The old wall street is dead

Andy Kessler in the Weekly Standard has a go at explaining the recent meltdown.

Does private equity create wealth?

Here's a recent paper by Masulis and Thomas (Prof's of Finance and Law at Vanderbilt) posted on SSRN that has a look at the issue.

Abstract:

Private equity has reaped large rewards in recent years. We claim that one major reason for this success is due to the corporate governance advantages of private equity over the public corporation. We argue that the development of substantial derivative contracts and trading has significantly weakened the governance of public corporations and has created a need for financially sophisticated directors and much closer supervision of management. The private equity model delivers these benefits and allows corporations to be better governed, creating wealth gains for investors.

Merger activity in Australia in 2007

Here's an essay on Australian M&A activity in 2007.

Total M&A activity in Australia grew from USD$108 billion in 2006 to USD$133 billion in 2007. Surprisingly, Australia's M&A activity over 2007 was the highest amongst the Asia-Pacific economies, followed closely by Japan with M&A deals worth USD$124 billion

Bond ratings

Here's a nice NYT article on the (failure of) the bond rating agencies. [H/T: Finance clippings]

Mark to market accounting- a 'clarification' from the SEC

The SEC and FASB have made a recent announcement on mark to market accounting.

"When an active market for a security does not exist, the use of management estimates that incorporate current market participant expectations of future cash flows, and include appropriate risk premiums, is acceptable."

Though that's what managers can do already. SFAS 157 allows 'mark to model' accounting. Prof Bainbridge has already made this observation.