Wednesday, August 02, 2006


Slate's been a frustrating beast of late. Its tendency, frequently endearing, to indulge its talent, has brought it to the point that it resembles nothing so much as the eclectic, yet repetitive, cast of characters that made up "Taki's Top Drawer" in the front of the New York Press in the early years of this century. Only less bloodthirsty.

Jack Schafer's MethPress Box is among the more entertaining. The clown Weisberg gets to call his column "The big Idea" either because it's the only one he can keep in his head at any one time, or because he's the editor. Today he decided to inform us that sanctions don't work, except for South Africa, which he minimised, and Libya he ignored. In fact, he should have titled his column "Sanctions Don't Work On Nutter Dictators", but that wouldn't be snappy enough for him, and might invite the argument that a lot of things don't work on nutter dictators, including occasional bombing and visits from Condoleezza Rice.

The man disgusts me, and it pains me to think that he is Dan Gross' editor. Gross' column today, like most of his stuff, takes an educated tilt at the conventional business wisdom. The article starts, quite rightly, from the assumption that US CEOs are quite conceivably talking nonsense when they blame recent legislation such as Sarbanes Oxley for the drop-off in big listings in New York. Never mind that the Economist did the article a few weeks back, because its worth revisiting.

Gross compares the results that firms listing in new York get against those that list in London. and he compares their fees. The results are a huge difference in the fee levels in London and New York, and the difference between the offering price of a share issue and the level it closes at at the end of the first day's trading is a little smaller in London than it is in New York.

Now, before I start crowing about the innate superiority of British stockbrokers, and trust me I won't, I will note that the UK market is much less liquid, its volumes are lower, and its investors are still a little less sophisticated. Pricing issues in the UK may well be a little easier to gauge.

What is almost certainly true is that the legal bills associated with US IPOs are higher, if only by comparing the per partner profit expectatiosn of US and UK securities partners. I'm almost certain as well that US associates will be billed at higher rates than their UK equivalents, even allowing for exchange rate volatility. I could muster the anecdotal evidence but to do so would mean disclosing a few bits of, um, privileged information. Or waiting until the UK lawyers of my acquaintance to wake up.

The US lawyer of my acquaintance, on the other hand, gets a kitten. Hello Mrs. Cutesome!

If you're a little bored of this business talk, then never fear. I have a new column up at Sugarzine. Be warned though, that's pretty f***ing pompous as well.

[Kitten courtesy of Flickr user drotmalac]


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