Jamesian Philosophy Refreshed

I generally ask myself at this time of year what were the biggest stories of the past twelve months in business/financial news. Of course, I choose the ones I do largely because they illustrate an important theme, and in the list below I'll spell out and italicize the theme. Yet the theme itself isn't the story.  Further, I cannot help the fact that in the list as below currency issues keep coming up. That is a fact about the year, not I think about my biases. All that said, here is this year's list. January 2013:  The tablet/smartphone wars. Announcement of the BlackBerry 10 from Canadian concern RiM. Concurrently, RiM changes its name to BlackBerry. This will be their big final bid to remain a player on the level of Apple and the Android group. It will fail. February 2013:  Currency as policy. A G-20 finance ministers' meeting in Moscow, Russia, focuses attention on competitive devaluations. Japan escapes explicit censure at...

To our earlier discussions in this blog of the various items on a balance sheet we must add this: many important liabilities and assets – important, that is, for the future of the company – never get on the balance sheet at all. The rules governing what may be kept “off book” generated a good deal of controversy associated with the demise of Enron at the turn of the millennium. Enron, you may remember, created special purpose entities (SPEs) and supplied these off-book entities with Enron stock. Then it dealt with those entities in ways that spruced up its own books.   The SPEs could be kept off book, under then extant rules, so long as 3 percent of their equity belonged to someone who was neither Enron nor an Enron “related entity.” The 3 percent figure may seem modest under the circumstances. But the point of it was that someone else had to be willing to put their own investment at risk. Indeed, as a matter of corporate law throughout the English speaking world, a ...

I left off this chronology/linkfarm on Friday morning (eastern time) March 22, mentioning tough talk from Germany at that time. So we resume there.  That was also the morning when Greek banks swooped in to buy the units of Cypriot banks that operated in Greece.  For some reason this seemed to calm world markets. A bit later Friday, an EC spokesman, Simon O'Connor, announced "an improved spirit of cooperation on the part of the Cypriot authorities." Its parliament passed a law allowing it to restructure the failed  Laiki Bank , separating some of its assets into a so-called "bad bank." Under this plan, uninsured depositors would lose up to 40 percent o their savings, though the insured deposits would remain protected within the "good" bank. But this still left the question of raising the bail-in money that the Troika demanded . And by this time the crisis in Cyprus had analysts wondering about the next domino. One emerging markets researcher, ...

The Cyprus/bank/bailout story is big. Really big . Too much for me to handle in my own voice just now. So I'll just provide a few links, following chronological order, in this post and the next. The above photo is Cyprus' finance minister, Michael Sarris. By February 28, Cyprus was clearly 'next up,' the new center of the ever-shifting limelight in Europe's traveling crisis over banks and sovereign debts. The new president of Cyprus, Nicos Anastasiades, said that day that though Cyprus would have to negotiate terms of a bail-out, "no reference to a haircut on public debt or deposits will be tolerated." A big EU meeting in Brussels began on March 3d, and involved a good deal of discussion of the matters that Anastasiades had tried to wish off the table. Skipping ahead a bit ... by March 14th, EU officials, as well as those from the IMF, were in round-the-clock talks on a bail-out of Cyprus that would include a depositor sacrifice, known politel...