Is private equity a business?

A private equity firm buys a bunch of different companies that make different sorts of widgets and then owns and manages them. In the olden days you'd have called this a "conglomerate." If you asked the chief executive officer of a conglomerate what his company did, he'd say "oh we make military aircraft and mining equipment and toasters and clothes for dogs" or whatever. If you ask the CEO of a private equity firm what his company does, he'll say "we're investors." But basically same thing. But it matters: A Boston court in a pension case recently ruled that Sun Capital Partners, a private equity fund, is "engaged in a trade or business," not just an investor, under pension funding laws. The scary risk for private equity would be if the Internal Revenue Service applies this reasoning to tax law, which would expose private equity funds and their investors both to more taxes and more interactions with the IRS. Which is not really what they're into. More here.

Should bankers get bigger bonuses?

Britain sued in the European Court of Justice to try to overturn the European Union rules that would limit bankers' bonuses to twice their base pay, arguing that this would force banks to raise base pay and thus have higher fixed costs, which would make them riskier in an economic downturn. This is quite right as far as it goes: The system of paying bankers and traders mostly in once-a-year discretionary lump sums probably does make banks structurally more stable. On the other hand the argument is that it makes them culturally riskier: A person who works all year for a shot at a once-a-year discretionary lump sum is a person who is comfortable taking on a lot of risk. You gotta weigh the fact that paying big bonuses makes banks safer in a crisis, against the possibility that it makes them more likely to have crises.

Can JPMorgan make it stop?

The number for JPMorgan Chase's global mortgage-bond maybe settlement is up to $11 billion, "including $4 billion for consumer relief." The $11 billion means nothing, it was $3 billion a few days ago, it's still ongoing, it'll be a trillion dollars by Monday, I dunno. The consumer relief stuff is interesting: As far as I can tell, this settlement is addressed exclusively to claims that JPMorgan ripped off investors in mortgages, by lending those investors' money to people who weren't going to pay it back. Giving $4 billion of the settlement money to people who got loans and now can't pay them back seems sort of backwards. But oh whatever it's all mortgage badness let's throw billions of dollars at it why not.

Stock exchanges might have a backup plan

NYSE and Nasdaq have had some technical difficulties recently, as you might have heard, and are now discussing a solution where each backs up the other's pricing data feeds so that if one exchange goes down its stocks can be traded on the other exchange. It is a little weird that this can't happen now: After all, pretty much every stock is traded on multiple exchanges, besides its home listing exchange, so when the home exchange goes down for repairs you'd think you could just trade the stock on the other exchanges. But, nope: those data feeds, run by the home exchanges, turn out to be critical. You can't trade a Nasdaq-listed stock on the Philadelphia Exchange, say, while Nasdaq is down, because without the data feeds you don't know what the trading price is on the Pacific Exchange, and securities rules require you to trade at the best price nationwide. This interconnectedness of exchanges is what makes technical difficulties at NYSE and Nasdaq so damaging. But maybe it can be solved by more interconnectedness.