Bye Bye Blue Chips
One of of the most underreported repercussions of the ill-advised SarbOx legislation is the flight of publicly traded foreign companies as they de-list from the Security and Exchange Commission in order to avoid burdensome compliance.
The increasing costs of capital drive IPO's and the ensuing trading activity to other more competitive markets overseas. Business Week reports that this is exactly what is happening as the London Stock Exchange, the Deutsche Borse, EuroNext, and the SEHK attract "bigger, more liquid and more sought-after capital markets."
It appears that the only recourse the NYSE and the NASDAQ can conceive is to try to buy the foreign bourses. As Jamie Selway, managing director of White Cap Trading states: "If you can't beat 'em, buy 'em."
The only problem is that does nothing to fix the mess we have to deal with here in the States. I would suggest we start by strengthening our currency. Then tackle the debacle that is Sarbanes-Oxley.
Comments (6)
M E Hoffer
Note well : Today's announcement the NYSE's agreed "merger of equals" w/ EuroNext.
NYSE to pay .98 shares of NYX + 21.32 EUROS to EuroNext.
That "SarbOx" is deleterious to American financial interest, yet the Financial Interests can find ready hedge, should cause Americans some dome scratching, at the very minimum.
Published: June 2, 2006 9:37 PM
Andrew - Money Supply & Debt Blog
I was in Borders a few days ago browsing through the business section and this is what I saw: http://www.amazon.com/gp/product/0471768464/, Sarbanes-Oxley For Dummies. Because of a few crooks now all Americans should be punished?
Published: June 3, 2006 12:09 AM
David C
Things like this and the fact that so may libertarians hate "SarbOx" tells me that I must be missing something here. I haven't read it the bill, but on the surface it seems mild compaired to most other regulations: more transparent accounting, less conflicts of interest, and signing off on statements was the gist that I got. Potentially anoying, yes, but omninous? what am I missing?
Published: June 3, 2006 12:23 AM
M E Hoffer
David C,
http://www.google.com/search?hl=en&q=SarbOx+section+404
try that, for starters. Keyword: section 404
Were the bill, as you describe, and was sold, just that, hardly any would say contra to it.
The reality, Surprise!~, is far different. At best, a major league Jobs program for corpo- bureaucrats, dreaded "Consultants", more "outside" Legal & Auditing billings, and the necessarily attendant IT infrastructure to support them in hewing to the Bills requirements.
Toward the worst, of its effects, lie: generalized increase in the cost of Capital Formation and further entrenching of the Largest at the expense of potential new enterprises.
SarbOx is no mere trimming back of the shrubbery, but truly "gene therapy" being practiced on the Economic body of the country.
Published: June 3, 2006 1:05 AM
Tom Schofield
The purpose of Sarbox was not to curb corporate fraud. Its purpose was to make Joe Sixpack and Suzy Soapopera believe that Congress was doing something in that regard, thereby reinforcing the latter's de facto life-time tenure. In the process - and according to the dictates of the process - a few goodies were thrown in for the benefit of heavy campaign contributors. Congress can hardly be blamed: they have done everything in their power to crush the free-enterprise system for many years - and the system just keeps chugging along. Someday, they will manage to kill the goose that lays golden eggs. But history has taught them that there is no penalty for "attempted golden goose-icide", how can they be expected to fear an actual charge of murder?
Published: June 3, 2006 8:01 AM
J Henderson
And strangely, the "free market" advocate Christopher Cox is quashing the only effort to reform SOX by exempting small businesses from Section 404. Thanks for appointing him, Bush.
Published: June 5, 2006 6:40 AM