Part 1 considered the enormity of the scale of the Investigations Committee’s task in sifting the evidence for this report. Now we turn to the broad outlines of the sketch it has produced. As part 1 made clear, the mountains of paper and electronic based documentation generated through the crash is enough to fog anyone’s brain, but the Committee did a fine job of holding to the main flow of the river, as it were, and did not get swept up into cul de sacs or lost in the minutia of it all, tens of millions of pages of evidence notwithstanding...
Investment managers who haven’t lived through at least two bear markets are bound to make serious blunders, a bit like jockeys who haven’t yet fallen off a horse. The fact they have never experienced the joys of ending up face down in the mud, as their horse advances riderless and aimlessly, means they probably don’t know the meaning of risk and have a tendency to lose their backers' money.
Shortly after the World Economic Forum in Davos in February, I highlighted the fact that there was much talk in the corridors of Davos about a deal that would see Greek debt extended for 25 to 30 years, with bond holders taking a 30% haircut. That story dropped out of sight after Davos but it has now resurfaced big time. In the run up to Easter the markets suddenly got the idea that Greece might be about to default over the Easter weekend and the interest on three year Greek debt shot up to 21%.
Japan’s Tepco (Tokyo Electric Power Company) seems to be on a winning path, finally, in its long struggle to get on top of the nuclear meltdown at its damaged Fukushima nuclear plants. The 45-meter-high tsunami which struck the plant on March 11 rocked the global nuclear industry to its foundations and put question marks over reactor builds across the world...
Current drivers of record gold prices may be unsustainable moving forward. After exhibiting few signs of life during much of the 1980s and 1990s, gold prices have revived during the last 10 years, climbing more than five-fold from the 2001 average price of less than $300 per ounce to more than $1,400 today.
The US Senate Permanent Subcommittee on Investigations, part of the Committee on Homeland Security and Governmental Affairs, has finally concluded its mammoth investigation into the crash of 2007-2009. Titled Wall Street and the Financial Crisis: Anatomy of a Financial Collapse, the report is a cracking read.
The scale of China’s strategy for renewable power generation is not widely grasped or appreciated in the West. Japan’s horrendous difficulties with the Fukushima nuclear reactors in the wake of the tsunami has made the Chinese government revisit its nuclear strategy, which had been – and still is – a major part of its energy policy.
Speaking at a pensions summit in the Netherlands, Professor Laurence Kotlikoff of Boston University told delegates that the global financial system – which remains largely unreconstructed despite near implosion following the collapse of Lehman Brothers two years ago – is a massive con trick, characterised by lack of transparency, and largely made up of fraudulent guarantees and financial promises that cannot be kept.
The response of the European Union to the unfolding eurozone sovereign debt crisis has, so far, been of the headless chicken variety. Or to put it more politely, it has revolved around treating the symptoms rather than the causes of Europe's closely interwoven sovereign debt and banking crises. Brussels has been sticking the equivalent of Band-Aids on limbs that in fact need much more radical surgery.
What is it about politicians that makes them think we’re all stupid? Is it because we are? I think not, though taken as that pliable mass, “the general public”, we sometimes act as if we were. But the “public” are, hopefully, becoming a lot less lethargic and a lot more interested in holding governments to account.