Monthly Archives: October 2008

John Gapper

Oh dear. I seem inadvertently to have fallen into a transatlantic cultural and linguistic divide with my line about Rachel Maddow, the MSNBC host, being a “chirpy gay liberal” in my column this week.

Those three words were picked out by the Huffington Post (you can’t trust the media) and set off a firestorm of protest among its indignant readers. I have also received quite a lot of fierce emails accusing me of insensitivity, homophobia, stupidity, jealousy, ignorance etc.

The last time I looked, there were 500 comments on HuffPo and some of them were not very nice about me. In view of this, and the comments on my blog item below, perhaps I ought to provide some explanation.

The truth is that I did not think about it much. I wanted a quick description of Ms Maddow, since she is the newest of the television talk show hosts whom I mentioned, and the phrase seemed to sum up her brand for those living outside the US.

For many US readers, there were two problems with this. Read more

John Gapper


My column in the Financial Times this week addresses the debate over media bias in the US presidential election and why the Drudge Report has lost its past dominance of the media agenda. Read more

John Gapper

I suspect that we can add Mrs Watanabe to the list of those suffering from global financial turmoil.

The abrupt rise of the yen and the dollar against higher-yielding currencies seems to have been driven by hedge funds unwinding various forms of carry trade – borrowing in a low-yielding currency and investing in assets in higher-yield economies. This has caused havoc in financial markets in the past couple of weeks. Read more

John Gapper

I’m afraid that I have failed, until now, to post a link to my book review in last weekend’s FT of a posthumous collection of reportage by Alistair Cooke, the great British journalist and broadcaster.

The first thing that strikes one about this collection of newspaper and radio pieces that Alistair Cooke filed for the BBC and The Guardian over several decades is that he popped up everywhere. Read more

John Gapper

I have written a response in the Weekend Financial Times to Andrew Lahde’s farewell letter:

Dear Andrew Lahde, Read more

John Gapper

Perhaps it is just me, but I am struggling to understand Alan Greenspan’s revised view of banking regulation. He issued a mea culpa to the House oversight committee, saying that the financial crisis left him a state of “shocked disbelief” that lending institutions had stumbled so badly.

Mr Greenspan, the former chairman of the Federal Reserve, and keen opponent of regulation of the over-the counter credit derivatives market in 2000, partly recanted, saying that the credit default swap market required some form of regulation. That is quite a reversal of his previous position, discussed on this blog beforeRead more

John Gapper


My FT column this week is on the re-emergence of alleged rogue traders at banks such as Caisee D’Epargne. At root, this is a crisis of reckless institutions rather than out-of-control individuals: Read more

John Gapper

I like Dan Gross’s suggestion that there is a link between the number of Starbucks outlets in a country and its risk of being enveloped in a financial crisis. The numbers do not stack up precisely but there is something there.

Here is the theory as Dan explains itRead more

John Gapper

There is a fascinating analysis of how the financial crisis is affecting the United Arab Emirates – including Abu Dhabi and Dubai – in the FT this morning, co-written by Lionel Barber, our editor, who was visiting when a bank bail-out was being crafted.

It makes me think that my recent note on the booming residential property market in Abu Dhabi may have coincided with the top of the market. (I also like the photograph that goes with the article, of Roger Federer playing Andre Agassi on a helipad on top of the Burj Al Arab hotel.) Read more

John Gapper

James Surowiecki of the New Yorker, one of the brightest and most illuminating writers on business and finance, has started a blog.

What with him, Joe Nocera of the New York Times, Justin Fox of Time/Fortune, Daniel Gross of Newsweek, Robert Peston of the BBC and many other print and broadcast journalists drifting online, it feels like a tipping point for business blogging. Read more

John Gapper

Chapter 11 bankruptcy looms for a lot of companies in the US after the initial shock of the financial crisis gives way to recession. This time, however, the likelihood of them being able to re-emerge again after a couple of years in Chapter 11 is not looking high.

Standard & Poor’s estimated this week that the default rate among companies with high-yield debt will rise to 7.6 per cent over the next 12 months. That means that 125 issuers will default in the coming year, which frankly seems more than likely given the shaky state of the US economy. Read more

John Gapper

Oh dear. I suspect that this is only the start of a cavalcade of naming and shaming of Wall Street companies involved in the financial crisis. It is also very bad news for all of those multi-million dollar pay packages and related perks.

Andrew Cuomo, the New York attorney general, has just announced his crackdown on expenses at American International Group, the insurance company that was bailed out after hitting trouble with its financial products business.

Here are the painful details, from Mr Cuomo’s press release this afternoon:

Attorney General Andrew M. Cuomo met today with Edward M. Liddy, the new Chairman and Chief Executive Officer of American International Group, Inc. (“AIG”) In a candid discussion, the Attorney General laid out his serious concerns regarding executive compensation issues and exorbitant expenses at AIG.

 Read more

John Gapper


My column in the FT this week is about the way that banking bail-outs by government became correlated, and the US ended up looking suspiciously multilateral in adopting recapitalisation of banks: Read more

John Gapper

I have been feeling a bit guilty recently about whether I am partly to blame for the global financial crisis.

My guilt relates to the column I wrote on September 10 - which seems like an eternity ago – urging Hank Paulson, the US Treasury Secretary, not to rescue Lehman Brothers. Since then, the received wisdom has become that Lehman’s demise set off the crisis that is still unfolding. Read more

John Gapper

Royal Bank of Scotland is only one of the British banks facing being nationalised by the UK government as a way to prop it up. But its downfall, along with the departure of Fred Goodwin, its chief executive, is the greatest.

The rise of the Scottish banks – HBOS, the group that includes Bank of Scotland – is also receiving an injection of public funds – was one outcome of the last British banking crisis in the early 1990s. They gained a reputation among investors for having handled that downturn better than the English clearing banks. Read more

John Gapper

I have a column in the Weekend FT about bankers’ bonuses and whether they will be able to resume earning lots of money after a pause for the next year or so. I conclude that they have a shock in store.

Gordon Brown, the UK prime minister, says that he is upset at the bankers whom his government has been forced to bail out. “I am angry – I am angry at irresponsible behaviour,” he said this week. “The days of big bonuses are over.” Read more

John Gapper

I have a review in the FT of Matthew Bishop and Michael Green’s book Philanthrocapitalism, a look at the growth of giving by rich people in recent years. This is how it starts:

This is not the ideal time to publish a book on how very wealthy people – including many bankers and business leaders – can do great things. Read more

John Gapper


My column in the Financial Times this week is on who we should blame for the financial turmoil. I say that home buyers and mortgage borrowers bear responsibility as well as bankers. Read more

John Gapper

I have just finished watching Dick Fuld, the chairman and chief executive of Lehman Brothers (RIP), testifying to a US House of Representatives committee on the collapse of his investment bank. The House members picked a dramatic time for the hearing: global stock markets were falling as he spoke.

Testifying in front of politicians after something goes badly wrong at your business, and hurts investors and others, is a thankless task. The best you can hope for is to get out in one piece, having been suitably contrite and humble without admitting to wrongdoing or incompetence. Read more

John Gapper

Picking up the Wall Street Journal this morning, I was greeted with a large advertisement from New York Life, the mutual life insurer, with the slogan: We’re Main Street. Not Wall Street.

Leaving aside the peculiarity of dismissing Wall Street in the Wall Street Journal, it struck me as a good campaign. At times like these, being associated with high finance and capital flight is a bad idea while sympathising with Main Street is all the rage. Read more