These are some recent compliance-related stories that caught my attention.
The Skyscraper Index from Barclays Capital (via Barry Ritholz’s The Big Picture)
Our Skyscraper Index continues to show an unhealthy correlation between construction of the next world’s tallest building and an impending financial crisis:New York 1930; Chicago 1974; Kuala Lumpar 1997 and Dubai 2010.
Yet often the world’s tallest buildings are simply the edifice of a broader skyscraper building boom, reflecting a widespread misallocation of capital and an impending economic correction.
Investors should therefore pay particular attention to China – today’s biggestbubble builder with 53% of all the world’s skyscrapers under construction – andIndia – which with just two completed skyscrapers, now has 14 skyscrapers under construction
Why Matzo Makers Love Regulation by Adma Davidson in NPR’s Planet Money
Alain Bankier, co-president of Manischewitz, said that the capital investment in the company’s state-of-the-art matzo machinery poses a huge barrier to entry for potential competitors. So rather than being bad for business, all those kosher rules mean Manischwitz won’t have much competition.
Taxes and Cheating by Dan Ariely
To see how witnessing and act of dishonesty would affect participants, we had one student—a confederate named David—stand up after only a minute and claim he’d solved all 20 matrices. The experimenter merely responded that in that case he could take his earnings and go. So how did the participants respond to this display when asked to self-report the number of matrices they solved? By cheating a whole lot: they claimed an average of 15 correct answers, more than twice the average score when cheating was not allowed.
Weighing SEC’s Crackdown on Fraud by Jean Eaglesham in the Wall Street Journal
More than 100 people and firms have now been charged with fraud tied to the financial crisis by the Securities and Exchange Commission, but that hasn’t quelled criticism that the agency hasn’t cracked down hard enough.The SEC passed that milestone Friday when the regulator filed civil-fraud charges against two former Texas bank executives accused of using a loan-modification scheme to make bad real-estate loans look good.