500-Person Threshold Debated for Its 47-Year History. 7:46 p.m. | Updated After news broke of the investment by Goldman Sachs in the social networking site Facebook, a harsh spotlight was cast on a nearly 50-year-old law that limits the number of shareholders in a private company. In 1964, regulators started requiring companies with more than 499 shareholders to publicly report their financial results. It is a rule that has been debated from the outset — and the issues raised now are the same ones raised then. The Securities and Exchange Commission is examining the frenzied buying and selling of Facebook shares and other private technology companies in the secondary market. To some, the structure of the Goldman deal merely looks like a way to circumvent the law. Through a special purpose vehicle, the firm could potentially pool money from thousands of wealthy clients and still be considered one investor because the entity would be managed by Goldman.
George Tames/The New York TimesHugh F. Fed Officials Saw Housing Bubble in 2005, Didn't Alter Policy. Federal Reserve staff and policy makers identified a housing bubble in 2005 and failed to alter a predictable path of interest-rate increases to slow down the expansion of mortgage credit, transcripts from Open Market Committee meetings that year show. Led by then-Chairman Alan Greenspan, the FOMC raised the benchmark lending rate in quarter-point increments to 4.25 percent from 2.25 percent at the end of December 2004. The committee also removed uncertainty about the pace of rate increases by telegraphing that future moves would be “measured” in every statement. The “measured” pace language helped fuel the housing boom by keeping longer-term interest rates low and was inappropriate at the time given the uncertainties about both inflation and asset prices, said Marvin Goodfriend, a professor at Carnegie Mellon University in Pittsburgh.
“It was a major mistake of the Fed,” said Goodfriend, who attended some of the 2005 meetings as a policy adviser to the Richmond Fed. Close Open Top Three. John Boehner's high-stakes shutdown game | Alex Slater. Months, even weeks, ago it might have been seen as inconceivable. But now, politicians on both sides of the aisle are bracing themselves for the perfect political storm: a showdown over government shutdown.
That's right: in a mere matter of weeks, we may be looking at another government shutdown along the lines of 1995, when President Clinton and the Republican-controlled Congress feuded over funding for critical government programmes. The government's current spending authorisation ends on the 4 March and reauthorisation must be granted to avoid a complete shutdown of government, government services and the employment of civil servants. Congress can pass a temporary funding resolution to keep the government operating – something that happened habitually under President Bush, whose demands to fund the Iraq war were frequent. But this time, Republicans will likely refuse to pass that funding resolution, thus triggering a shutdown.
Government departments are already bracing for the storm. Adam Smith Was Right about Corporate CEOs’ Incentives absent Effective Regulation. By William K. Black Originally published December 4th, 2008, cato-unbound.org Our different views prove that hindsight is often myopic. Larry White’s take is that Clintonian regulations perverted private incentives.
The boom and bust happened in a system with … extensive legal restrictions on financial intermediation. Nor have we had banking and financial deregulation since … 1999. (One can’t explain an unusual cluster of errors by citing greed, which is always around, just as one can’t explain a cluster of airplane crashes by citing gravity. Perverse Compensation Systems are the Key I disagree with Larry’s theses, but have space to demonstrate only an alternative perverse incentive. The most relevant economic works for understanding these crises are by Akerlof and Romer, Galbraith, and Minsky. Modern executive compensation systems suborn internal controls. [Businessweek:] We’ve had a terrible scandal on Wall Street. The Incidence and Nature of Mortgage Fraud The testimony of Thomas J.
Notes. Chaos Monkey: How Netflix Deals with Failure. Bleacher Report Raises $10.5M; Now Fifth Largest Sports Site. Bleacher Report is going to announce a new $10.5 million round of venture capital this morning and a lot of people reading this will probably say, “Bleacher-who?” Somehow Bleacher Report has pulled off two things you’re not supposed to be able to pull off in Silicon Valley’s Web scene. The first is keeping a low-profile while growing steadily in users and revenues. The second is building a serious sports challenger to the big portals and legacy news companies. Finally. Bleacher Report claims it has 17 million uniques (roughly 70% more than TechCrunch, for perspective) and is ranked by comScore as the fifth largest sports site, after Yahoo, ESPN, Fox Sports, AOL Fanhouse.
Let’s face it, a big reason the portals are still so relevant is they lead in mass-appeal content verticals like finance, entertainment and sports. In the last year, Bleacher Report has started getting big sports six-figure ad buys on par with the other big players, by mainstream advertisers like Gilette and Axe. College Football Winners Still Lose as Bowl Costs Exceed Payout. Rutgers University celebrated its 8- 4 record last football season with a trip to the St. Petersburg Bowl in Florida. Big East Conference schools got stuck with a $740,000 bill. The Scarlet Knights’ story isn’t unique in college football. Payouts for all but the biggest bowl games seldom match teams’ expenses, and the rest of the schools in the conference have to subsidize them, according to financial records obtained by Bloomberg News using open records laws.
There were 33 bowls played last year, not including the national championship game. “Bowls have become network-owned, commercial enterprises, in some cases, pitting average teams in money-losing bowls for the benefit of a few,” said Charles E. League commissioners including Wright Waters of the Sun Belt Conference, who are usually responsible for negotiating the money-losing bowl agreements, say these games aren’t about profit; they’re meant to promote the school and give athletes a chance to experience postseason play.
Find Balance. Comcast-NBC merger gains traction. The chairman of the Federal Communications Commission said Thursday that he will vote to approve the proposed merger of Comcast and NBC Universal as long as certain conditions are met, a significant step toward the formation of a new Internet and media powerhouse. Julius Genachowski issued a draft order of approval for the merger on the condition that the companies promise to share TV shows not only with competing cable and telecom services but also, to some extent, with new Web platforms, such as Apple TV and Netflix, that want to offer television over the Internet. The order was circulated to the other four members of the FCC for consideration, with the agency likely to vote next month.
The Justice Department, which is conducting a separate antitrust review of the deal, has not indicated its position. Observers said the companies, eager for approval after a year-long review, want to alleviate those concerns with specific commitments to preserve competition. Print. It Ain't Dead Yet - Design. Print is dead. Or is it just sleeping? A decade ago, designer Jessica Helfand, wrote a passionate defense of the written word (and of typography in particular) to her then two year old daughter, Fiona.
Well, it actually was an essay commemorating the second edition of David Carson's The End of Print, (which was published way back in 1995, ages before Kindles, iPads, and Smartphones and had precious little to say about technology's rapid encroachment). Print, she wrote to her young daughter: "... is a word that occasionally causes people to wrinkle up their noses and describe a time when it was customary to wear burlap shoes and sit hunched over, by candlelight, scratching painstakingly written messages to one’s friends and neighbors using quill pens. This really happened, back in ancient times.
Like back when there were mummies and dinosaurs. "And even though we read them printed on paper and you will very likely read them emblazoned on a screen, do you know what, Fiona? Going Bankrupt: 100 Bailed Out Banks. The WSJ reports today that nearly 100 U.S. banks that got TARP funds from the federal government in Q4 2008 are in danger of going bankrupt. So far, 7 bailout recipients have failed, resulting in more than $2.7 billion in lost TARP funds. The balance of the remaining potential failures relatively small banks — the median size was $439 million in assets, and the median TARP infusion was $10 million apiece: “Nearly 100 U.S. banks that got bailout funds from the federal government show signs they are in jeopardy of failing.The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators.
There are many many reasons not to bail out failed banks: Moral Hazard, rewarding the incompetent, thwarting legitimate competition, reducing incentives to be risk averse. We can add another to the list: Throwing away billions of dollars . . . SunChips and Supercapitalism - - Technology. The Internet is astir with the news that SunChips are ditching their newish bioplastic bag because it is perceived as being too loud. Some agree with Frito-Lay's decision, others disagree, and still others point out that bioplastic is not always an environmental win. But we're all dancing around the larger point: Competition in the snack chip market has reached such a level that the molecular composition of the chip-containing bag as reflected in the magnitude of its sound could cause a firm to lose customers!
This is a miniature portrait of Robert Reich's hyper-competitive supercapitalism at work. This is where we put our productive talents to work. And as this dawns on you... You imagine arch historians glossing the year: And in 2010, the most powerful country in the world was consumed with the show Glee, whether or not a political candidate was or had been a witch, and the sound of a bag of not-quite potato chips. Indeed. This is not as anti-consumer culture as it sounds. Yahoo Is Down, As If Carol Bartz Needed More Problems. Yes, according to multiple reports and our own experience (see left) Yahoo.com, the Internet’s biggest portal is currently down for the count, both in the US and abroad. Maybe the traffic behemoth couldn’t take all the “merging with AOL” speculation and just decided to take the day off?
From what it looks like Yahoo! Subsites like mail.yahoo.com and news.yahoo.com are still up. The “Connection Refused” problem seems only be affecting Yahoo.com itself. This is indicative of some serious issues as, in contrast to more mercurial services like Twitter, I’ve never seen the Yahoo homepage itself go down in my lifetime. And I am not alone, according to a former Yahoo employee commenting on Hacker News: “This has to be Yahoo! This outage also comes at completely the wrong time as the much beleagured Yahoo is rumored to be in buyout talks. I have contacted Yahoo for more information and and they have confirmed that it is just the homepage and that they’re working on a fix. Update: It’s back up! The Long Nose of Innovation. Finance. Muni Debt Is Bubble Near Bursting, Marketfield’s Aronstein Says. Booming China Is Buying Up World's Coal. Brokers must think twice before tweeting, Facebooking.
If you're a registered broker or work for firm that sells any sort of investment products, you'll want to think twice before blurting out anything that could be construed as investment advice on Facebook, Twitter, or any other social networking site. The Financial Industry Regulatory Authority (FINRA) has updated its guidelines for interpreting the rules that govern how brokers present advice to the public to cover online social networks; and, in some cases, the guidelines rely on social network monitoring and archiving technology that doesn't even exist yet. The new guidelines have two broad effects on the way financial firms use social media. Take Facebook, for example, where ostensibly personal accounts nonetheless indicate where an individual works. Firms are also expected to retain records of all "business-related communications on social networks, whether those communications are official or from associated persons. " Paul Allen's patent infringement lawsuit dismissed.
Microsoft cofounder Paul Allen has hit a snag in his massive patent infringement suit against Apple, Google, Netflix, Facebook, YouTube, and numerous others. US District Judge Marsha Pechman dismissed the lawsuit on Friday, according to court documents, saying that Allen's company failed to specify infringing products from any of the 11 companies. Interval Licensing LLC, Allen's patent holding company, filed the lawsuit in August and accused 11 Internet giants of violating four patents.
The patents covered three main concepts: browser use for navigating through information, managing a user's peripheral attention while using a device, and alerting users to items of current interest. They collectively addressed the general concept of presenting searched-for information to a user along with related news articles, media, status updates from friends, or other data. Since failing to specify the products is a violation of court rules, the case couldn't proceed. The fight isn't over yet, though. GAO: Debt Pays For Past — Not Future — Spending.