It is generally not apparent at the time, but some years in retrospect get suffused with a golden nostalgia, as events take an unexpected and unpleasant turn afterwards that leaves them remembered as the “last good year.” In some cases, this nostalgia happens immediately, as a major war or a huge depression breaks out, cutting […]

The new liabilities tax on banks announced by President Obama last week will probably raise the revenue he wants, $117 billion over 10-12 years – but its effects on the industry will not be what he thinks. Congress’s attempts at financial sector “reform” are also doomed to add bureaucracy without providing significant additional protection against […]

Warren Buffett, whose Berkshire Hathaway owns 9% of Kraft, last week threw its takeover of the British chocolate company Cadbury PLC into more doubt when he said he would vote Berkshire’s shares against a rights issue that Kraft was proposing to consummate the Cadbury deal. His action was regarded as surprising, because the majority of […]

It being January, I am drawn irresistibly to the British prime minister Benjamin Disraeli’s only significant contribution to monetary policy thought, his comparison of a particular step to the supposed Naples miracle of the liquefaction of St. Januarius’ blood. His comparison, far-fetched though it seems, was instructive and it’s well worth considering whether there are […]

The 2000s were a pretty good decade for Bears. The Standard and Poor’s 500 Index is down 24% in nominal terms from December 1999 or approximately 30% when dividends and inflation are taken into account. Four of the years were Bear triumphs – 2000, 2001, 2002, and 2008. It’s the best Bear decade since the […]

It must surely have become obvious from both the catastrophes of 2008 and the bumper profits of 2009 that the investment banking/trading business, whether through independent behemoths or within even larger commercial banks, simply isn’t working. Now that “too big to fail” bailouts by taxpayers have been established, risk management in the industry is a […]

We’ve now lived through the same new disaster twice. Computer simulations, more or less universally adopted as the solution to a major problem, turned out to have been based on flawed assumptions and faulty data. As a result policy or markets became heavily skewed in an inappropriate direction. Wall Street’s risk managers and climate change […]

Gold broke through $1,200 per ounce this week, on rumors that the People’s Bank of China might increase the percentage of gold in its reserves. The dollar, the euro, sterling and the yen all have good reasons to weaken, yet in our current global fiat money system they have nothing to weaken against. Global foreign […]

The collapse of Dubai World is pretty unsurprising; when examined closely the Dubai real estate market was always likely to prove a gigantic bubble. It does however raise the question: how many other pockets of rot are around globally, left over from the cheap money boom of 2003-07 and likely to plunge the world’s markets […]

The publicity and vituperation around the book tour of a middling ex-Governor of Alaska seems to have nothing to do with Sarah Palin’s politics, which judging from her term in office are unexceptional and only center-right. The heat derives from her style, which is that of an iconoclast outsider, and from the establishment’s fear that […]