An object lesson in common sense to all those who hide behind their "lack of expertise" and mildly accept everything the experts tell them. It may take more than common sense to devise and implement a policy, but common sense will tell most objective witnesses whether the policy is good or bad.

Never forget the derivation of the term expert:

Ex - someone who used to be
Spurt - A drip under pressure.

Or equally, "pert"; a good description of a tit.

DK

The damndest thing is the the UK government is putting together laws to prevent the plibble restricting regulations from being applied in the UK if the London Plibble Exchange gets taken over by the NASCAR plibble exchange.

Just Google your Wiki and all is revealed.

If Michael Bloomberg thinks he has a problem now, it will double if he ever actually follows the advice of an organisation like McKinsey. My colleage tells me of two McKinsey moments that should have been on the pages of Mad Magazine. Their classic advice (when they were brought in to help cut flight test costs at Pilatus) was to "cut every third test". Of course the fact that an aircraft with a third of the regulatory requirements unfulfilled is unsellable was beyond them.

Management consultants, as a rule, are there only as a CYA (Cover Your Arse) excercise for a managment that has lost its way. Like IPO, CYA is another TLA (Three Letter Acronym) which is the JDJ (jargon du jour).

It is very simple, Natalie. As a result of the Sarbanes-Oxley law passed in the aftermath of Enron, WorldCom, etc, it is now a bureaucratic nightmare to do business in the United States if you are a public quoted company. Result: many US firms are going public on non-US exchanges, such as the London Stock Exchange. Also, some U.S. firms are de-listing and becoming private firms again, to avoid the SO laws.

Another great result for the U.S. regulators.

I believe there actually are a few people who jump on IPOs to make a "quick killing" who don't lose their shirts, but I haven't met any.

Just to inject a little reality here, if you really have no idea what they're talking about, why on earth do you think you need to care? This sort of thing is really just inside baseball for the securities industry, their regulatory bodies, and finance/accounting types. The migratory and nesting habits of capital are really only interesting to practicing capitalists.

You might spend your time better by studying the various air intake rules for NASCAR.

Plibble! Marvellous word, and if the financial industry don't take it up, I'll appropriate it and use it in cricket writing for the coming Ashes series.

In 1984 AT&T hired McKinsey to investigate whether they should enter this new cellular phone business. McKinsey advised AT&T that there would be less than a million such phones in use worldwide by 2000, and AT&T therefore did not enter the market. (They got in later by acquiring McCaw Cellular). On that occasion McKinsey were only out by about 750 million units.

It is like the eurobond thing - in the post World War II period regulations in certain parts of financial services were less extreme in some parts of Europe (such as London) than in the United States, so raising money for certain forms of investment migrated out of the United States.

Recent regulations (such S.O. as mentioned above) have done this again - so business that might have been done in New York is being done overseas. However, there are more regulations in Europe these days (with such things as the various financial services regulations and the new E.U. regulations) so business may not stay in the main European cities.

Even Switzerland has been pushed towards "insider trading" and "antitrust" regulations.

As for Mayor Bloomberg - his idea that paying for consultants can solve the problem is yet more evidence that being a good businessman does not make someone any good as a Mayor (or other political office) - the regulations need to be repealed (and tort law - which allows people to sue without there being any real malpractice - should be reformed).

Mayor Bloomberg's first action was to massively increase tax on cigarettes - thus showing that he knew nothing about political economy (whatever he may know about the separate matter of running an individual business), he (without knowing it) boosted organized crime (by making their product cheaper compared with the legal product).

As for corporations and companies going private again: Americans tend to be deeply paranoid about corporations (every Hollywood film, ironically films made by corporations, and television show, ditto, tells them that corporations are the root of all evil) - contrary to what most Americans believe, the American government (at Federal and State level) taxes and regulates corporations more than most Western governments do.

"But corporations capture the regulators" - sometimes in the early stage yes. The corporations use the government regulations to sit on potential competitors - but over time the regulations increase and increase so that (in the end) even corporate special interests lose by them.

If you have to bring in outside consultants then you don't understand you own business and would be advised to file for bankruptcy straight away.

Absolute rubbish. We meet many successful businessmen who understand their marketplace very well but lack knowledge about marketing, administration, margin control, credit control....No man knows everything and no business is perfect. The right consultant, for the right issue, at the right time is useful for most businesses and usually makes financial sense.

Twogbots sound more fun.

Bloomberg just doesn't get it. The article talks about the possibility of lobbying against the regulations. Where does he think that'll get him? No, the appropriate response would be to enter into talks with British regulators to "standardize" their regulations so as to be more "consistent", thus removing a "barrier" to choosing the best location for an IPO, and creating more "opportunities" for new businesses to obtain financing.

I P O = Initial Product Offering...or somesuch...

And that's about the limit of any useful knowledge I might offer...

Hey! Smoke is rising from my head!

Oh, god! I've burned out my brain, trying to help Mrs. Solent!

Oh! It hurts---the pain! THE PAIN!!!

AAUUURghgUURHRHGU..1.1....curse you natilie solent....you made my brain hurt.....

Natalie,
Excellent piece. Given your predeliction for plibblallia, I would point you to the classic South Park episode "Starvin' Marvin In Space", where you'll find that any noun is perfectly replaceable by the word "marklar". Should be right up your marklar.

Mike James,
One word off: "Initial Public Offering", i.e. the first time a private corporation (or a newly privatized corporation) initially offers stock for sale to the general public.

However, such an event is a slight misnomer, for the simple reason that stock brokerages generally pre-subscribe for all of the shares in an IPO (if it is a company that is worth the asking price or more), reserving them for their biggest clients, who then themselves resell the stock at a large markup on the open market, which the issuing company never sees. This is one of the dirty little secrets of the market that encourages the perpetuation of the "the rich are getting richer" anti-capital meme.

Any management that needs to employ management consultants is recognising that management is not its core competence. Stop touting for business, Mr Timms.
SOX ( as victims have it) applies globally not just in the USA, and adds force, as if force were needed, to Auberon Waugh's (pbuh) wise counsel never to enter into any form of business relationship whatsoever with any corporation, body or individual that has any connection, however remote or intangible, with that otherwise great nation.

I've been living the hell of both a) Sarbanes-Oxley and b) dealing with "advisors" as part of an acquisition process. Consultants are worth pennies on the dollar for what you pay. Anyone who says otherwise is probably a) a consultant b) never worked with consultants or c) has actually had a good experience with consultants (1 in 10 chance? Maybe).

Anyway, Sarbox was exactly what any libertarian-minded accountant would have predicted back when Andersen fell: more government regulation that does more harm than good but is a BOON for accountants - and particularly, auditors (Big and small). Whaddayaknow? That's exactly what happened. Now, audit firms - and particularly big four audit firms (like Deloitte and Ernst & Young) - actually charge more hours, make FEWER conclusions (b/c now the onus is supposed to be completely on the company to figure everything out without any help from those they're paying $200+ an hour), and generally don't work nearly as hard because the client has to all but diagram the paper trail for every g-d'ed journal entry they make. Trust me. It's a nightmare (one I'm living). The system is worse off now because accountants who are worth a damn are saying "I'm not going to put up with this bulls--t" and finding better uses of their time. That is, unless they're partners at these big firms making millions a year (the average salary for Ernst & Young's 2,000 partners PRE-Sarbox was a cool half-million. Imagine what it is now - six years later).

Anyway, it's no surprise what is happening and "plibbles" is as good a word for it as any. The reality is that the corporate paradigm is f--ked by nature of the gross disconnect between principle and agent. And no amount of regulation can make that risk go away, so why keep trying??

...and this, children, is what you get when you allow an unrepentant Marxist like Paul Sarbanes to sponsor laws having to do with business.