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October 23, 2005
Bribery in Russia
A few months ago Market-Racket posted a piece about Russia trying to sell itself as a great place for FDI, and how corruption is sucking credibility out of President Putin’s pitch. In light of Transparency International’s latest corruption survey, which moved Russia from 90th place all the way down to 126th place (out of 159), this phenomenon merits a closer look.
Posted by Michelle Smith at 11:41 PM | Comments (0)
October 18, 2005
Refco's Spoiled Stock
Refco’s swan dive into a financial breakdown this week demonstrates the severity with which markets handle accounting fraud these days. Just two months after its IPO, the company, one of America's largest futures and commodity brokers, announced that debt owed to it by its CEO hadn’t been properly booked on its balance sheet. The CEO paid back the loan with interest shortly after the announcement, but within days the company’s stock price plummeted so low that the company had to halt operations due to a liquidity shortage. Struck from sticker shock at the sight of the $430 million price tag for this “hidden” debt, investors gave as much consideration to hanging on to their shares of Refco as one does to old mayonnaise when cleaning out the fridge.
The knee-jerk reaction of the shareholders begs an important question: if the loan got paid back, then why did shareholders keep running away?
Posted by Michelle Smith at 09:37 PM | Comments (0)
October 08, 2005
Turkey and the Club
European presses are roaring about Turkey hitting another milestone this week in EU (European Union) negotiations. Do this week’s events mean that the EU is finally opening the doors to its first Muslim member?
Posted by Michelle Smith at 04:52 PM | Comments (0)