Tag Archives: investment

Banks Revive Risky Loans and Mortgages – NYTimes.com

19 Apr

Boys and their toys:

The alchemists of Wall Street are at it again.

The banks that created risky amalgams of mortgages and loans during the boom — the kind that went so wrong during the bust — are busily reviving the same types of investments that many thought were gone for good. Once more, arcane-sounding financial products like collateralized debt obligations are being minted on Wall Street.

via Banks Revive Risky Loans and Mortgages – NYTimes.com.

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Tech is Over

19 Jul

Google is sitting on 10s of billions in cash and has no idea how to invest it. Microsoft and Apple are the same way. See the discussion at Marginal Revolution.

How about a guaranteed income floor for everyone and a 20 hr/week job for everyone who wants it? The 19th century ended a long time ago, folks.

How Investing Turns Nice People Into Psychopaths – Lynn Stout – Business – The Atlantic

4 Apr

… even though most of us are not conscienceless psychopaths, when we make investing decisions we often act as if we are. This observation casts an interesting light on Joel Bakan’s award-winning 2004 documentary The Corporation.” In that film, Bakan argued that because corporate managers believe they must maximize shareholder wealth, a corporation is a “psychopathic creature” that “can neither recognize nor act upon moral reasons to refrain from harming others.” To the extent this is true, shareholders themselves may be largely to blame. As University of Toronto law professor Ian Lee puts it, “if corporations are in fact ‘pathological’ profit-maximizers, it is not because of corporate law, but because of pressure from shareholders.”

The ideology of shareholder value drives corporate managers to make business decisions contrary to prosocial shareholders’ true interests. Of course, some shareholders may indeed be purely self-interested actors–psychopaths–who don’t mind if their companies deceive consumers, maim employees, or pollute the environment. But the hard evidence indicates the vast majority of us would prefer to tolerate at least somewhat diminished returns to avoid such results. And most studies find that SRI investing erodes investors’ returns only slightly, if at all. Shareholder psychopathy is neither natural nor inevitable but an artifact, the unfortunate outcome of collective action obstacles combined with the ideology of shareholder value.

via How Investing Turns Nice People Into Psychopaths – Lynn Stout – Business – The Atlantic.

Insight: The Wall Street disconnect | Reuters

19 Nov

With U.S. cities moving this week to crack down on Occupy Wall Street encampments – including the one in New York’s Zuccotti Park – the staying power of the movement is in question. Whatever its future, it’s clear that so far, the Occupiers haven’t changed many minds on Wall Street over blame for the country’s hard times. The cognitive disconnect between the protesters and the captains of finance is alive and well.

David Mooney, chief executive officer of Alliant Credit Union in Chicago, one of the nation’s larger credit unions, used to work at one of Wall Street’s top banks, JPMorgan Chase. There’s a vast cultural gap between Wall Street and his new world, he says: Old friends from the Street, he says, now jokingly refer to him as a “socialist.” A credit union is supposed to be run in the interests of all members, he says, while commercial bankers tend to see consumers as customers who can be “exploited” by layering on more fees.

via Insight: The Wall Street disconnect | Reuters.

Sisters of St. Francis, the Quiet Shareholder Activists – NYTimes.com

14 Nov

Wonderful!

In 1980, Sister Nora and her community formed a corporate responsibility committee to combat what they saw as troubling developments at the businesses in which they invested their retirement fund. A year later, in coordination with groups like the Philadelphia Area Coalition for Responsible Investment, they mounted their offensive. They boycotted Big Oil, took aim at Nestlé over labor policies, and urged Big Tobacco to change its ways.

Eventually, they developed a strategy combining moral philosophy and public shaming. Once they took aim at a company, they bought the minimum number of shares that would allow them to submit resolutions at that company’s annual shareholder meeting….That gave them a nuclear option, in the event the company’s executives refused to meet with them….

“You’re not going to get any sympathy for cutting off a nun at your annual meeting,” says Robert McCormick, chief policy officer of Glass, Lewis & Company, a firm that specializes in shareholder proxy votes. With their moral authority, he said, the Sisters of St. Francis “can really bring attention to issues.”

via Sisters of St. Francis, the Quiet Shareholder Activists – NYTimes.com.

A declaration of independence — from Wall Street – American Spring – Salon.com

2 Nov

The same principle can work for investment. Ian Galloway, a senior associate specializing in community development at the Federal Reserve Bank of San Francisco, envisions a compelling future.

“I can imagine a world not too far down the road,” says Galloway, “where you can walk down the street and pass a blighted piece of property, take a photo of it with your smartphone, click your CDFI [Community Development Financial Institution] app and have that photo geo-coded and sent to the local CDFI with your 25-dollar investment in the predevelopment loan that would cause that property to be redeveloped.”

via A declaration of independence — from Wall Street – American Spring – Salon.com.

Real Returns, Sustainable Communities

11 Mar

In the Spring of 2010 three executives in New York University’s CleanTech Executives Program, conducted a field survey and study on locally-driven sustainable energy initiatives: Wendy Brawer, Brett Barndt, and Lakis Polycarpou, Real Returns for Sustainable Communities: White Paper, Linking Communities and Investors for Sustainable Development (downloadable PDF of the complete study). They were particularly interested in how such projects could be financed:

Our survey found that investment professionals are interested in local sustainable development projects as a potential asset class. As one professional put it, “Local infrastructure projects like these are very suitable to our investor profiles.” Project finance professionals also said that they expected the sustainable development industry to “grow immensely,” and the key is to “build a platform” for growth.

What then is needed to increase adoption of cleantech and sustainable development projects? “We need to get beyond the bias we have toward centralized energy sources,” and develop ways to get small projects funded, said one professional.

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