There are many gems in the annual report of the Bank of International Settlements that came out on Sunday. One of the most intriguing is a trail which leads to an actual estimate of the cost to society of scientists becoming hedge fund managers.
The trail starts at a section about debt sustainability across a number of countries. It notes that elevated levels of debt got us into this crisis and the situation still hasn’t improved for many countries. In fact, for some countries, the debt burden of the private sector has gotten even worse. Check out the last row of these charts on debt service ratios (looking at the red lines): Read more
Before the break, FT Alphaville took a look at abstraction and morality in modern finance. This prompted some rather interesting discussion, among which this post from Interfluidity:
Finance has always been complex. More precisely it has always been opaque, and complexity is a means of rationalizing opacity in societies that pretend to transparency. Opacity is absolutely essential to modern finance. It is a feature not a bug until we radically change the way we mobilize economic risk-bearing. The core purpose of status quo finance is to coax people into accepting risks that they would not, if fully informed, consent to bear. Read more
The disconnect between oil prices and copper prices is gaining increasing attention.
Naturally, the curiosity boils down to the fact that while oil prices are rising, copper prices are doing anything but: Read more
While FT Alphaville is not aimed at a retail investment audience*, we do attract a small number of “what should I do with my pension?” and “isn’t GKP amazing?” type commenters.
So it was with interest that we noted the results of a Harris Interactive survey which found that: Read more
London has lost its crown as the pre-eminent home of banking and finance, as it tied for the first time with New York in the latest ranking of financial centres. Fears about a regulatory backlash and new taxes drove down London’s score by 14 points to tie with New York at 775 points, in the Global Financial Centres Index compiled by Z/Yen for the City of London Corporation. Read more
Joshua Brown over at The Reformed Broker has a wry post on all the news items that the media (including the blogosphere) remains obsessed with, but which the markets no longer seem to give a fig about.
Brown’s topics range from “unemployment” to “nefarious investment bankers,” by way of “The Twilight Trilogy.” Read more
PR firm Hill & Knowlton has begun to dabble in an arena usually reserved for its banking clients: modelling.
As the Gorkana PR service reported on Thursday: Read more
REMARKS BY PRESIDENT BARACK OBAMA
SUBJECT: ADDITIONAL REFORMS TO THE FINANCIAL SYSTEM Read more
On Thursday, AP Moller Maersk — the world’s top container shipping company — spooked shipping industry watchers when it reported deeper than expected losses of $706m for the nine months to September, and said it would still be in line for a yearly loss of $1bn.
But we thought another, even larger shipping-related number published in the New York Times was also worth highlighting. Read more
US readers may not be familiar with the brilliantly satirical comedy of the Johns Bird and Fortune, but those based in the UK will know them from Channel Four.
The Two Johns and their co-conspirator Rory Bremner have skewered a range of topics, including Washington diplomats and the war in Iraq. Most recently, they took on the subprime crisis and provided a guide to understanding the financial crisis. Read more
Over at the Economist’s Free exchange blog, a handful of top-flight economists (as one would expect) have been engaged in a lively debate on the optimal size and complexity of developing countries’ financial systems.
Mark Thoma has been keeping track of the roundtable, which is hosted by Justin Lin, the chief economist at the World Bank and which kicked off with a guest essay by Lin in the print edition of the Economist and migrated online. [As an aside, clever integration there guys] Read more
Alistair Darling’s blueprint for reforming the financial regulatory regime on Wednesday failed to impress the City and drew withering fire from the Conservatives, who vowed to reverse the report’s main proposals should the party win the next election, the FT reported. The City, meanwhile, reacted coolly to the proposals. “This is just a deferral of any decisions until after a general election,” one senior banking executive told the FT. Read more