Some two dozen executives from large corporations will be descending on Capitol Hill today to make the case against over-regulating derivatives. The “fly-in” is being organized in part by the U.S. Chamber of Commerce through a group called the Coalition for Derivatives End-Users, according to the Chamber’s Ryan McKee. Many corporations use derivatives to hedge against fluctuations in the price of their inputs—for example, an airline might sign a contract to lock in future fuel prices, thereby passing the risk along to someone else.
The shock of the financial meltdown has had congressional committees scrambling for their gavels for the better part of a year. Politicians have been discussing how to make sure that such a near-cataclysm never happens again, and, for the most part, they've focused on the need for new regulation.
In 2001, an entrepreneur named Tom Casten traveled down to southern Louisiana, near the small town of Franklin, with a clever idea. For decades, the area had sustained a pair of chemical plants that produced carbon black, a grimy powder used in printer ink and tire rubber. But the owner of one of the plants, Cabot Corporation, was struggling to compete against cheap tire imports from abroad, and desperately seeking ways to cut costs. That’s where Casten came in. He pointed out that the gas left over from the carbon-black process was just getting wasted--burned off and flared up into the sky.
Beware the intern you just sent on a coffee run. And not just because she may use the yellow sweetener instead of the pink. No, beware the intern because as easy as it is to punk her around now, this pleasure, like smoking or drinking, is likely to come back to bite you later, when she rises to a position of power. Which is quite likely, as one of the fundamental truths about post-millennial working life is this: Ex-interns run the show. And like many banal workforce realities, this one’s pernicious. The field of journalism offers a prime example of the power of the internship.
ENRON: THE SMARTEST GUYS IN THE ROOM (Magnolia) THE INTERPRETER (Universal) A documentary called Enron: The Smartest Guys in the Room is about more than its immediate subject. Alex Gibney, who directed, based his screenplay on a book by Bethany McLean and Peter Elkind, Fortune reporters. (It was McLean who first uncovered the Enron mess.) What Gibney has done, with sharp interviews, with some of Enron's own company footage, with television clips, and with insistent pace, is to fashion a film missile that pierces the facade of some American practices. Behind that front looms a large and ominous
INHERIT THE WIND Billy Tauzin of Louisiana was one of the most venal politicians ever to sully Capitol Hill. As Michelle Cottle chronicled in these pages ("Cajun Dressing," October 6, 2003), the Republican representative used his perch on the House Energy and Commerce Committee to shill for almost every big business in America--until a business broke enough laws to spark public outrage, at which point Tauzin would hold showboat hearings and recast himself as a consumer champion.
PRO-CHOICE MANY READERS OF “BULL RUN” will have nodded in approval when authors Eliot Spitzer and Andrew G. Celli Jr. argued that government intervention in the free market is needed to “enforce the rules,” “deal with market failures,” and “uphold core American values” (March 22). Spitzer and Celli like to point out that Enron has become the poster child for corporate greed and corruption. But Enron is small potatoes compared with corruption and failures found in government.
WE ARE TOLD we live in the New Economy, an economy of computers and fiber-optic cables, capital without borders, and competition on a global scale. This is mature market capitalism, and its promise for human advancement—when combined with democracy and individual freedom—is rightly touted at every turn. But, if our economy is a creature of the twenty-first century, our thinking about government’s role in the economy is mired in the nineteenth. Two essentially opposite viewpoints dominate today’s debate.
LAST FRIDAY, a jury convicted Martha Stewart of lying about a 2001 stock sale in which her broker gave her insider information on pharmaceutical maker ImClone.
Few have ever accused Morgan Stanley, the white-shoe investment bank formed in 1935 by partners of the imperial J.P. Morgan & Co., of being solicitous toward the investing masses. And that hauteur was on full display last week. On April 29, appearing at the UBS Warburg Global Financial Services Conference, at Manhattan's gilded Pierre Hotel, Morgan Stanley CEO Philip Purcell was asked about the $1.4 billion "global settlement" that Morgan Stanley and nine other firms had just inked with state and federal regulators.