Another Ponzi scheme exposed in Fraud Lauterdale

Yep, another Ponzi has been exposed. Though not quite in Madoff's league, it is still a big one at $1.2 billion. One Scott Rothstein created a large 70-lawyer law firm in Florida where he used the scheme to buy influence. According to news reports, he made generous donations to political campaigns, owned "hundreds" of cars, homes, jewelry, watches and businesses. He used the faux wealth to hobnob with politicians, sports celebrities and support an extravagant lifestyle. When discovered, he got on a private jet and fled to Morrocco with $500,000 in cash after wiring $16 million to Casablanca.

Keynes vs. Hayek

Yo yo yo! Rap style!



Word.

Obama proposes bank taxes, reforms

A couple of thoughts on the proposals this week. Let's start with this proposed "bank tax". Given the outrage centered around bank bonuses, the tax is supposed to penalize the banks for requiring government help last year (in the form of TARP). The idea is that the banks benefited from TARP and TARP will probably lose money on some portion of its loans, therefore we'll tax all banks to make up any shortfall to the return of taxpayer funds.

Google's threat to pull out of China: What does it have to lose?

So Google threatens to pull out of China.

What does it stand to lose? The most obvious answer is it loses out on 1.3 billion people to click on Google ads. Like any business Google has to weigh the cost of complying with local regulation versus the profit or potential profit.

It's January, so that means more of the January indicator myth

Every January, without fail, the financial press haul out their stock articles about the January indicator*, update a few numbers and voila! another article done for the month. The WSJ ran a piece about this "bellwether indicator". As expected, journalists got it wrong and only promoted the often quoted myth. If the WSJ can be lazy enough to post the same old tired article, I can take a few sentences to point out again why this particular bit of Wall St. lore is wrong.

Market Rally Explained by Fed/Treasury Conspiracy

Ah, the first grand conspiracy theory of the new decade. That's what my email tells me anyway. A friend informed me about a story that a major Wall St. research shop has publicly said it thinks the Fed and Treasury are behind the massive stock market rally of 2009. According to sources (the WSJ's MarketWatch and Financial Times), founder and CEO of TrimTabs, Charles Biderman, claims that the money required to raise the market so much could not be accounted for, hence the government must have done it. I'm paraphrasing of course, so let's see what he really said:

Think for Yourself, Buffett Style

We've written twice about the pending hostile takeover of Cadbury by Kraft. As an illustration of the Agency Dilemma or principal-agent problem and a quick followup. The story continues to remain interesting (at least to me- hey, I find this stuff dramatic, ok? Some like football, I like hostile takeovers. Call me a finance nerd!) Anyway, Kraft's largest shareholder is none other than Warren Buffett's Berkshire Hathaway. Berkshire owns some 9.4% of the company, a significant voting block. Kraft just sent out proxies for a "special shareholder meeting". "Special" shareholder meetings are not, as one might assume, some grand event to celebrate the company's success complete with band, sushi buffet, dancing and balloons.

Reflecting on Y2K. Ten years on. Thirty eight years on.

I used to write an Internet column for a daily newspaper in Toronto. I started writing it in 1995. Back then web browsers were new fangled ways to access the Internet, although I was certain the Web was just a fad and Gopher and FTP were the way to go. To toot my own horn, I was the first person in Canada to write a regular column about the Internet for a Canadian daily paper.