The fascinating thing about this is not that public stock recommendations are simply shilling for companies so as to get their investment banking business (and allow the founders to cash out before the company augurs in) -- we already knew that -- but that it's worse in China: There, if your ratings aren't rosy enough, the Communist Party can shoot you!
Even better is the fact that as a company gets into worse shape, the probability of a large investment banking transaction goes up, so the pressure to inflate recommendations increases exactly when the company is in worst shape.
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Date: 2013-07-23 01:55 pm (UTC)Even better is the fact that as a company gets into worse shape, the probability of a large investment banking transaction goes up, so the pressure to inflate recommendations increases exactly when the company is in worst shape.