Jamie Dimon – For sale, one petard, hardly used

Today JPMorgan, America’s biggest bank and one of the monsters of the 2008 bailout season ($25 billion), ‘revealed a surprise trading loss of $2bn (£1.2bn) on complex investments made by its traders’ (BBC, today) Fortunately JPMorgan’s CEO, Jamie Dimon (for whose name Microsoft’s spellchecker corrects to ‘Demon’), is a man of principle. To be precise, ...

Quote of the week

A fascinating insight into the world of serious money from one of its architects: The wealth management business will not run out of business but will be impacted if it starts asking questions about whose money this is. (John Sfakianakis, chief economist at Banque Saudi Fransi, ‘Quote of the Week’ at www.WealthBriefing.com, on 17 June ...

Our heroic bankers take on the evil dictators

According to the March 2011 edition of Private Banker International, ‘at least $235 billion of illegal assets are held in offshore accounts opened by the wealthy, including those taking advantage of their government positions in the Middle East and North Africa. That is equivalent to 15 percent of the total $1.5 trillion held offshore by ...

Shakespeare on bubbles

BanquoThe earth hath bubbles, as the water has,And these are of them.Whither are they vanish’d? MacbethInto the air; and what seem’d corporal meltedAs breath into the wind.Would they had stay’d! BanquoWere such things here as we do speak about?Or have we eaten on the insane rootThat takes the reason prisoner? Macbeth, Act 1 Sc.3 The ...

National budgets and global economies

George Osborne delivers his first budget and insists that it is fair. I’m not sure what he means by this, but it is hard to see how it can be. Regardless of what Mr Osborne wants, he simply lacks the political levers needed to control the economy or to decide who bears the burden of ...

Dear Lloyd

Mr L. BlankfeinCEO SuiteGoldman SachsTuesday, 18 May 2010 Dear Lloyd How are you? Well, I hope. I appreciate that you must be busy these days, what with the SEC investigating you and so on, but I thought I’d write anyway – perhaps, like me, you find that a little personal news can brighten up a ...

Repo 105 – Symptoms or disease?

As I asked in the previous entry about the swelling scandal surrounding Lehman’s use of the so-called repo 105 accounting dodge, ‘Coming to a bank near you soon? Already arrived but no one has told you? Never forget Enron and Arthur Andersen.’ So yesterday the Securities and Exchange Commission, who regulate US markets, initiated their ...

Repo 105 – another Enron in the pipeline?

In the arcane terminology of the markets, a ‘repo’ is a transaction in which I sell you something today but guarantee to buy it back for a stated price at some stated time in future. ‘Repo’ is actually short for ‘repurchase’. Dull, huh? Well, it may turn out to be a little more exciting than ...

Was it caused by fractional reserve banking? Not really.

Almost a year ago, I wrote an entry in my parallel environmental blog entitled Why capitalism must expand – whatever the environmental consequences. Rather surprisingly, yesterday I received a comment, from Jerry Fox, an American engineer and blogger. His comment ran as follows: Capitalism supported by fractional reserve banking and the artificial support of governmental ...

Warren Buffett on financial CEOs

From Buffett’s characteristically frank Chairman’s letter in the 2009 Berskshire Hathaway annual report (p.18): In my view a board of directors of a huge financial institution is derelict if it does not insist that its CEO bear full responsibility for risk control. If he’s incapable of handling that job, he should look for other employment. ...