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Economist (December 29)

2010/ 12/ 30 by jd in Global News

America’s economy is looking better, but investors should “proceed with caution.” While forecasting America’s economy will grow by nearly 4% in 2011, the Economist points out “share prices are meant to be based on more than just the next 12 months’ earnings, and the medium term is as treacherous as ever; perhaps more so.” Chief among the concerns is “the American government’s inability to sort out its finances in a credible way.”

 

Financial Times (December 28)

2010/ 12/ 29 by jd in Global News

Investment banks must shrink, “both in terms of leverage and the risks they take, if they are to regain their legitimacy.” Investment bankers are ready to forget the last crisis and push on with maximizing profits. Taxpayers and regulators, on the other hand, do not want to take chances. The banks must not only reduce their leverage and risk, they must demonstrate that “they do a useful job” which benefits society.

Investment banks must shrink, “both in terms of leverage and the risks they take, if they are to regain their legitimacy.” Investment bankers are ready to forget the last crisis and push on with maximizing profits. Taxpayers and regulators, on the other hand, do not want to take chances. The banks must not only reduce their leverage and risk, they must demonstrate that “they do a useful job” which benefits society.

 

Washington Post (December 26)

2010/ 12/ 27 by jd in Global News

The death penalty was used more sparingly in the U.S. during 2010. The total number of executions fell by 6 to 46. The Post welcomes this trend and ultimately hopes for complete abolition. “Only then will there be certainty that the state has not put innocents to death.”

 

New York Times (December 23)

2010/ 12/ 26 by jd in Global News

Congress overcame partisanship to make this lame duck session one of the most productive in memory. Successes included the New Start nuclear arms treaty with Russia that is designed to reduce nuclear stockpiles. All in all, things have shaped “up to be a remarkably successful legislative agenda for President Obama’s first two years.”

 

Bloomberg (December 22)

2010/ 12/ 25 by jd in Global News

Just weeks before being sued for its role as auditor of Lehman Brothers, Ernst & Young (E&Y) was advertising that it could help companies identify “new risks related to fraud and corruption.” A Bloomberg editorial agrees that “E&Y may have lots of experience in this field,” but adds it’s the wrong kind of experience. “It’s indisputable that E&Y blessed Lehman’s financial statements quarter after quarter, year after year, falsehoods and all.” The problem is all of the large audit firms have had the wrong kind of experience. “Killing E&Y or any of the other Big Four audit firms — PricewaterhouseCoopers LLP, Deloitte & Touche LLP and KPMG LLP — would leave just three large survivors, when the industry has too few competitors already.”

 

Wall Street Journal (December 22)

2010/ 12/ 24 by jd in Global News

Two partners in Bain & Company’s Tokyo office write “Japan’s marketplace isn’t a monolith.” They believe the cosmetics business provides “glimpses of what a better Japanese economy would look like.” During the past decade, cosmetics have benefited from deregulation such as the elimination of manufacturer’s recommended prices and relaxed procedures with the Ministry of Health, Labor and Welfare. “These reforms have had dramatic implications. By spurring new and dynamic competition, deregulation unleashed a refreshing spirit of innovation in an industry that had grown stagnant.” The authors believe companies, consumers and Japan’s economy have benefited because the “more competitive market forces companies to think more creatively about consumers’ needs.”

 

Global Times (December 17)

2010/ 12/ 24 by jd in Global News

As Beijing moves to ease congestion by restricting sales of autos, overseas news outlets are noting this story which advocates relocating the capital. “Traffic jams and environmental problems in Beijing are leading some experts to revisit a decades-long proposal for China to relocate its capital to Central China or another part of the country.” Other factors favoring a move involve limited drinking water and the need to boost regional development. Many, however, view any such move as impractical and unlikely.

 

Businessweek (December 21)Businessweek (December 21)

2010/ 12/ 23 by jd in Global News

Ernst & Young LLP is being sued by New York Attorney General Andrew Cuomo for enabling Lehman Brothers to engage in a major accounting fraud designed to deceive investors. Lehman routinely moved liabilities off balance sheet for a period of over 7 years while Ernst & Young was its public auditor. Through what became known as “Repo 105” transactions, Lehman would sell debt before reporting dates with an agreement to repurchase the debt afterwards. As much as $50 billion was hidden from view through this window-dressing tactic. According to Cuomo, who will soon step aside as Attorney General to become New York’s Governor, “This practice was a house-of-cards business model designed to hide billions in liabilities in the years before Lehman collapsed.”

Ernst & Young LLP is being sued by New York Attorney General Andrew Cuomo for enabling Lehman Brothers to engage in a major accounting fraud designed to deceive investors. Lehman routinely moved liabilities off balance sheet for a period of over 7 years while Ernst & Young was its public auditor. Through what became known as “Repo 105” transactions, Lehman would sell debt before reporting dates with an agreement to repurchase the debt afterwards. As much as $50 billion was hidden from view through this window-dressing tactic. According to Cuomo, who will soon step aside as Attorney General to become New York’s Governor, “This practice was a house-of-cards business model designed to hide billions in liabilities in the years before Lehman collapsed.”

 

Washington Post (December 19)

2010/ 12/ 21 by jd in Global News

Washington needs to get its fiscal house in order during 2011. Lawmakers need “to consider raising tax revenue even in the context of spending cuts.” The Post points out that ignoring the mounting deficit until after the 2012 election should not be an option. “Delay will only make the eventual solution more painful and more costly.”

 

New York Times (December 18)

2010/ 12/ 20 by jd in Global News

The World Health Organization (WHO) has made “enormous progress over the past three years” in fighting malaria. Deaths from malaria declined by over 200,000 to 781,000 in 2009. With funding, deaths could be halved by 2012 and even eliminated by 2015. Alas, at $1.8 billion, funding is less than a third of what’s required. “Rich nations need to do more.”

 

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