Wednesday, July 04, 2012

Too big to fail

Glaxo Agrees to Pat $3 Billion in Settlement via Dean Baker. But
"Despite the large amount, $3 billion represents only a portion of what Glaxo made on the drugs. Avandia, for example, racked up $10.4 billion in sales, Paxil brought in $11.6 billion, and Wellbutrin sales were $5.9 billion during the years covered by the settlement, according to IMS Health, a data group that consults for drugmakers.

"So a $3 billion settlement for half a dozen drugs over 10 years can be rationalized as the cost of doing business,” Mr. Burns said. "
From Barclays Libor Scandal... by Aditya Chakraborty:
"Through tampering with lending rates, financiers at Barclaysand elsewhere distorted everything from how much home-owners paid on their tracker mortgages to the deals struck by pension funds purely to pump up bank profit margins and their own bonuses. The lawsuits for Barclays alone are likely to cost billions.

Against that, the punishment meted out to Bob Diamond's company barely figures. The £290m fine slapped on it by regulators is tax-deductible, making it equivalent to just 13 days' profit. In any case, the bill will be paid by shareholders, rather than traders or senior management."
And a Bloomberg editorial There's Something Rotten in Banking via Naked Capitalism July 3rd Links.

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