Private Equity and the Ownership Decision

Aus Tom Davenport’s Blog bei der Harvard Business School Press:

few months back I wrote about micro-decisions and how they can add up to macro money. But as a student of decision-making I would be remiss if I didn’t point out that one big decision — who will own an organization — has a massive effect on performance, culture, and organizational effectiveness.

I’m prompted to post on this topic because of two contrasting experiences of late. One is that I’ve been doing some research on private equity and what a bloody mess it has made of many of the companies it has taken over. The other is a recent visit to SAS, the privately-held company that dominates the market for analytical software.

Private equity is in shambles now, and deservedly so.

Krugman’s Rearguard Apologists

Aus Mises Daily.

As most readers will know, a collection of damning quotes has surfaced recently, exposing Paul Krugman, the doyen of the economic Left, as having been completely backward on the most material economic event in our generation: the housing bubble. My recent article on the subject, „Krugman’s Intellectual Waterloo,“ has elicited some pretty heated rearguard apologetics, which, in the present article, I’d like to sum up and knock down.

The paradox of thrift — for real

Aus Paul Krugman’s Blog in der NYT:

The paradox of thrift is one of those Keynesian insights that largely dropped out of economic discourse as economists grew increasingly (and wrongly) confident that central bankers could always stabilize the economy. Now it’s back as a concept. But is it actually visible in the data? The answer is, and how! 

Credit Crunch in the Eurozone: Bank Lending to the Private Sector Starts Contracting

• ECB June Monthly Bulletin: Loans to non-financial corporations slowed to 4.4%y/y in May 2009 from 5.3% in April 2009, with the monthly flow turning negative by EUR5 billion. Loans to households declined on a year over year basis by 0.2% in May after recording zero growth in April.

• Wolfgang Munchau: „Companies who file for bankruptcy increasingly blame the banks, and the number of bankruptcies is rising rapidly. The problem is that the trillions of dollars and euros in liquidity are not getting through. There is no point in blaming the banks. In fact, banks act responsibly when they deny credit to customers whom they judge to have lost creditworthiness.“ (Financial Times)

Regulators Closing Speculative Loopholes in Commodity Markets

• The U.S. Commodity Futures Trading Commission (CFTC) will hold hearings on new rules that might include position limits, including on commercial traders who are hedging exposure to physical deliveries and increased transparency across commodity markets. Following increased volatility in energy markets, regulators are aiming to close loopholes that have contributed to speculation including improving coordination among regulators

• CFTC instituted position limits on wheat and some agricultural commodities in 2008 but has granted some exceptions. There are no position limits on energy commodities