A $261 million job, 50-year Bonds and a Saab Story
December 18, 2009 by Chip Wood
*Man, that’s a lot to pay for a job. No one was surprised that Michael Bloomberg won reelection for a third term as the mayor of New York City. But what he paid for the dubious privilege was impressive—$102 million of his own money. Add that to the $74 million he spent on his first campaign back in 2001, and another $85 million in 2005, and you get $261 million he’s doled out to be called “Your honor.” That’s a lot of money for you and me, but a pittance to a man worth $17.5 billion.
*Loan China money for 50 years? Here’s another news item that struck me as strange. Last month investors snapped up nearly $3 billion worth of 50-year bonds offered by the Chinese Ministry of Finance. The notes pay 4.3 percent interest. Why would China offer the bonds? It certainly doesn’t need the money. And why would investors tie up funds for 50 years for such a lowly return? Neither side of this trade makes sense to me.
*A real Saab story. Sorry, but I couldn’t resist the pun. Looks like the once-illustrious Swedish car maker will soon be but a faded memory. General Motors (GM), which acquired the car company several years ago, is looking for a buyer. If one isn’t found soon GM says it’ll fold the company. Estimates are that Saab will sell 10,000 cars in the U.S. this year—half as many as Honda sells in a week. Looks to me like the market has spoken.
—Chip Wood
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