Free Riding in the US – MoneyWeek

Arathershamefulspiritofthieveryisnot,apparently,restrictedtoNorthAmericassuddenlyimpoverishedSUVdrivers。

RetailgiantWal-Marthasfiledasuitagainstaformervicechairman,ThomasCoughlin,allegingthat,inBloombergNewswords,helootedthecompanyofhundredsofthousandsofdollarstoreimbursehimselfforpersonalitemsrangingfromunderweartopuppychow。

Theseallegations,ifsubstantiated,willbeallthemoreremarkablegiventhatMr。

Coughlinwaspaidmorethan$15millionoverthelasttwoyears。

CominghotontheheelsofformerTycoCEODennisshowercurtainsKozlowskisconvictionforgrandlarceny,securitiesfraudandconspiracy,CoughlingateifthecaseisprovenwouldpointtoaparticularlynastytendencytowardcorporateexcessthatonlyAmericansseemtohavecompletelyadopted。

Nootherbreedseemssufficientlyshamelesstopullitoff。

Thisisafailureofthefreemarketsystemandparticularlyafailureofthejobmarket。

WhydoesWal-Mart,ahighprofilepubliccompanyandonewhichpresumablyattractsanumberoftalentedapplicantsforseniorpositions,havetopayitsseniorexecutivesquitesogenerously?

Howmuchcaneverbeenough?

Andonreceiptofsuchlargesse,whatmakestheKozlowskisofthisworldgotruffle-huntingforfurthergoodiestotrouser?

Coulditbecompletedisdainfortherankandfileshareholder?

Ifso,andifthisvile-lookingbehaviourisevenremotelyindicativeofthewiderexecutiveculture(numerousexamplesfromWallStreetsuggestitis),thenUSequityvaluationsareevenmorestretchedandoffensivethanwethoughttheywere。

OnetruststhatthesortofborderlineorexplicitcriminalitycitedaboveisaminorityactivitywithinUSfinancialmarketsbutonesensesthatitspeakstoanactiveminoritywhichtouchesonawiderculturalproblemthatoflazymoneyandwidespreadindifferencetogeneralethicalprobity。

Whencapitalisplentifulandcheap,bothinvestorsandconsumersofcapitalinallitsformstendtobecomeindiscriminate。

USequitymarketshavemassivelylaggedthoseintheUKandEuropethisyearwhichhavehappilymanagedtodecoupleforonce。

Robusteconomicgrowthmaynotbesufficienttonarrowthegap。

Andletsnottalkabouttheproblemsthatwillbecreatedeventuallybyabustintheresidentialpropertymarket…


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