Weil on Finance, P.M.: Goldman Sachs Dictionary
We meet again, View fans. Let the links begin.
What's abillion dollars to Goldman Sachs anyway?
I love this story today by Michael Moore of Bloomberg News clearing up the mystery and confusion (to the extent that's possible) surrounding Goldman Sachs's losses or non-losses last quarter on something having to do with currencies. It seems there's a difference between trading "currency products" and "currency trading." In the first category, Goldman showed a $1.3 billion loss last quarter. And in the second type, it showed a profit. Don't feel badly if you don't understand the difference. By all indications, the disclosures are designed this way so that ordinary mortals can't make sense of them. Of course, the folks at Goldman could do a better job of explaining if they were so inclined. But good luck with that.
Mark Roe, who teaches bankruptcy and corporate law at Harvard Law School, has a good post today on one of the underappreciated problems facing too-big-to-fail banks. He calls it "structural corporate degradation." Here's the gist: "Debt cost savings from the implicit subsidy can amount to a good fraction of the big firms' profits. Directors contemplating spin-offs at a too-big-to-fail financial firm accordingly face the problem that the spun-off, smaller firms would lose access to cheaper too-big-to-fail funding. Hence, they will be relatively more reluctant to push for break-up, for spin-offs, or for slowing expansion." Also see the second link -- to a September 2012 article by Christine Harper and Hugh Son of Bloomberg News, who made similar points.
A Carl Icahn deal for Carl Icahn
It really was considerate of the folks at Take-Two Interactive Software to buy back Carl Icahn's $230.5 million stake in the company at yesterday's closing stock price. Because today, the stock fell about 5 percent on the news that his investment firm, Icahn Group, had cashed out and taken its three directors who were on Take-Two's board with it. One of the advantages of being Carl Icahn is that you get to legally trade on certain types of market-moving inside information -- such as the knowledge of what Carl Icahn plans to do next with stocks Carl Icahn owns. Nice work if you can get it. Even better, you get to trade directly with Take-Two, maker of the "Grand Theft Auto" games, rather than having to deal with the indignities of the stock market, which everybody knows is for the little people. Well done.
Julian Assange is probably safe from prosecution in U.S.
In case you missed it, the Washington Post reported that the Justice Department "has all but concluded it will not bring charges against WikiLeaks founder Julian Assange." The article went on: "If the Justice Department indicted Assange, it would also have to prosecute the New York Times and other news organizations and writers who published classified material, including The Washington Post and Britain's Guardian newspaper, according to the officials, who spoke on the condition of anonymity to discuss internal deliberations." It isn't clear why it took prosecutors three years to figure this out. Note the irony of U.S. officials requesting anonymity to discuss a secret grand-jury investigation and their lack of a case against someone who relied on anonymous sources for his information (which didn't turn out well for Bradley Manning).
Am I buggin' you? I didn't mean to bug ya.
Today and tomorrow at the Audubon Butterfly Garden and Insectarium in New Orleans, "you can sample traditional Thanksgiving dishes done in ways you'll only find here; turkey with cornbread and mealworm stuffing, wax worm cranberry sauce and cricket pumpkin pie. This might not be what the Pilgrims ate, but you'll be surprised at how tasty it is. YUM!"
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Jonathan Weil at firstname.lastname@example.org