Weil on Finance, P.M.: Sinking Moynihan's Battleship
Hello again, View fans. By what little power is vested in me, I hereby declare this day to be Awful Bank Metaphor Day. And our winner is Brian Moynihan, chief executive officer of Bank of America Corp. Why is that?
A Kinsley gaffe, for those unfamiliar with pundit-speak, is the act of accidentally telling the truth. Like when Moynihan said this today at an investment conference in New York: "We are a huge company, and we are coming out of the harbor, and it's time to take this huge battleship to cruising speed." For the record, there are no battleships in the U.S. Navy today, because they are obsolete for fighting wars, although they make wonderful tourist attractions. The last battleship on active duty was the USS Missouri, which was decommissioned in 1992, according to the Navy's website. Maybe he meant to say a submersible alien spacecraft with giant laser beams capable of destroying the financial system with a single fat-finger trade. You got me. Anyway, I sure hope Moynihan is wrong about the battleship thing. But I'm afraid he's right. OK, got that off my chest. Now on to the rest of our annotated reads.
U.S. adoption of international accounting rules is still dead
And so is Generalissimo Francisco Franco. But seriously folks, here's why there has been no urgency in the U.S. to switch from generally accepted accounting principles: Other countries that have adopted international financial reporting standards have tended to make tweaks tailoring them to what they see as their own national needs and desires. So there really aren't any global accounting standards, only different flavors from country to country. The chairman of the IFRS Foundation, Michel Prada, complained about this in a speech this week in Tokyo. "A la carte accounting will not deliver globally consistent standards," he said. And he's right. But that's what we have now, which doesn't bode well for his organization's future.
Memo to file: Don't commit fraud in Ho Chi Minh City
From Bloomberg News today: "A Vietnam court will consider the death penalty for two former executives if they're convicted in a $25 million fraud scheme, signaling an aggressive stance as leaders seek to clean up the banking system." So in the U.S., senior executives at too-big-to-fail banks got a pass from prosecutors after the financial crisis. And in Vietnam (China, too) they round up folks and kill them. Surely there must be a reasonable middle ground somewhere between these two extremes.
Doug Kass on the 10 laws of stock-market bubbles
My favorite is No. 9: "When everyone thinks central bankers, money managers, corporate managers, politicians or any other group are the smartest guys in the room, you are in a bubble."
Goofy economics headline of the day
From Marginal Revolution comes this blog post by George Mason University economics professor Tyler Cowen: "Nobody dislikes currency inflation more than strippers." Here's how it came about it. Cowen saw that line used as the caption of a funny cartoon. Then he decided to examine whether the claim is true -- and found that "it depends." (You know economists, on the one hand, on the other hand.) But on the whole, after examining all sorts of "non-convexities," he says "strippers may prefer price inflation." And who am I to argue with that? I only read Marginal Revolution for the articles.
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Jonathan Weil at email@example.com