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A new study by three academics concludes that Sarbanes-Oxley hasn't killed the U.S. markets. Who is going to break the news to Henry Paulson, Glenn Hubbard, AEI, etc.? Here's the report. Greg Ip reports in the Wall Street Journal:
In recent months, policy makers and business groups have argued that post-Enron regulatory burdens have made U.S. markets less competitive -- citing as proof the many foreign companies that list their shares in London instead of New York.Now, three academic pioneers in the field are casting doubt on the assertion.
In a new study, they conclude there is no evidence the much-criticized 2002 Sarbanes-Oxley Act, which beefed up corporate accounting and financial disclosures, among other things, increased London's appeal to foreign companies at New York's expense. The study looked at thousands of companies that either listed, or didn't list, their stocks on various U.S. and London markets from 1990 to 2005.
The research also found that investors are still willing to pay a sizable premium for foreign-company shares listed in the U.S., in return for meeting tough U.S. regulatory standards. Foreign-company stocks in London receive no similar premium, they said.
The researchers also say the decline in new foreign listings on U.S. stock markets since 2001 isn't due to regulatory overkill. Rather, today there are simply fewer foreign companies that fit the historic profile for listing abroad: namely, larger, faster growing and less indebted companies from countries with stronger legal protections.
Posted by dan at 11:28 AM
My latest in Slate, on the backlash against bottled water.
Posted by dan at 09:06 AM
You've heard of options on the SOX, the Philadelphia Semiconductor index. Now there are options on the LOX. Robert Anderson and Gillian Tett report in the Financial Times on salmon options:
Financial investors can plunge into a new exotic derivative on Tuesday when for the first time the Fish Pool exchange in Norway will offer cleared futures contracts for fresh salmon.The move highlights the increasing sophistication of the salmon industry, which is one of the most industrialised seafood sectors.
Coming up next month: forward puts on sesame bagels, and swaps on chive cream cheeses.
Posted by dan at 01:51 PM
The new Conde Nast Portfolio magazine is out. It's big and beautiful and represent a welcome investment in old-fashioned journalism, in print and on-line. I say this not just because my article on American billionaires buying British soccer teams appears on the website, or because the inaugural issue features a nice, brief review of my forthcoming book. Well, maybe I say this partially due to those two factors.
Posted by dan at 09:43 AM
My latest in Slate, on candidates as stocks. Also in today's Washington Post "Outlook" section.
Posted by dan at 09:24 AM