Sachs credit analysts recommended that investors take out insurance on J.C. Penney's debt via credit-default swaps only months after Goldman arranged a big loan for the company. The Wall Street Journal's Justin Lahart says the mere possibility that J.C.Penney is considering raising more cash gives investors reason to worry: "The problem with buying yourself some breathing room is that it lets everyone know that you are having trouble catching your breath."

A positive story about the ruin in Greece

Dimitris Rigopoulos of the Athens newspaper Kathimerini writes that "there is something quite touching about the scenes that have been unfolding every day over the past few weeks at the Olympic Stadium Complex," known as OAKA, which fell into disrepair after the 2004 summer games and was overrun by vandals. "The citizens of Athens appear happy to ignore what country they live in and choose OAKA for their leisure time and their Sunday afternoon outings, taking a walk with their children, riding their bicycles or just hanging out with friends. They pretend not to see the destruction, the graffiti that mars walls and architectural installations that cost millions of euros to create, and the trash that has piled up against dying trees and empty flowerbeds. This is `their' park, even though successive governments have deprived them of what they ought to have and deserve." The crowds began coming after a small group of volunteers started a campaign on Facebook.

Stephen Roach on the Fed's quantitative easing

He doesn't like it. In an article for Project Syndicate, titled "Occupy QE," the former Morgan Stanley chief economist writes that "the Federal Reserve continues to cling to a destabilizing and ineffective strategy" and "is courting an increasingly treacherous endgame at home and abroad." In short, we can't wealth-effect our way back to economic growth. (I know, I just used "wealth-effect" as a verb, but it feels right.) On a related note, Binyamin Appelbaum points to a New York Times poll showing that "only one in three Americans has confidence in the Federal Reserve's ability to promote economic growth, while little more than a third think the Fed is spinning its wheels."

Here is someone who has a great future in banking if he ever leaves government service

U.K. Chancellor of the Exchequer George Osborne, seeking to protect London's financial community, has filed a legal challenge seeking to stop European Union attempts to cap banker bonuses. "The challenge points out that the bonus cap has the potential to make the banking sector less sound from a prudential perspective as it will simply increase fixed costs," writes James Quinn, financial editor of the Telegraph in London. And he might be right. But let's cut to the real motivation: It's not the principle that counts here, it's the money.

You know times are desperate in Europe when this happens

Lionel Messi, the star of soccer's FC Barcelona and four-time global player of the year, is due in a Spanish court today to face a tax-evasion complaint. From Oliver Staley and Alex Duff of Bloomberg News: "The case against Messi, who holds dual citizenship in Argentina and Spain, is part of an aggressive push by Spain, U.K. and other deficit-ridden governments to tackle tax evasion in Europe's 19.4 billion-euro soccer industry. After decades of coddling Europe's most popular -- and politically influential -- sport, authorities are pursuing players and teams that collectively owe billions of euros in unpaid taxes." Because as we all know, the people who brought Europe's economy to its knees are its star athletes, and they must be brought to justice before the European Union can ever repair its troubled banking system.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Jonathan Weil at jweil16@bloomberg.net