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| Subject: executive stock options An employee stock option is a call option on the common stock of a company, issued as a form of non-cash compensation. Restrictions on the option (such as vesting and limited transferability) attempt to align the holder’s interest with those of the business’ shareholders. If the company’s stock rises, holders of options generally experience a direct financial benefit. This gives employees an incentive to behave in ways that will boost the company’s stock price. A suckers rally? By John Schroy, on May 9th, 2009 |  Leave a comment  How long will the rally in US stocks that started in early 2009 last? Remember the ’suckers rally’ of 1932-1933 that signaled the end to the Great Depression too early. There are three major barriers to a prolonged recovery in stock prices: a trillion dollars or so of executive stock options; the cost of TARP repayments; and the investment needs of retiring Baby Boomers. May 9th, 2009 | Print Article |  Email Article |  Topics: Baby Boomers, executive stock options, TARP | Category: US Equities | Leave a comment |  Short urlThe threat of inflation By John Schroy, on March 31st, 2009 | 2 comments  The supremacy of the US dollar is not yet dead, but portents of a fatal cancer — inflation — are there for all to see. The extreme, profligate spending of the Obama administration, combined with populist, irresponsible bank lending policies promoted by Barney Frank and Chris Dodd, portend rising interest rates, the collapse of the bond market, and the end of dollar supremacy. Furthermore, a large part of the American electorate doesn’t understand or is unaware of what lies ahead. March 31st, 2009 | Print Article | Email Article | Topics: Barack Obama, Barney Frank, Bernard Madoff, Bill Clinton, China, Chris Dodd, Dennis Kucinich, Euronext, executive stock options, Fannie Mae, fiscal deficit, Freddie Mac, General Motors, IMF, industrialization, Inflation, Jimmy Carter, Lyndon Johnson, Monica Lewinsky, Nancy Pelosi, NASDAQ, NYSE, oil, OMX Group, reserve currency, Ronald Reagan, Stock Buybacks, sub-prime mortgages, Timothy Geithner, unemployment, US dollar, Warren Buffett | Category: Inflation, featured | 2 comments | Short urlThe end of an era? By John Schroy, on March 27th, 2009 | Leave a comment  Since 1982, US equities markets have been driven upwards by corporate stock buybacks. Federal Reserve flow of funds accounts showed corresponding sales of stocks by executives exercising options to take advantage of manipulated prices. The Crash of 2008 changed this pattern, driving equity prices down so that executive options were “below water”. Companies reduced buybacks due to tight credit and the inability of executives to benefit in the depressed market. March 27th, 2009 | Print Article | Email Article | Topics: Baby Boomers, Corporate Governance, dividends, executive stock options, fraud, Graham & Dodd, Leverage, price earnings ratios, Stock Buybacks | Category: Stock Buybacks, featured | Leave a comment | Short urlFeatured articles on inside pages
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