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Writing in the Washington Post, Jonathan Weisman today gives Republicans in Congress way too much credit for finally addressing the issue of deficit spending.
"The Senate approved sweeping deficit-reduction legislation last night that would save about $35 billion over the next five years by cutting federal spending on prescription drugs, agriculture supports and student loans, while clamping down on fraud in the Medicaid program.The measure would also open Alaska's Arctic National Wildlife Refuge to oil drilling, a long-sought goal of the oil industry that took a major step forward after years of political struggle. A bipartisan effort to strip the drilling provision narrowly failed.
The Senate bill, which passed 52 to 47, is the first in nearly a decade to tackle the growth of entitlement spending, the part of the federal budget that rises automatically based on set formulas and population changes."
Sweeping? Tackling the growth of entitlement spending?
Lets be clear what is being talked about here. Bear with me for a little elementary math. $35 billion in cuts over 5 years comes out to $7 billion per year.
Here's the most recent take from the Office of Management and Budget on the budget for the currrent fiscal year and the outlook for the next several years. Scroll down to Table 5 on Page 19. There it is revealed that spending for Fiscal 2006 is estimated to be $2.613 trillion. For fiscal 2006 and the next four fiscal years, spending is set to total $13.975 trillion.
In this package of sweeping deficit reduction that tackles entitlement spending, Congress proposes to cut $35 billion out of some $13.975 trillion in spending over five years. Divide $13.975 trillion into $35 billion and you get: .0025447.
In other words, Congress is proposing to cut spending over the next five years by one quarter of one percent.
Sweeping, baby.
Posted by dan at 10:28 AM
Republicans in Congress and the Whiite House have engaged in an orgy of deficit spending over the past five years. So when Tom DeLay finally comes clean and apologizes for the growth in government over the last several years, does he take responsibility? Um, not really.
Instead, he blames the guy responsible for everything bad that's happened in the past five years: Bill Clinton.
Holly Yeager reports in the Financial Times:
Speaking at the Heritage Foundation, a conservative Washington think-tank that has been among the critics of the Republicans’ spending record, Mr DeLay boasted about his party’s record on tax cuts. “Since 1995, House Republicans have voted to cut taxes every year and not once voted to increase them.“Our record on spending has not been as consistent, unfortunately.” He blamed the administration of Bill Clinton for standing in the way of the Republican agenda for six years, and said that since then, the focus had been on national and homeland security as well as recovery from the September 11 terror attacks.
“These things needed doing, and they needed doing quickly,” Mr DeLay said. “Yes they were expensive, but they were necessary and time-sensitive, and, given the circumstances, we were right to err on the side of security over thrift.”
Posted by dan at 10:23 AM
Rory McGuire describes a very cool-sounding water-desalination/electricity generating venture in Australia in the Financial Times.
Two Australian companies are claiming they can turn ocean waves into drinking water at very little cost, thanks to a combination of their technologies. Energetech's initial aim was to generate cheap electricity using wave power but it realised that in teaming up with desalination specialist H2AU it could use the same power to produce potable water at a low cost. Ocean waves, so abundant and consistent, are a source of energy and energy is the main expense of any desalination process.Most desalination installations use electricity to create the pressure needed to drive a reverse osmosis system but the two Sydney-based, privately owned companies' combined technologies use wave pressure directly to power a reverse osmosis desalination plant. This unusual project avoids the multiple energy losses in converting wave energy to electricity before using the electricity to drive pressure pumps.
The entire operation can be run off the coastline, where the residual concentrated brine is released harmlessly back into the ocean and the only land connection is a pipe carrying potable water ashore. The process involves no fossil fuels, greenhouse gases or waste, say the companies.
The pressure source is an innovative wave energy system, the Energetech Wave Energy Plant, developed by Energetech.
To read the whole thing, you have to subscribe to the FT, which is well worth doing.
Posted by dan at 10:19 AM
Tom Friedman today rhapsodizes that China is set to become a great innovator and creator of intellectual capital.
"Confident that its best K-12 studnets will usually outperform America's in math and science, China is focusing on how to transform its classrooms so students become more innovative."He notes with approval Microsoft's creation of a research center with 200 Chinese reearchers and the innovations that Microsoft Beijing has created."
So that's 200 software dorks cranking out code in Beijing. I'm guessing that's an infinitesmal fraction of the Chinese workforce currently engaged in ripping off intellectual property through knock-offs, reverse engineering, theft, and piracy. And the only major crackdown on piracy surrounds the Olympic logo.
As Geoffrey Fowler reports today in the Wall Street Journal:
"BEIJING -- On the second floor of the Silk Street Market, Beijing's crowded counterfeit center, Xu Chao peddles knockoff Adidas, Mickey Mouse and Diesel T-shirts. But shoppers won't find fake versions of products bearing the 2008 Beijing Olympic Games logo at his stall or anywhere else at the market, a few steps from the U.S. Embassy."The penalties for selling Olympic items are several times higher than for other brands," Mr. Xu says. The red logo of a running Olympian is the one brand peddlers of fakes can go to jail for stealing, he says.
China is notorious as a knockoff haven, where poor law enforcement has turned a potentially huge consumer market into a land of 75-cent pirated DVDs and $10 fake Louis Vuitton handbags. Yet even amid growing consumer demand for 2008 Games trinkets, counterfeit Olympics goods are hard to find. Now, U.S. trade officials, business groups and intellectual-property lawyers want to know why the Chinese government can't make other counterfeit goods just as scarce. . . ."
Posted by dan at 10:08 AM
When Fox News asks me to come on their air, all they offer is a car service. Talking heads everywhere, take note: don't be afraid to ask for the jet!
The Wall Street Journal reports:
"FIRST-CLASS: PoliticalyMoneyLine notes Rep. Delay's expense report showing Fox News picked up $13,998.55 tab for his travel from Texas to Washington last month after his indictment. A Fox spokesman said the network hired a private jet to transport the former majority leader to an interview program."
Posted by dan at 10:06 AM
Today's award for unintentional irony goes to Rep. Jim Saxton (R-N.J.)
Speaking to Federal Reserve Chairman Alan Greenspan today, he said:
"The nation is in your debt."
It sure is. Greenspan's easy money policies have encouraged Americans to take on huge amounts of debt. And by giving his blessing to massive tax cuts, he encouraged the Federal Governement to take on record amount of debt. Thanks.
Posted by dan at 03:13 PM
The U.S. government is becoming a big shareholder in U.S. airline companies. Michael Schroeder reports in the Wall Street Journal:
WASHINGTON -- The U.S. government is on its way to becoming a big shareholder in the nation's airline industry and possibly in the auto industry.The Pension Benefit Guarantee Corp., the federal agency that partially guarantees traditional pensions, recently was awarded 7% of US Airways Group Inc. by a federal bankruptcy court handling the company's Chapter 11 reorganization, according to the PBGC's recent filing with the Securities and Exchange Commission. The agency got the shares as compensation for the underfunded pension plans it assumed when the company filed for bankruptcy.
The agency is likely to get an even larger stake -- between 15% and 35% of new shares -- of UAL Corp.'s United Airlines when it emerges from Chapter 11 in February, after 38 months in court protection, according to a PBGC official. And it's likely to get sizable chunks of Northwest Airlines, Delta Air Lines and Delphi Corp. -- if, as expected, the companies ask the bankruptcy courts to dump their pension plans on the insurer.
Taxpayers stand to benefit if the PBGC's stockholdings increase in value. Stock sales would bolster the agency's assets that are used to pay retirement benefits, and possibly forestall the need for a taxpayer bailout of the deficit-ridden federal insurer
The problem of course is that the government, which wound up with these equity stakes by default, has to find some other chumps to take the stock off its hands. And the Bush administration is smartly seeking to change the rules to allow foreign investors the opportunity to become big owners of U.S. airlines.
Jeff Bailey reports in the New York Times:
The Bush administration is proposing to allow foreign airlines and other foreign investors to control the management of airlines based in the United States, a move intended to attract capital to hard-pressed carriers.Jeff Shane, a Transportation Department official, said the proposed rule change could have a profound impact on the airline business here and abroad, by lowering barriers to global investment. The proposal comes as the administration is also seeking to offer European nations some inducement to open their markets further to American airlines.
Transportation Secretary Norman Y. Mineta can make the rule change after a 60-day public comment period. The change would not alter limits imposed by Congress for security reasons. Those include capping foreign investment in voting stock in any United States airline at 25 percent, keeping foreign representation on airline corporate boards and management teams at no more than one-third, requiring that an airline's president be a United States citizen and keeping all security and safety matters in the hands of a United States citizen.
Posted by dan at 11:25 AM
The 30-year bond is back. The Treasury Department quietly announced that it will start issuing 30-year bonds again in February, 2006.
What's more, there's another sign that for Republicans, victory in 2004 means finally coming to grips with the fiscal damage they've wrought.
Dow Jones Newswires reported yesterday:
"During a news conference yesterday, Treasury Undersecretary for Domestic finance Randal Quarles said he expects the government to bump up against the $8.184 trillion debt limit in the first quarter of 2006."
Posted by dan at 11:20 AM
I'm having difficult wrapping my mind around the case for a windfall profit tax on oil companies. Yes, the arguments expose those on the anti-capitalist left for bein silly. But it's making Republicans look even worse.
Carla Hoyos reports in the Financial Times.
In the US, where some senators called for a tax on the oil industry to fund the $3bn (€2.5bn, £1.6bn) needed to bring the Low Income Home Energy Assistance Programme (Liheap) to its $5.1bn target, the majority appears to favour goading companies into helping consumers, rather than enacting a new tax.
"Judd Gregg, Republican chairman of the Senate budget committee, on Wednesday said there was “not a great deal” of support for his recent proposal to impose a tax to help fund Liheap, which assists poor families in paying their heating bills. “It hasn’t got a lot of wind behind it,” he admitted.Charles Grassley, an Iowa Republican and chairman of the Senate finance committee, said he had sent a letter to oil companies in the hope of “embarrassing” them into contributing to Liheap. “You have a responsibility to help less fortunate Americans cope with the high cost of heating fuels,” the letter states, noting that the biggest oil and gas companies are expected to earn $96bn this year.
Lets set aside for the moment the idiocy of asking publicly held companies to contribute to a specific government program. Grassley has it all wrong. ExxonMobil doesn't have "a responsibility to help less fortunate Americans cope with the high cost of heating fuels." The government has that responsibility--if it chooses to assume it.
Grassley and Gregg think it's important for the government to provide an extra $3 billion in assistance to help low-income people pay their heating bills this winter. I couldn't agree more. So why can't they just put some money where their mouths and hearts allegedly are?
Grassley, Gregg, and their Republican colleagues spent more than $2.4 trillion in the recently ended fiscal year. The sum needed for LIHEAP is about one tenth of one percent of that total. They can easily fund LIHEAP fully by either adding a tiny marginal amount to the already huge deficit, or by cutting a tiny marginal amount out of the massive deficit.
Governing is about making choices. So far, Grassley, Gregg and their colleagues are choosing not to do much to help poor people deal with rising energy costs. Lamely asking the oil companies for help is a feeble way of deflecting blame.
Posted by dan at 11:07 AM
Excellent article on the front page of the Wall Street Journal by Greg Ip and Mark Whitehouse on excess global investment capital.
Money graph:
"There's an unprecedented wave of cpaital flowign around the world, with all of its owners anxiously seraching for a better return. World pension, insurance and mutual funds have $46 trillion at their disposal, up almost a third from 2000. In the same period global central-bank reserves have doubled to $4 trillion, adn other gauges of available capital have risen as well. . . "
Posted by dan at 11:04 AM
I guess it depends on the meaning of the word crisis. In his "Capital" column, David Wessel of the Wall Street Journal provides data and statistics showing that the U.S. health care system isn't in crisis.
"The fraction of Americans with government-provided health insurance has crept up during the past 15 years (27.2% in 2004 versus 23.3% in 1989) as the fraction with employer-provided insurance slipped (59.8% versus 61.1%) and the ranks of the uninsured have grown (15.7% versus 13.6%)."
He notes that workers are giving up their pay increases--and more--to pay for the rising costs of benefits.
And yet, he concludes, "The U.S. health-care system isn't yet in a full-fledged crisis, despite occasional breathless headlines."
He must not read his own copy, or his own paper much. Between 1989 and 2004, years of rising employment and enhanced productivity, health insurance became increasingly disconnected from employment. The government is slowly becoming the insurer of first and last resort. And while the nation spends about 15% of GDP on health care, nearly 16% of Americans aren't covered. Meanwhile, many companies that provide health care to employees (Delphi, GM) are either failing and faltering. And hospital companies like HCA essentially have to write off 14 percent of their revenues as bad debt. Nope. No crisis here.
Posted by dan at 10:58 AM
Great article in Business 2.0 by G. Pascal Zachary on do-gooder utility company AES's efforts to bring power and decent corporate governance to the Camerron.
Posted by dan at 10:25 AM
Jesse Eisinger, author of the Wall Street Journal's Long & Short column, has an excellent piece on shareholder-hostile Sovereign Bancorp. It's walled off behind the subscription wall, but here are a few choice morsels.
In what looks like a bid to counter a challenge from his largest shareholder, Sovereign Bancorp CEO Jay Sidhu has burned all of the Philadelphia company's investors. That shareholder, Relational Investors, contends the stock is underperforming and places the blame on Mr. Sidhu and a conflicted board of directors awash in Sovereign loans and business deals and overly generous pay. After signaling its intentions since May, Relational formally launched a proxy fight this month to replace two board members.A few days later, Mr. Sidhu announced a big deal: Sovereign will pay what most investors think is an outsize sum -- $3.6 billion -- for Independence Community Bank, a regional thrift. To finance that deal, Sovereign sold just under 20% of itself (in newly issued shares) to Spanish bank Santander. The structure of the deals accomplishes two things. It dilutes Relational's predeal 7.3% stake, and that of every other shareholder, because there are now more shares outstanding, thereby solidifying Mr. Sidhu's position via a friendly new partner. And, because Sovereign is paying cash for Independence and selling less than 20% of itself, neither deal requires shareholder approval. . . .
The real worry is that Sovereign has done all this just to thwart Relational, and that Mr. Sidhu's board is letting him. As Relational head Ralph Whitworth is fond of saying, "This is a pre-Enron board in a post-Enron world."
For a close look at that world, frolic through Relational's proxy filing. Loans to Sovereign directors and executive officers have risen to $94.1 million, from $4.7 million six years ago. The bank offers no relevant disclosure about the loans, including terms, interest rates or performance. Relational discovered the full extent of them only by cross-referencing Sovereign's Securities and Exchange Commission filings with records at the Office of Thrift Supervision. In its most recent quarterly SEC filing, Sovereign left off about $24 million worth of loans. Sovereign says the SEC filings excluded credit extensions that haven't been drawn down.
Mr. Sidhu says all the loans comply with federal rules and haven't been made on terms not available to other customers. He says most of the loans are not to directors of the holding company, Sovereign Bancorp, but to directors of its subsidiaries. Loans to the parent company's directors are an "insignificant percentage."
So why not disclose the details? "We will disclose them at the right time," he says.
When not drawing fine distinctions about its disclosures, Sovereign -- poof! -- at times makes them disappear. Sovereign and its subsidiaries for years have paid office-space rent to one of its directors, Cameron Troilo. The payments skyrocketed to $618,700 in 2001, from $68,544 in 1996. Since 2001, however, Sovereign's filings have included no specific figures, just vague reassurances. Mr. Troilo's independence is unaffected, its latest filing says, because "the amount of rent paid ... was not material" to Sovereign or the director. Mr. Sidhu reiterates that point. Mr. Troilo didn't return a call."
Posted by dan at 10:14 AM
A horrible month for Detroit. The Big Three saw their collective market share fall to about 52 percent, a record low. GM's sales fell 25.6 percent in October 2005, compared with October 2004. Ford sales fell 26.1 percent from the year-ago month.
Toyota, again, did well. It sold 9.939 Priuses and 1,904 Lexus hybrids, for a total of 11,843, or 6.8 percent of total unit sales.
Honda had a good month, too. But hybrid sales were pretty small: 1,504.
In its monthly report, Ford didn't break out the number of hybrids it sold.
Posted by dan at 10:03 AM
Bush partisans who are crowing about the temporary decline in the federal budget deficit in 2005 might want to check out Jennifer Hughes's article in the Financial Times today. The deficit is on the way back up.
"The Treasury said on Monday that it expected to issue a record $171 bn in marketable debt -- bills and coupon-bearing bonds -- in the first quarter next year.This figure, net of refinancing, is up from $144 bn in the same period in 2005 and $146 bn a year earlier, the previous record quarter.
Overall borrowing for the fiscal year to September 2006 would reach $350bn compared with $216bn in fiscal 2005, the Treasury said, but would remain below the $380 bn seen in 2004."
Left unsaid in this piece: the interest rate taxpayers will be paying on this debt will be markedly higher than the rates on debt issued in the past few years. Our collective interest bill will be rising at an even more rapid pace than our collective debt.
Posted by dan at 10:00 AM
Hedge fund Private Capital Management is urging newspaper publisher Knight Ridder to put itself up for sale. But the reasoning is pretty silly. The hedge fund notes that the company’s stock has declined, even though it has increased its dividend, sold assets, and bought back shares. It notes that there is “limited revenue growth across the newspaper industry.”
Note to Private Capital: the “limited revenue growth across the newspaper industry” is why Knight-Ridder’s shares – and those of other newspaper companies – have been struggling. And it’s also why putting the company up for sale probably wouldn’t stimulate the type of auction that will allow Private Capital to realize huge gains on its shares.
Think about who will buy? Will newspaper companies like the New York Times Co. want to increase their exposure to a tough industry? Nope. Will other media companies like Comcast or News Corp. want to increase their exposure to a slow-growing, low-margin industry? Again, no. Will private equity firms want to borrow tons of money to buy Knight-Ridder? Doubtful. The business case for an LBO rests on reliable, increasing cash flows to service debt and an exit strategy—i.e. a sale or an IPO. But if current trends continue, newspapers’ cash flows will likely stagnate or decline over time. And if current trends continue, who will want to buy Knight-Ridder’s newspapers in 2010?
Posted by dan at 09:57 AM
Two pieces of news that illustrate the difficulty of managing and maintaining performance when your revenue and/or asset base gets really huge.
1. Dell's disappointing quarter.
2. Fidelity's gigantic Magellan fund goes through another manager as it continues to underperform.
Posted by dan at 10:37 AM
My latest in Slate on the impending tax reform proposals and who they may hurt.
Posted by dan at 10:31 AM
On the cover of the New York Times Magazine, Roger Lowenstein offers an elegant, reported take on cram-down nation.
Posted by dan at 10:00 AM
Globalization is continuing apace. But it's naive to think that the the U.S. will continue to benefit disproportionately from the moves. A few items from today's papers should lead us to be less sanguine about the U.S. sense of triumphalism in the flat world.
1. A huge commodity-producing company in an emerging economy plans to raise nearly $900 billion in an initial public offering. But New York's exchanges and underwriting industry won't see much business as a result.
Rebecca Bream reports in the Financial Times:
Gold mining company from Kazakhstan will today announce plans to list on the London Stock Exchange with a targeted market capitalisation of more than £500m. Kazakhaltyn, one of the country's largest gold miners, plans to raise at least £100m at the end of next month.It follows this month's successful London flotation by Kazakhmys, the copper group, which raised about £700m, and will add to the number of companies from Asia, Russia and eastern Europe that have London listings.
About 25 per cent of the family-owned KazakhGold, Kazakhaltyn's parent, is to be sold via a placing by ING.
2. Also in the FT, Niraj Dawar lays out the case for the coming Sino-Indian trade boom.
3. Joann Lublin has a good piece in the Wall Street Journal today. She notes that while leading U.S. companies are increasingly reliant on foreign markets for growth, revenues, and profits, comparatively few of them have brought foreigner into their boards.
"Around the world, corporate boards are going global. Driven by a surge in cross-border takeovers, the clamor by shareholders world-wide for improved corporate governance and a rising pool of senior executives with overseas experience, multinational businesses increasingly are tapping directors from outside their home countries.Advocates say the broadened geographic reach brings new perspectives to the boardroom. Yet many U.S. companies haven't gotten the message. A 2005 survey by recruiters Spencer Stuart found that only 35% of 149 large U.S. businesses have at least one non-American director, a modest rise from 31% in 1999.
By contrast, about 90% of Europe's largest concerns by market capitalization boast one or more directors from outside their home country. At about 49% of those 99 companies, there is at least one American on the board, up from about 35% in 1999, according to an analysis for The Wall Street Journal by search firm Heidrick & Struggles International Inc.
That may put U.S. companies "at a disadvantage in the global marketplace," says Gavin Anderson, president and chief executive officer of GovernanceMetrics International, a governance ratings and research service in New York. Any major American company with significant sales abroad needs "at least one individual on the board who represents the views of the rest of the world," Mr. Anderson says.
The lack of foreign directors also means management "may make bad decisions" about international expansion, suggests Stephen Mader, head of the board and CEO practice for recruiters Christian & Timbers in New York. He cites Walt Disney Co., which had an all-American board until this year, as "a dramatic case of failure." EuroDisney SCA, 40%-owned by Disney, has struggled to make money since the first of its two French theme parks opened in 1992. Disney officials "totally misestimated the kind of reception they would get for an American entertainment institution in France. It took them years to re-engineer that." A Disney spokesman declined to comment beyond saying he couldn't confirm whether the board previously had a non-U.S. citizen."
Posted by dan at 09:54 AM
This would be funny if it weren't so sad. Trying to demonstrate resolve about spending after running up trillions in new debt in the past five years, the Republicans in Congress are getting on spending--by slashing less than a billion dollars from the food stamps budget.
David Rogers reported in the Wall Street Journal on Friday.
"The House Agriculture Committee voted to cut $3.7 billion from farm and food-stamp programs, as Republicans put in place the last pieces of a deficit-reduction bill promising nearly $50 billion in savings over five years.An estimated 300,000 low-income individuals could be denied benefits under the $844 million in food-stamp reductions. The committee approved the spending cuts 25-20, after the House Energy and Commerce Committee late Thursday night approved billions in savings from Medicaid, the federal-state health-care program for the poor and disabled. . .
Friday, the U.S. Department of Agriculture released a report showing the number of American families struggling to put food on the table had jumped by nearly two million to 38.2 million in 2004 from 2003 levels. Those hardest hit by the cuts in the food-stamp and Medicaid programs would be low-income working families -- the same households Republicans sought to move off welfare under changes set in the 1990s. . .
Among the food-stamp cuts Friday, $569 million in savings would be achieved by limiting the flexibility states have to simplify eligibility rules for families transitioning from the Temporary Assistance for Needy Families. About 225,000 people could lose benefits, including 40,000 children who could lose eligibility for the school lunch program. Many are from working poor families with gross incomes just above the food-stamp cutoff -- 30% above the poverty level, or about $25,100 for a family of four -- but qualifying under state rules. The second major food-stamp cut would apply to legal immigrants, who otherwise qualify under the income rules but have been in the U.S. less than seven years. Under current law, a legal immigrant can apply for food stamps after five years. The bill would extend the waiting time to seven years, denying benefits to an estimated 75,000 individuals for a five-year savings of $275 million."
So lets see: real incomes are falling, and the prices of food is rising. According to the Bureau of Labor Statistics, the food component of the CPI is up 2.5 percent in the past 12 months, substantially higher than the 2.0 percent core rate.
How far will that $844 million go toward reducing the deficit. A clue: the national debt has surpassed $8 trillion.
Posted by dan at 09:44 AM
Fortune's current issue features a good cover story on Tom Barrack, a huge real estate investor who is cashing out of his richly priced U.S. commercial and residential holdings and looking to put cash to work overseas.
Barrack isn't alone. Jim Pickard reports in the Financial Times:
GE Commercial Finance Real Estate, the world’s largest property business, is to spend $5bn in Asia and $3bn in Mexico as it ramps up its exposure to the markets.The group, part of GE Finance, the banking arm of GE, plans a spending spree on property in the next two years in more developed countries such as Japan, Korea and Australia. This would mark a huge increase from GE’s current Asian property holdings of about $3bn, Michael Pralle told the FT. . .
GE Commercial Finance Real Estate directly owns $35bn of global property, $50bn including joint ventures and securitised debt.
The business has increased its international exposure considerably, from 25 per cent five years ago to more than half today.
The move to Asia and other newer markets such as eastern Europe and Mexico, comes amid fears that US commercial property has peaked. GE has cut its US property exposure from $12bn to $6bn in the last three years, Mr Pralle revealed.
Posted by dan at 09:37 AM
It's pretty easy for journalists working for great publications like Barron's to get mutual fund managers on the phone. After all, it's a great venue in which to push your macro-views, or to plug stocks you like.
Maybe the phones weren't working so well this week. Because in looking through Barron's front section, it seems like the connection to Mario Gabelli was one of the only ones that was working.
First, Gabelli is quoted on page 12, with a generic quote about how this is a good time to stocks. "We are in a pause that refreshes. The economy is not so bad, the consumer will be OK. The market should be up 7% to 9% next year, but it will be much more volatile." (With this kind of analysis, you can understand why he gets the big bucks.)
Gabelli, who is a member of Barron's investing roundtable, showed up again a few pages later, plugging SWS Group, a Texas-based brokerage firm in which his firm owns about 4 percent. A few pages later, one of Gabelli's colleagues, Larry Haverty, a portfolio manager at Gabelli Global Multimedia Trust, was plugging Vivendi, one of the fund's top ten holdings.
Barron's parent company, Dow Jones, has been mystified and confused that financial services advertising has remained muted in the past few years. But hey, when you can get this kind of concentrated free ink, who needs advertising?
Posted by dan at 09:31 AM
A small piece by me in this week's New York magazine on the fate of some conglomerates.
Posted by dan at 09:17 AM