One of the most celebrated IPO’s in recent business history will likely be completed tomorrow. Underwriters bought all the shares on offer from GM today and will resell them to individual and institutional investors over the next few days.
But the Wall Street Journal notes some serious risks at the new company and my recent Research Note on the GM/UAW VEBA points out the continuing ties between GM and autoworker retirees.
Writing on the Wall: Putting the Brakes on the GM IPO Fervor – WSJ.com.
The international human rights movement can claim an important victory today with the release from a long house arrest of Nobel Peace Prize winner Aung San Suu Kyi, the leader of the Burmese democracy movement. Coming as it did in the wake of the granting of this year’s Nobel Prize to Chinese imprisoned human rights activist Liu XIaobo it is a sign of the weakening of China’s hold on Asia generally. China has been a big financial supporter of the Burmese military dictatorship and had reacted harshly when Xiaobo was given the Prize.
Many thousands of people around the world took part in the various campaigns to support Suu Kyi’s release.
Here in the US, I helped out in a small way during a legal battle against oil giant Unocal which relied on the Burmese military to dragoon Burmese workers into helping build a natural gas pipeline. The suit led to a successful financial settlement to benefit the Burmese people. The international labor movement pressured the regime through the ILO and the UN system. And so on. This loosely organized but global effort has shown it can face down the most repressive of regimes.
It can only be hoped that the emergence of a democracy movement in Burma can in turn encourage efforts in Vietnam, China and elsewhere in Asia.
Michael Lind of the New America Foundation puts his finger on something deeper afoot in the wake of the electoral debacle for the liberal left.
He points to the tension between class politics that animates working class voters in Europe and the US versus the “multikulti” politically correct green politics so much in favor with the Democratic Party elite.
Here is one snippet:
“In general the parallels between the U.S. and Europe are striking. In
the U.S., as in Europe, the right is divided between a pro-business
right promoting policies of austerity and a populist, nativist right
energized by opposition to immigration and multiculturalism,
particularly where Muslims are involved. In the U.S., as in Europe,
the upper-middle-class activists and intellectuals of the center-left
devote far less energy to traditional social democratic issues like
social insurance and the minimum wage than to non-economic causes like
renewable energy, mass transit, the new urbanism, gay marriage,
identity politics and promotion of amnesty for illegal immigrants. On
both continents, conservatism is becoming more downscale while
progressives are increasingly upmarket.”
Why center-left parties are collapsing – War Room – Salon.com.
Unfortunately, too few details in this story but it confirms what I said yesterday – that the NY Times had it wrong and late. The conflict over unionization of The Hobbit appears to have been settled but Jonathan Handel is suggesting that terms do not favor the unionization of film industry workers.
Where was the Times when this was a labor dispute? Now it seems they are just trying to stir up trouble. As the story indicates, the labor issues have been settled.
Still think we are fighting the “good war” in Afghanistan?
Think again. (Hat Tip: Pundita)
Iran Is Said to Give Top Karzai Aide Cash by the Bagful – NYTimes.com.
For me this is very sad and personal news. Benoit and I had become friends over the last several years, having numerous long conversations about the very wrong turn that economics had taken. He was a brilliant and unusual man whose unorthodox career path nonetheless resulted in fundamental contributions to science and social science that will last for many years. Thus, I have edited the title to the Times obituary from “mathematician” to “polymath.”
Our friendship began when he called me out of the blue one day in response to an email I had sent him about the strange approach the U.S. Supreme Court took to the theory of market efficiency. He was amazed to hear that law professors at his own institution, Yale, actually seemed to believe and teach that markets were efficient.
While Benoit is best known to the wider world for his work on fractals (an example, the “Mandelbrot set” is pictured above), it was actually his earlier foundational work on how prices behaved on the world’s cotton markets that I was interested in. In fact, that work helped lay the basis for his discovery of fractals.
He found in his analysis of price behavior that in fact markets could behave in wild and very difficult to predict fashion. Any idea of smooth and continuous markets, the basis of the theory of efficient markets, was foreign to him. He began a lifelong interest in “roughness” that eventually led to fractals. This work alone should have earned Mandelbrot the Nobel Prize in Economics. You can listen to him explain his views here and here.
My current research project on the behavior of stock exchanges was inspired by Mandelbrot’s ideas. In particular, he noted in response to the recent financial crisis that there is an absence of “inertia” at work in the markets and thus the kinds of large price moves we have seen in recent years, up and down, are to be expected.
My co-author Jenny Kuan at the Stanford Institute for Economic Policy Research and I have been trying to determine if, in fact, good institutional design of capital markets can create a kind of “synthetic inertia” that indeed could help establish more reliable exchanges. If so, then we could have a lower cost of capital and perhaps a healthier economy.
We had hoped, of course, to engage Benoit in a discussion of our results. Sadly, that will not happen.
Everyone knows that Hewlett Packard is on a buying spree these days, but I had not realized they had set their eyes on the Wall Street Journal.
The other day the Journal’s All Things Digital website slammed fellow business journalist Joe Nocera of The New York Times for an appearance of a conflict related to his columns on the HP CEO fiasco.
But it turns out the Journal’s reporter on the story, Kara Swisher, has her own conflict that she failed to tell readers about. And the Journal now appears to be engaged in a rewriting of the history books to erase any effort to explain this to its readers.
Remember Spygate, HP’s undercover operation against its own board and journalists? Well, now we have Hurd-gate, according to Mike Arrington at TechCrunch.
Stung twice, first by their abrupt dismissal of star CEO Mark Hurd for what appeared to most people to be a personal failing (his involvement with an HP marketing contractor) and second by their hiring of a failed CEO to lead the country’s largest technology company, the board has now gone on the offensive against business reporter Joe Nocera of The New York Times.
As I noted here a few days ago, Nocera pointed out the hypocrisy of the board for dumping Hurd for relatively minor ethical issues while hiring Leo Apotheker, whom SAP fired after 8 months as their sole CEO (he held a co-CEO position for longer).
Apotheker it turns out was CEO of SAP while SAP was stealing software code from competitor Oracle.
Nocera wrote an earlier column calling the HP board “the most inept in America.”
Unable to make the business case for the hiring of Apotheker, Arrington says the HP directors are going after Nocera instead, first through a guy named Ben Horowitz. Horowitz was CEO of a company called Opsware (formerly LoudCloud) which was chaired and co-founded by Marc Andreesen. Horowitz and Andreesen arranged the sale of Opsware to HP in the summer of 2007 for $1.6 billion. Andreesen eventually got appointed to the HP Board. Horowitz quit HP after a year and he and Andreesen formed a venture capital fund.
Tears certainly came to my eyes as I watched the rescue effort tonight.
I recalled working side by side with an exiled Chilean miner on an assembly line in the late 70s in northern California. A refugee from the Pinochet dictatorship, we worked together in an electronics plant for several months.
I helped him get the job, as a gesture to friends in the Chilean solidarity movement, and he could ill afford to lose it, but when a battle broke out with management – intent on shutting down the plant and shipping our jobs to a non-union state or overseas – he stood with us, without any doubts.
He spoke no English and only a little Spanish, as he was of Indian descent. But we understood each other. There was a toughness about him that I knew you could only be born with.
I am not surprised that his brothers have survived this ordeal.