The price is not always right

I read an interesting article from Fortune magazine online talking about executive compensation being tied to the price of a company’s securities. I found the following excerpt very interesting:

“As investigators comb through the wreckage of the financial meltdown, one fact remains clear and startling: Credit default swaps and collateralized debt obligations, as well as debt and equity from large financial firms were useless as indicators of fiscal health. One of the biggest revelations has been the utter failure of markets to capture the relevant information required to set accurate prices on securities.” (emphasis mine)

And this is from Fortune magazine, not some leftist socialist newspaper.

The price is not always right.

0 comments ↓

There are no comments yet...Kick things off by filling out the form below.

Leave a Comment