Goldman Sachs’ income from trading and principal investment rose 90% in the third quarter, while allocated remuneration per employee soared 46% to $527,000 in the first nine months of 2009. Good luck to them, but it shows once again that they and to a lesser extent the rest of Wall Street, are currently playing a […]

The Financial Times last Tuesday noted a disturbing new trend – hedge fund and other investors are increasingly seeking to invest in physical commodities themselves, rather than in futures. Given the excess of global liquidity, this is not entirely surprising. It does however raise an ominous possibility of a supply shortage in one or more […]

The Federal Open Market Committee in its latest statement September 23 announced that it was considering ways to reverse the unprecedented torrent of liquidity it has pumped into the US financial system, but that interest rates will remain near zero for a prolonged period. Apart from the question of when the Fed should move, that […]

A new webzine CFOZone has highlighted a study showing that companies which declare “pro-forma” earnings (dolled up by management to reflect the most favorable assumptions) suffer increased attention from short sellers, about $1.3 million worth after the pro-forma earnings declaration. This is good news; it suggests that the market is becoming hostile to attempts to […]

French President Nicholas Sarkozy has leaped with glee on the proposal by a commission headed by Joseph Stiglitz to redefine Gross Domestic Product. After all, if feminine attractiveness, length of vacations and quantity of garlic in the food can be included, France will rank much higher than in more old-fashioned measures. Plus, the existence of […]

Optimism is breaking out all over. The stock market is up 50% since early march, and pundits are discussing how long it will take to get back to the levels of 2007. The economy appears to be recovering nicely, and the Obama administration is attempting to claim credit for causing it to do so through […]

Economists’ crystal balls are clouded right now. They see signs of a burgeoning global recovery, but retail sales and other key data surprise with their weakness. There is no sign of inflation, yet commodity prices are extraordinary strong, given we are in the depths of a major recession. The reality is that fiscal and monetary […]

The Basel Committee on Banking Supervision last week issued new guidelines for mark-to-market accounting by banks. The new guidelines relax the requirements for using mark-to-market in downturns, failing to address the fundamental problems that helped to get the financial system into the current mess. Mark-to-market accounting, like the credit default swap, is a novel technique […]

As the world awaits with bated breath the revised Congressional Budget Office projections for the federal budget deficit in 2009, 2010 and beyond, one thing must remain perfectly clear. There is no way that the capital markets will put up with sustained US budget deficits over 10% of Gross Domestic Product. Since the current political […]

“I don’t see how you young chaps are going to make any money at all” said Sir Kenneth Keith to me in 1978 when told that insider trading was about to be made illegal in the UK, as it already was in the US. How wrong my esteemed merchant bank chairman was. Far from its […]