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Tag Archives: Legal

Brexit: Running Down the Clock?

The Brexit front has seemed positively dull compared to the horrors of Covid-19 (the disease proper, the spectacularly bad responses in the US and UK, and the economic fallout), and US protests and rising social tensions. However, the lack of much apparent action, aside from the Groundhog Day sort, is a bit misleading, since letting the clock run has consequences of its own. Even though you’d not discern it from the tone of the press coverage, with the transition period over on December 31,...

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The Federal Government Always Money-Finances Its Spending: A Restatement

Yves here. This Nathan Tankus post is a bit technical at points, but demonstrates a basic issue for fiat currency issuers like the Federal government: their spending is always the result of creating new money, even when other transactions like Treasury bond issuance appear to be responsible. By Nathan Tankus. Originally published at Notes on the Crises On this substack I rely on Modern Monetary Theory (among other bodies of knowledge) to inform my analysis. Yet, I rarely explicitly write...

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WSJ Says Banks Can’t Determine Who Is Credit-Worthy: More COVID-19 Fallout

Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans. The Wall Street Journal ran a story this morning about a problem confronting banks: the COVID-19 pandemic has made it difficult  to decide who remains credit-worthy and who not,.‘Flying Blind Into a Credit Storm’: Widespread Deferrals Mean Banks Can’t Tell Who’s Creditworthy As regular readers know, banks have been profligate in awarding credit before...

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Wall Street Journal’s Apologia for Private Equity Letting Companies Go Bust

As more and more private equity-owned companies are failing, the great unwashed public is starting to take notice and wonder why. Even before the coronacrisis arrived, the mainstream media was documenting the outsized role of private equity in the bankruptcies of retailers, restaurants, and even stores like Fairway. Sometimes, as with Toys’R’Us, it was too much leverage exacting a toll. In others, it was asset-stripping that increased operating leverage, specifically selling company-owned...

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The Best Law Capital Can Buy

Yves here. Professor Katharina Pistor has written an important, potentially a landmark, book on the role of law in creating and increasing capital at the expense of labor. We’ve written about many aspects of this issue over the years, from the way what used to be the commons (starting with pastureland) has been seized by private interests, to the way consumers are subjected to “contracts of adhesion” that include mandatory arbitration, to the concerted and successful efforts to impede the...

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Bayer Agrees to $10.9 Billion Glyphosate Settlement

By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans. Bayer agreed to a $10.9 billion settlement yesterday, which resolves much – but not all – of the litigation risk it  assumed when in 2018 it acquired Monsanto, the original manufacturer of the glyposate-based herbicide Roundup, according to the WSJ, Bayer to Pay Up to $10.9 Billion to Settle Lawsuits Over Roundup Weedkiller. Plaintiffs allege its...

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LA Times’ Michael Hiltzik Shellacks CalPERS for Trumped-Up Attacks on Board Member Margaret Brown, Toadying to Staff Instead of Providing Oversight

Pulitzer Prize winner Mike Hiltzik, the most prominent business commentator in California, roused himself to engage in an extended spanking of the CalPERS board for “acting like a group of kindergarteners” in harassing board member Margaret Brown. But the bigger sins in Hiltzik’s eyes are that the board is devoting energy to petty antics like this while the fund is in trouble, and even worse, expressly denying their legal and fiduciary duty to oversee staff. As regular readers know, the...

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Minnesota, Ellison Announces Climate Lawsuit Against Exxon, Koch, and API

Yves here. It is over my pay grade to assess the legal merits of Keith Ellison’s climate lawsuit. Having said that, my layperson’s understanding is that advertising fraud is a well-settled area of law, and advertisers are liable for false claims. So I would anticipate that this suit ought to survive a motion to dismiss and be able to get to the discovery phase, which alone would be plenty damaging to these companies. So the open questions would be how to establish and set damages for false...

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Board Member Margaret Brown Sues CalPERS, Board President Over Gang-Style Retaliation for Efforts to Oppose Its Incompetence

Pulitzer Prize winning reporter Mike Hiltzik has criticized the CalPERS board for “acting childishly” and wasting energy on “intramural bickering” and imposing sanctions on its pro-transparency, pro-accountability board members, first JJ Jelincic, more recently Margaret Brown rather than engage in oversight of the giant fund. But rather than focus on executing its fiduciary duty, the board has doubled down on acting as the staff’s enforcer and attacking dissidents who call out incompetence...

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What Do Struggling Small Businesses Need Most? Time – and Bankruptcy Can Provide It

Yves here. Perhaps readers will disagree with me, but I have some problems with the notion that bankruptcy will come to the rescue of many small businesses. First, if Covid-19 has made a business model unworkable, a bankruptcy stay won’t solve that. Even if the operation were to emerge from bankruptcy with its liabilities wiped out, it would just drive itself back into the ditch (unless a vaccine or effective treatments emerge and are widely distributed very soon). Second, companies need cash...

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