Philip Stephens writes about the ghosts of sterling crises past in the FT this morning. I only have one observation, as I pass through London on my way from New York to Davos for the World Economic Forum.
It is this: when sterling was at its peak of around $2.10 to the pound and the UK house price and economic booms were at their height, I found it rather frightening to return to my home country bearing my weak dollars. Read more
Without wishing to harp on about John Thain’s last-straw decision to accelerate bonus payments at Merrill Lynch, seemingly to get them in under the wire before the new bosses at Bank of America could cavil, it symbolises a huge clash of consciousness.
On one side are politicians, government regulators, commercial bankers such as those at Bank of America and the general public, most of whom are now outraged at the lavish rewards on Wall Street over the past decade. On the other side stand the investment bankers themselves, who would naturally prefer the system to continue much as before. Read more
I note that Michael Lewis agrees with me about my assessment of his recent anthology of pieces about financial crises. He too thinks it was deceptively marketed by the publisher, and feels ashamed.
Here is what I wrote: Read more
Reputations get shredded fast in a financial crisis, but the speed of John Thain’s descent from hero to zero is extraordinarily rapid.
In mid-October, he seemed like the smartest guy in the pack, delivering Merrill Lynch into the hands of Bank of America for $50bn during the weekend that Lehman collapsed and obtaining a premium for Merrill shareholders amid the chaos. Read more
My FT column this week is on bank nationalisation (and, for regular readers, contains a mea culpa on Lehman Brothers): Read more
I am afraid I failed to post my review in the Weekend FT of Steven Johnson‘s new book, The Invention of Air. Here it is:
Joseph Priestley was an awkward, provocative man who so angered a royalist mob in Birmingham in 1791 that it burned down his house, complete with all his scientific equipment, and propelled him to the New World. Read more
One passage of Barack Obama’s inaugural speech as US president that struck me forcibly was his reference to the economic crisis and his assertion that “the national cannot prosper long when it favours only the prosperous.”
The full quote was as follows: Read more
I can see why Gordon Brown is annoyed at the former management of Royal Bank of Scotland, given that his government has had to take a 70 per cent stake in the bank in order to keep it afloat.
Still, I wonder about the prime minister’s portrayal of its problems being caused by foreign adventures such as its role in the ill-timed acquisition of ABN Amro. The implication is that things would have been all right if RBS had stuck with being a UK bank, taking deposits and making loans at home. Read more