What you may have missed in the business news last week:
1. Toyota to use its cash pile, apparently.
I’m sure that Shinzo Abe is breathing tentative sighs of relief, as he hopes that this is the first sign that his Abenomics gamble is beginning to pay off (I wrote about Abenomics here).
The basic summary: the Japanese aren’t spending money – Abe wants them to – so he’s trying desperately to make the cash flow. Toyota has $37 billion of cash lying around. It says it’s going to start spending it on improving itself and paying 30% out to investors. About half of the improvement expenditure will take place in Japan; and three quarters of that dividend will go to Japanese investors.
The trouble with that: the money will go to high income earners (developers and investment holders). If you want higher consumption, that money needs to go to those that will actually spend their money.
2. The Subprime Mortgage Crisis Culprit.
Fabrice Tourre AKA Fabulous Fab is formerly of Goldman Sachs, famously (and Fabulously) french, and infamously now-responsible for the Subprime Mortgage Trade that gave John Paulson his ego.
The case required the lawyers to explain a complex finance strategy (specifically Abacus 2007-AC1) in plain english* to the nine New Yorkers on the jury (including a retired special education teacher, a medical school graduate, an art historian and a priest). By their understanding, Tourre definitely sold a product that was designed to fail and deliver Paulson billions of dollars. And he definitely didn’t tell clients what he was up to.
There was also an email to his girlfriend where he wrote “Only potential survivor, the fabulous Fab…standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all the implications of those monstrosities!!!” Well, you’re not the survivor, mate. Although I would’ve thought that this should have stood in your favour, as no one that actually put those trades together should have been stupid enough to put it in writing. Clown.
*no jokes – they were “discouraged” from using financial jargon and/or financial terms.
3. Apple loses the ebook price-fixing case.
I originally wrote about the case here: Antitrust: Getting Ridiculous. I still think it’s ridiculous. But there it is.