Posted by Al Lewis
on May 21, 2012
Wall Street /
1 Comment
Funny how far Facebook shares have fallen since the underwriters stopped supporting it at its offering price.
Shares were trading as low at $33 today which is down more than 13% from it’s IPO price of $38 on Friday.
What a bust this thing has turned out to be, mainly because of the greed that went into overpricing and then expanding the offering just a day before it traded.
I’m sure glad some folks at Facebook and on Wall Street got filthy rich pumping and dumping their declining shares on the market, because, so far, no one else has. On Friday, underwriters stepped in to curb their embarrassment and keep the price from falling below the offering price of $38. When they stopped doing this on Monday, we finally got to see what the market thinks this thing is worth.
Click here to read my column in The Sunday Wall Street Journal. And click here to watch me talk about Facebook’s face plant with Matt Flener of Denver’s 9News.
Posted by Al Lewis
on May 21, 2012
Washington /
No Comments
The government set out to catch rich tax cheats and ended up persecuting all the little people living abroad.
That’s why Peter Dunn renounced his U.S. citizenship last year, and why an increasing number of Americans living abroad are doing the same.
Click here to read my column about Dunn on Marketwatch. Taxing people based on citizenship instead of based on where they actually make their living, is wrong, says Dunn. He frequently blogs on the topic at isaacbrocksociety.com.
A Geneva -based group, American Citizens Abroad, is also fighting for expatriates dealing with a harsh tax code. Marylouise Serrato says she’s hearing from an increasing number of frustrated Americans who are considering renouncing their U.S. citizenship.
This, of course, is an extreme thing to do, as I pointed out in a previous column, Tax Dodgers Are Proudly Un-American. The column took aim at wealthy people renouncing their citizenship to avoid paying taxes – like that Facebook co-founder Eduardo Severan.
It did not address middle-class people renouncing their citizenship because the Internal Revenue Service was making their lives unbearable.
Clearly, there is a case to be made that the crusade to round up rich tax cheats is hurting everyone else living abroad. The problem, I think, is that no one in Washington cares to hear it. It’s difficult from someone living abroad, after all, to even catch their attention.
Posted by Al Lewis
on May 16, 2012
Embattled Execs /
No Comments
JP Morgan Chase CEO Jamie Dimon knows how easy it can be for people to deceive themselves, and yet he somehow still deceives himself.
Long before his bank suffered more than $2 billion in surprise trading losses last week, Dimon had this to say to students at Harvard: “You have to fight self-deception. Human beings are experts at it. I do it, too.”
Nothing like making a point and then proving it.
Click here to read my column on Marketwatch. And click here to watch me talk about this story with Matt Flener of Denver’s 9News.
Posted by Al Lewis
on May 14, 2012
Economy /
2 Comments
Greek crisis solved, market rallies. Greek solution disolves, market plunges.
(
Click here to watch me float my solution to the Greek crisis on Denver’s 9News.)
Here’s a column I wrote on the Greek crisis in March 2010. I thought I’d post it here, because, well, not much has changed in more than two years, just like Greek mythology. I guess that’s why they call them the classics.
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Lewis: The mythology of Greece’s financial crisis
With all this talk of Greece going to Hades it’s time to brush up on Greek mythology.
Here are some key characters, objects, places and events to keep in mind as Greece becomes history:
- Prometheus–Bound to a rock so an eagle can eat his liver. Every time his liver grows back, the eagle just eats it again.
- Pandora’s Jar–Often mistranslated as box, but it’s a jar, filled with assorted evils to be unleashed on the world, like credit default swaps, derivatives, and other exotic financial instruments that lure investors into believing that debt is an asset. Until it bankrupts them.
- Trojan Horse–Looks like a trophy, but letting it though the gate is like hiring Goldman Sachs. Greece hired the firm to help manage its mounting debt. Goldman then reportedly turned around and started selling credit default swaps so investors could bet against Greece’s mounting debt. Goldman remains an enduring symbol of American capitalism, along with that eagle.
- Hermes–God of trade, commerce and riches. But also a trickster and patron of cunning thieves and liars. Prime Minister George Papandreou uses another word for the folks Hermes watches over: speculators. “Unprincipled speculators are making billions every day by betting on a Greek default,” he complained yet again this week. A Greek leader, however, should not forget Hermes is also a messenger, reminding mere mortals that all is not right with the way they are running things.
- Icarus–His father fitted him wings and warned him not to crash into the sea. Papandreou’s father, and grandfather, both prime ministers, shackled him with debt and forgot to mention the sea.
- Cap of invisibility–Mostly used by the gods to avoid detection during battles. Goldman Sachs, however, may have used it to hide Greece’s massive debts. This is why mythology is such a wonderful tool for politicians. A nation runs up massive debts, hires Goldman to hide them under a cap of invisibility, and then blames Wall Street when its debt pile finally exceeds even the cap’s magic powers.
- Epimetheus–Lesser-known god swiftly growing more prominent because he’s the Titan father of excuses.
- Medusa–Just looking at little miss snakes-for-hair can turn any man to stone. Medusa–whose name prophetically includes the letters U.S.A.–is symbol of the things upon which you should never gaze, like any government’s debt or accounting.
- Cerberus–A private equity firm that bought Chrysler and then went howling for a government bailout. It’s also a three-headed hound that guards the gates of Hades. In mythology, as in business, things can have more than one head. Goldman, for instance, benefited from a temporary ban on short-selling stocks when the evil speculators were betting against investment banks in 2008. Now it’s counted among the evil speculators who are simply betting on a Big, Fat, Greek Bankruptcy.
- Heracles–Performed many heroic feats, including the capture of the Cretan Bull. Apparently, cretins were recklessly running up markets in ancient Greece, too.
- Oracle at Delphi–Moved to Omaha, Neb. Now known as Warren Buffett. Owns about $5 billion worth of Goldman Sachs. He recently defended the firm for its role in Greece’s debt crisis, cosmically divining that the firm is “a very, very strong well-run business and it’s got a place in the universe.” Exactly where in the universe, the Oracle of Omaha did not say. This does not rule out the center of our galaxy…which is a massive black hole.
- Nike–God of expensive athletic shoes made for just pennies in Asia. Get out your credit card and buy a pair so you can run from the rioting mobs. Just do it.
- Ouroboros–A serpent that eats its own tail. Like this: Greece uses credit default swaps to reduce its borrowing costs. This enables it to borrow even more. But more borrowing leads to a greater likelihood of default. Which leads to rising credit default swap costs. Which leads to higher borrowing costs. Which makes it even more likely that Greece will default. Which makes credit default swaps rise higher yet again… Still hungry, Greece? Eat more tail.
- Spartan–What Greece is going to have to be for the next few millennia.
- Atlas–Shoulders the weight of this world like the rest of its taxpayers.
- Sisyphus–Cursed to spend eternity rolling a huge boulder up a hill, only to reach the top and watch it roll back down again. Wall Street is always cheering him on: Hey, you keep pushin’, Sisy-baby. We’ll take bets every which way as you roll. Hey, who knows? Maybe next time you can keep that boulder on the top of the hill.
Posted by Al Lewis
on May 12, 2012
Commercial Messages /
1 Comment
Bank of America spends $2 billion a year on advertising and marketing, and yet it seems to protesters in the streets are able to come up with better buzzwords.
This week, I offer the too-big-to-fail bank with some marketing ideas.
Click here to read my column in The Sunday Wall Street Journal. And click here to watch me discuss the suprise $2 billion-plus loss at JP Morgan Chase with Matt Flener of Denver’s 9News.
So far, only a few folks have sent me nastygrams this week. Perhaps it was because I went so much easier than, say, Rolling Stone magazine when it wrote it’s piece: Bank of America: Too Crooked To Fail.
Posted by Al Lewis
on May 12, 2012
People /
Comments Off
Joe Kissack, a top sales executive at Columbia TriStar Television, scrambled to buy the rights to an epic survival tale.
Three Mexican fisherman were lost at sea for 284 days until they were picked up 5,000 miles away from their tiny West Coast village by a Taiwanese fishing vessel.
They came home to a hero’s welcome, but it wasn’t long before rumors began to swirl.
Some questioned whether the men concocted the tale to cover up alleged drug trafficking operations. Others wondered whether the men survived by resorting to cannibalism. Some charted the ocean currents and argued the men could not have drifted to the point where they were found.
Kissack, who has interviewed the men extensively, believes the story as it has been recounted. In his new book, The Fourth Fisherman, he recounts the tale as a metaphor for his own life. For years, Kissack suffered from addiction, anxiety and depression, even as he succeeded at a difficult career. Like the fishermen, he too, was lost.
Some stories can never be completely verified. Sometimes it doesn’t matter.
Click here to read my column on MarketWatch.
Posted by Al Lewis
on May 09, 2012
Embattled Execs /
Comments Off
Yahoo CEO Scott Thompson would be so much better off today had he read my February 2009 column headlined, “Of all the indignities, don’t get Minkowed.”
Click here to read what Thompson should have read. Basically, a famous convicted felon named Barry Minkow was looking for lies on corporate bios and then shorting the stocks of the companies where he found them. The point of the column was that any resume exaggeration out there can eventually become uncovered.
Now it’s 2012 and yet another top executive has been embarrassed after someone discovered he claimed a degree on his corporate bio that he did not have. It remains to be seen whether Thompson is going to survive the ensuing turmoil, and demands from a dissident shareholder that he be fired. Click here to read my latest column about “getting Minkowed” on Marketwatch.
Posted by Al Lewis
on May 07, 2012
Al On TV /
2 Comments
Funny how the unemployment rate falls even as the jobs numbers themselves fall.
I talk about it with 9New anchor Matt Flener. Click here to watch my Sunday morning appearance.
Posted by Al Lewis
on May 07, 2012
Washington /
6 Comments
People who say President Obama is anti-Wall Street don’t understand how the revolving door between Big Business and Washington works.
Newsweek is about to detail this for those who don’t still get it. Click here to read the details in The Daily Beast. If you’ve wondered why so few Wall Street titans have gone to prison, or why so little has been done to stop the foreclosure crisis, Newsweek is spelling it all out.
Anybody running for president needs two things denominated in the millions: Dollars and votes. The way to accumulate both of these things is to publicly say denigrating things about Wall Street and Big Business, for the benefit of the voters, while privately telling the fat cats you will protect them.
So far, Obama has proven better at this game than any Republican. For all the hype about our president being a socialist, he is clearly a better capitalist than his critics.
Good luck, Mitt Romney. You’ve got keen competition. Maybe you should be the Democrat.
Posted by Al Lewis
on May 06, 2012
Litigation Nation /
Comments Off
New York law firm Dewey & Leboeuf isn’t just melting down, it’s living out every bad lawyer joke ever written.
Click here to read my column in The Sunday Wall Street Journal.
