The last 30 years have been notable for the rise of hedge funds, organizations that compete with the top Wall Street investment banks in remuneration, while charging their investors fees far above those traditional for investment management services. Hedge funds had a mixed record in 2007-08; there were several large failures but also some notable […]

New York Times columnist Paul Krugman, in a talk show August 14, remarked that the fiscal stimulus caused by a fake Alien invasion of the United States would best rescue the U.S. economy, providing the inflation and growth that according to him it needs (a real Alien invasion would be equally efficacious, but might cause […]

The decision by Standard and Poor’s to downgrade the U.S. credit rating to AA plus caused a stock market slump and an extraordinary rally in U.S. Treasuries, the latter further proof if you needed one that markets are often irrational. In spite of Ben Bernanke’s Flying Dutchmen-like attempt Tuesday to nail interest rates to zero […]

The potential downgrade to AA in the U.S. credit rating has exposed one massive fallacy of modern finance: there is no such thing as “risk-free” investment. Much of the modern finance canon will need to be re-written, or better still, scrapped altogether. However this discovery has considerable implications even for those of us who adhere […]

The warning by Standard and Poor’s that there was now a 50% chance that it would downgrade U.S. Federal debt from its traditional AAA-rated status has concentrated a lot of minds, in Washington and elsewhere. At one level it has forced commentators and investors to recognize that without the United States and the European countries […]

In previous pieces I have compared the current global political and economic situation to the 1930s, suggesting that neither economically nor politically is the current position so dire, but that there are important similarities. However a much closer comparison is to the 1970s – not to the U.S. 1970s, a relatively benign comparison that has […]

The 2008-9 Great Recession centered on the wealthy Western economies with emerging markets suffering significantly shorter, less painful downturns. Then in 2009-11 the emerging markets, particularly the BRIC countries (Brazil, Russia, India and China — so named by Goldman Sachs’ Jim O’Neill in 2001) soared ahead of the wealthy West, leading to considerable talk of […]

The 1930s is remembered in the United States as a period of economic despair, with unemployment well into double digits throughout the decade and a generation’s lives ruined. In Britain it is remembered as a “Gathering Storm” with satisfactory economic performance after 1932 marred by an increasing fear about the inevitability of future conflict with […]

As Voltaire remarked in his 1759 masterpiece Candide “in this country (Britain) it is good to kill, from time to time, an admiral to encourage the others.” Admiral John Byng, shot in 1757 for losing Minorca, is generally thought to have been unfortunate in his fate. Nevertheless the treatment worked. Only two years later Sir […]

A Wall Street Journal article last weekend suggested that discomfort with novel applications of technology such as Twitter was a function of age. By refusing to sign on to Facebook or buy the latest expensive gadget one was merely confessing to being old (the author claimed to be 33, and seemed worried about the symptoms […]