I’m glad to see that there is still a good amount of humour in-and-among all of the doom and gloom in the financial world. The meme-jumping Sad Guys on Trading Floors blog offers a certain amount of schadenfreude although it’s worth pointing out that not everyone in the industry is earning the obscene salaries oft-quoted. There’s also this mock cover of The Economist that made me giggle. Going back a few years gives us this extremely prescient Dilbert cartoon from 2002.
It wasn’t just Scott Adams who saw that problems may lie ahead. At the start of the year Bloomberg.com columnist Michael Lewis surmised:
I can’t think of another example of a big Wall Street firm saying so clearly through its trading positions as Goldman Sachs did over the past year that it thinks the rest of its industry, including its own people, is a bunch of idiots.
Continue reading ‘Money, money, money’
From The Independent last week:
If you had purchased £1,000 of Northern Rock shares one year ago it would now be worth £4.95, with HBOS, earlier this week your £1,000 would have been worth £16.50, and £1000 invested in XL Leisure would now be worth less than £5, but if you bought £1,000 worth of Tennents Lager one year ago, drank it all, then took the empty cans to an aluminium re-cycling plant, you would get £214. So based on the above statistics the best current investment advice is to drink heavily.
Of late, in-and-among the pop-culture dross that seems to somehow pass itself off as newsworthy, I’ve noticed a lot of items on the state of the stock markets.
I do understand the basic tenets of commerce. However, the exchange of currency for goods or services rendered is about as far as my understanding of the financial world goes. Take, for example, the €4.9 billion loss made by Societe Generale which has been attributed to just one of their traders, Jerome Kerviel. Where has all that money ended up? At the other end of the spectrum is the $11.6 billion made by Goldman Sachs in 2007 by gambling against everybody else. Michael Lewis sums it up and concludes Goldman Sachs assumed that everyone in the industry (including their own employees) were “a bunch of idiots”.
I am also curious as to why this speculation is given protection by the government. Of course, I’m talking about the £25 billion bailing out of Northern Rock. Alistair Darling is obviously defending his actions but I don’t see why other forms of gambling are not given the same protection. I understand that my pension is affected somehow. Just how different is this to when I lose money in the casino?
In an attempt to find out more about this befuddling area I came across an interview with a hedge fund manager. I think I’ll have to read it again a few times as the only thing that is currently sticking in my mind is an arcane Simpsons reference. For now I’m going to rely on Bird and Fortune to simplify things for me and make me chuckle at the same time.
Update: The YouTube video is no longer available.
