Wednesday, November 29, 2006
Chronicle of a death Foretold: Dollar woes
"I didn't warn him because I thought it was drunkards' talk,"
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Hank Paulson must be wetting himself laughing. First he gets to defer the tax on all his shareholding in Goldman, now the dollar is finally on the road to collapse which should , if it falls long enough and far enough, give the US economy a helping hand. Finally he has intimated that Sarbanes-Oxley in its current guise is not a great way to do business, so he'll just copy the UK regulator. Good work, why not model yourself on the FSA, they 're pretty effective. I think this is called adopting best practice or plagiarism or stupidity.
I have discussed the inevitable dollar decline last year in a previous blog, rather than repeat myself and bore everyone - go and look at the piece called Currency Movements Dollar/Sterling:No way but down in the November 2005 archives. Nothing has changed, except the people in charge of the US economy are more inexperienced and incompetent than the lot before.
Anyway Hank and Ben are off to China soon to persuade the Chinese that the renmimbi needs to appreciate- all this while China is slowing trying to diversify out of dollar reserves. All very fishy.Why is Ben Bernanke going with Hank anyway? What does he have to add?Financial Markets are notoriously irrational.They react very negatively to bearded people. See if you can think of any serious banker in the world with a beard ( except Joseph Perella). Unlikely. Maybe it's somekind of comedy double act, maybe they're making a film in the Ealing tradition.Carry on Central Banking.
Practical Implications of dollar depreciation
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Hank Paulson must be wetting himself laughing. First he gets to defer the tax on all his shareholding in Goldman, now the dollar is finally on the road to collapse which should , if it falls long enough and far enough, give the US economy a helping hand. Finally he has intimated that Sarbanes-Oxley in its current guise is not a great way to do business, so he'll just copy the UK regulator. Good work, why not model yourself on the FSA, they 're pretty effective. I think this is called adopting best practice or plagiarism or stupidity.
I have discussed the inevitable dollar decline last year in a previous blog, rather than repeat myself and bore everyone - go and look at the piece called Currency Movements Dollar/Sterling:No way but down in the November 2005 archives. Nothing has changed, except the people in charge of the US economy are more inexperienced and incompetent than the lot before.
Anyway Hank and Ben are off to China soon to persuade the Chinese that the renmimbi needs to appreciate- all this while China is slowing trying to diversify out of dollar reserves. All very fishy.Why is Ben Bernanke going with Hank anyway? What does he have to add?Financial Markets are notoriously irrational.They react very negatively to bearded people. See if you can think of any serious banker in the world with a beard ( except Joseph Perella). Unlikely. Maybe it's somekind of comedy double act, maybe they're making a film in the Ealing tradition.Carry on Central Banking.
Practical Implications of dollar depreciation
- Cheaper holidays in US denominated regions. These places are now verging on the reasonable value. http://www.jumbybayresort.com. www.sandylane.com
- Lower bonuses when converted to sterling, unless you've already elected a rate for conversion
RB
Friday, November 24, 2006
New Crimes in Financial services: Keeping the FSA/compliance Bozos in Jobs.
Look at the front of the FT today. One of the headlines is 'Trader fined for passing 'outsider' information'. The article is at http://www.ft.com/cms/s/6a6012d8-7b2e-11db-bf9b-0000779e2340.html. The facts seem to be that an equity salesman passed on publicly available information dressing it up in sales patter, and passing it off as though it were inside information, in a rather amateurish fashion. So the nice boys in the CSFB compliance department reported him to the FSA. See and all the business lines always complain that the compliance department does nothing. They are a dynamic hot bed of regulatory activity. So the FSA now fines the poor man £20,000.In the absence of being able to catch anyone actually committing real 'insider trading', it seems now it's ok to get people for 'outsider trading'. So literally following the FSA's logic, outside is inside, therefore up is down, losses are profits, so market abuse must be compliance. So why do we need compliance functions or the FSA?
RB
RB
