Don't De-Friend Facebook Yet: Its IPO Might Not Mean Trouble Ahead
Analysts have declared Facebook's IPO a sign of trouble for the company, but the real problem is Wall Street's warped definition of success. Plus, Matt DeLuca examines the numbers.
Paul Krugman’s Dismissal of Structural Causes for U.S. Employment Problem Is Misguided
The Nobel laureate insists our unemployment problems are part of a chronic cycle and require government action—and says arguing the issue is structural is an excuse for doing nothing. Zachary Karabell on why that stance is misguided.
JPMorgan’s $2 Billion Loss Fueled by Efforts to Avoid Risk
The Monthly Jobs Numbers Don’t Matter
Today’s anemic data is neither bad nor good, just so much political football in a pre-determined game. There will be little discussion of the structural issues permanently transforming the U.S economy, writes Zachary Karabell.
Wall Street, not Facebook, Bears Most of the Blame for the Company’s IPO Debacle
All the actors in the Facebook IPO debacle look bad, Zachary Karabell writes, but most of the blame should be directed at Morgan Stanley and the other banks that underwrote the stock offering. Plus, Dan Lyons breaks down 7 things to know about the scandal.
Chaos Over New Elections Deepens Fear of a Greece Chain Reaction
Panic about a possible Greek default and euro exit—and the crisis spreading worldwide—is at a fever pitch. Zachary Karabell says we should be wary of Greek dominos falling, but the global obsession is overblown.
Zachary Karabell on JPMorgan Chase's Risky Business
Question: When does risk aversion become risky behavior? Answer: when you are a large financial institution in today’s world, especially a behemoth bank like JPMorgan Chase, attempting to navigate both labyrinthine regulations and shareholder demand for endless profit. How not to solve that conundrum was evidenced last week when the until-now lauded CEO of JPMorgan Chase, Jamie Dimon, announced losses of $2 billion in an internal fund designed to, of all things, prevent losses. But this isn’t just a story of Dimon losing his luster. Faced with new dictates on trading and capital, combined with the continued drag of bad loans and the slow U.S. housing market, banks have been hoarding cash and coming up with innovative attempts to not lose any more money. Yet in this effort to avoid loss and steer clear of risk, they have placed themselves in precisely the same risk-taking, loss-courting position. There is no such thing as a free lunch and no such thing as banking without bets
The U.S. Cannot Confront China on Every Move it Disagrees With
Republicans criticizing Obama for not being tougher on China's human-rights abuses are delusional about where America stands in today's global power dynamic, says Zachary Karabell.