Daily News Roundup 2012: Thursday 15 March
15 Mar 2012
- So, the really big news that’s been rocking Goldman’s world: The Astonishing Case of the Former Executive and the “toxic and destructive” culture of Goldman Sachs. If anyone hasn’t read it, you should (Link: The Letter). The GS folk are laying it on thick with the “sour grapes” line. However, can I just point out that Goldman Sachs doesn’t hire just anyone? They hire the best, the most desperate, the most keen, the most likely to be brainwashed into the Bank’s way of doing things. Not the type that generally emerge after 12 years of employment with a broad and public condemnation of the Bank’s culture. And I will say this about Greg Smith – the gentleman is articulate. And the letter has many tones (disappointment, nostalgia, so forth), but bitterness doesn’t really seem to be one of them. In any case, he’s South African. Instant win. Typically, Greg Smith has attracted criticism (along the lines of “clearly, he’s made enough money that he’s not worried about never working in financial services again”). Link: The Critics. And Goldman lost $2.15 billion of market value. Greg Smith: LIKE A BOSS! Link: Goldman loses 3.4% of Market Value.
- The results of the Fed’s stress tests are out, and 15 of the 19 institutions passed. Basically, the stress testings establish whether the banks have enough capital (or are “suitably capitalised”) to withstand serious economic downturns. Citigroup failed. So did some insurers (who complain bitterly that their business model is different to that of a bank – and therefore their capitalisation tests should be set differently). Either way, the real scandal is that JPMorgan Chase announced a dividend hike at almost the same time, throwing the market into chaos (because Bloomberg tells me so). There is a Fed rule about these announcements and how they shouldn’t coincide – something about maintaining order in the market – and it seems that there was a “misunderstanding”. Someone’s going to get fired. For sure. Link: Banks under stress.
- According to JPMorgan, China is already in the much-feared “hard landing”. There are many analysts that disagree. But the figures that have been pointing in that direction for some time. Link: Chinese economy: landing hard.
- In an awkward moment, the US may have to impose sanctions on India for failing to cut back on its purchases of Iranian oil. According to a recently passed law, if India doesn’t cut back on its Iranian oil purchases, any Indian bank processing oil payments through the Iran Central Bank may be barred access to the US Banking System. Link: The US sanction on India over Iran.
- And the Africa Business News in brief. Link:
- Burundi has predicted that its 2012/13 crop will be around a 107% increase on last season’s.
- Kenya has increased the price of petrol and kerosene, but dropped the price of diesel.
- Zimbabwean Finance Minister Tendai Biti says that the Government will have to close due to low revenues, if the diamond inflows don’t deliver. This makes sense. They can’t borrow. They can’t tax too well. And they can’t print money. Awkward.
- Impala Platinum has caved and handed over 51% ownership in Zimplats to indigenous parties (Bloomberg Article Link: The Forced Hand of Implats).
That’s all for now.
Have a great Thursday.
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