Top Financial Stories 2012

I generally ask myself at this time of year what were the biggest stories of the past twelve months, in business/financial news.

Of course, I choose the ones I do largely because they illustrate an important theme, and in the list below I'll spell out and italicize the theme. Yet the theme itself isn't the story.

Further, I don't rank them, as in a top ten list. I assign one top story to each of the twelve months.

All that said, here is this year's list.

January: Continuing Recession. Iconic chemicals-and-photography company Kodak files for bankruptcy.

February: Eurozone tensions. Europe manages a restructuring of Greek debt -- private bondholders take a deep haircut. [Speaking more broadly, there has been a change in tone over the course of 2012. The year began with a lot of talk about the breakup of the common currency zone. Greece might have withdrawn and started printing drachmas. For better or worse, there is much less of such talk now.]

March: IP Law. The US Supreme Court decides important patent-law case, Prometheus Labs, re-invigorating an old principle against the patenting of the laws of nature, thereby expanding the intellectual commons.

April: Continuing Recession. Another household name company in trouble? Sony announces plans to cut 10,000 jobs worldwide, though whether it is in Kodak-style trouble is not clear.

May: Banking controversies. JPMorgan's losses on 'hedging' trades out of London by virtue of a "whale" of a trader re-shape the debate over the Volcker rule.

June: Power to tax. The US Supreme Court decides the Obamacare case, upholding most of the provisions of the complicated legislation, invoking the tax power for this purpose.

July: Banking controversies. Barclays bigwigs resign in the face of a Libor-fixing scandal, which soon widens to become a central bankers' scandal. What did the Fed and the Bank of England know and when did they know it?

August: Oil trade. After a good deal of back-and-forth, Sudan and the new (landlocked) country of South Sudan conclude an agreement on the transit of the latter's oil. South Sudan, within days, is discussing with Kenyan a new pipeline that will give it an alternative means of export.

September: Tablet market. Among the (mostly) US based corporations competing to sell us all glowing rectangles, a flurry of competing announcements about new products: from Nokia (Finland), Google, Amazon, and of course from Apple. Evidently not in this picture, Canada's RiM and the long-promised new Blackberry.

October: Power to default. The Second Circuit Court of Appeals finds against Argentina in a much watched dispute over a pari passu clause in the bond documentation.

November: Money market funds. A federal district court jury found two managers of the Reserve Primary fund, an MMF, not liable for the losses of their clients when their fund "broke the buck" in the fall of 2008.

December: US fiscal difficulties. Talks about the looming "fiscal cliff" in the US - various unpalatable tax increases and budget cuts set to come into play automatically unless Congress did something about it, and the manci-depressive chronicles of such talks day by day, dominate financial news all month.

I wish I could leave this year with more of a note of closure, but then: what has concluded, that we should draw conclusions?

A Story About Coleridge

This is a quote from a memoir by Dorothy Wordsworth, reflecting on a trip she took with two famous poets, her brother, William Wordsworth, and their similarly gifted companion, Samuel Taylor Coleridge. We sat upon a bench, placed for the sake of one of these views, whence we looked down upon the waterfall, and over the open country ... A lady and gentleman, more expeditious tourists than ourselves, came to the spot; they left us at the seat, and we found them again at another station above the Falls. Coleridge, who is always good-natured enough to enter into conversation with anybody whom he meets in his way, began to talk with the gentleman, who observed that it was a majestic waterfall. Coleridge was delighted with the accuracy of the epithet, particularly as he had been settling in his own mind the precise meaning of the words grand, majestic, sublime, etc., and had discussed the subject with William at some length the day before. “Yes, sir,” says Coleridge, “it is a maj...

Searle: The Chinese Room

John Searle has become the object of accusations of improper conduct. These accusations even have some people in the world of academic philosophy saying that instructors in that world should try to avoid teaching Searle's views. That is an odd contention, and has given rise to heated exchanges in certain corners of the blogosphere. At Leiter Reports, I encountered a comment from someone describing himself as "grad student drop out." GSDO said: " This is a side question (and not at all an attempt to answer the question BL posed): How important is John Searle's work? Are people still working on speech act theory or is that just another dead end in the history of 20th century philosophy? My impression is that his reputation is somewhat inflated from all of his speaking engagements and NYRoB reviews. The Chinese room argument is a classic, but is there much more to his work than that?" I took it upon myself to answer that on LR. But here I'll tak...

Recent Controversies Involving Nassim Taleb, Part I

I've written about Nassim Taleb on earlier occasions in this blog. I'll let you do the search yourself, dear reader, for the full background. The short answer to the question "who is Taleb?" is this: he is a 57 year old man born in Lebanon, educated in France, who has been both a hedge fund manager and a derivatives trader. He retired from active participation from the financial world sometime between 2004 and 2006, and has been a full-time writer and provocateur ever since. Taleb's writings for the general public began where one might expect -- in the field where he had made his money -- and he explained certain financial issues to a broad audiences in a very dramatic non-technical way. Since then, he has widened has fields of study, writing about just about everything, applying the intellectual tools he honed in that earlier work. As you might have gather from the above, I respect Taleb, though I have sometimes been critical of him when my own writing ab...

Jamesian Philosophy Refreshed

Search This Blog