The Great Debate

Morgan Stanley stumbles in rough trading

October 20, 2010

Morgan Stanley has paid a steep price for trying to trade its way through tough markets and has failed to reap much of a reward.

There is no such thing as inflation

October 18, 2010

In 1987, UK Prime Minister Margaret Thatcher whipped up a firestorm of criticism from her opponents on the left when she told a magazine reporter that “there is no such thing as society”, only individual men and women, and families.

The wrong sort of inflation

October 15, 2010

Chairman Ben Bernanke’s Fed is beset by demons of its own design.

Terrified by memories of the 1930s and Japan’s more recent experience in 1990s and 2000s, the academics who now dominate the Federal Open Market Committee display a hyperactive compulsion to tinker with monetary policy in a bid to solve all the problems besetting the U.S. economy.

Central banks open Pandora’s Jar

October 12, 2010

In Greek mythology, when Pandora opened her jar the ills of the world sprang out, leaving only hope behind. Once out, the contents could not be captured and put back. Pandora could not undo what she had wrought.

Cross-dressing in fiscal, monetary policy

September 30, 2010

“For what is a man profited, if he shall gain the whole world, and lose his own soul?” (Matthew 16:26)

Gold as the “ultimate bubble”

September 30, 2010

Billionaire financier George Soros this month repeated his warning gold is locked in the “ultimate bubble”, and told investors bluntly it was “certainly not safe” in troubled times.

Central banks face crisis of confidence

September 29, 2010

Central banks around the world are facing the worst crisis of confidence since the 1930s, as investors, households and firms question their commitment and ability to deliver price stability.

Wanted: more commodity hedgers

September 13, 2010

For the last decade, investors such as pension and hedge funds have been the fastest-growing segment of commodity derivatives markets. The most successful banks and dealers have been those which marketed themselves most effectively to this new group of customers.

Forecasting and its discontents

August 27, 2010

“Prediction is very difficult, especially if it’s about the future,” is attributed to a long list of people. Even with that in mind, however, the first eight months of 2010 have been especially unkind to professional forecasters and investors as markets have lurched between extremes of pessimism and optimism.

Betting on tail risk seriously endangers your wealth

August 23, 2010

Investment strategies designed to benefit from tail risks are fast becoming the next bubble. Investors are paying over the odds to reap benefits from remote catastrophic risks and are ignoring more moderate but much more likely outcomes that will cost them a great deal in the interim.