Showing posts from February, 2011

In Defence of Bank Bonuses

Well, that's an inflammatory title, isn't it? I'll probably get lots of abusive remarks, and lots of people won't even bother to read this post because of the title.  But I really feel that someone needs to set the record straight, because there is an AWFUL lot of rubbish being spouted about bankers' bonuses at the moment. The first thing to note is that banks pay bonuses to three different groups of people.  From the headlines you would think that only senior bank executives receive bonuses. But two other groups also receive bonus payments: - traders - ordinary bank staff. Let's look at the bonuses paid to these three different groups of people. 1.  Senior executives. These are the headline-grabbing figures. Bob Diamond (CEO of Barclays) awarded bonus of about £9m. Stephen Hester (RBS) paid a bonus of £2.04m. Eric Daniels, outgoing CEO of Lloyds, received £1.45m. Doesn't it make you see red? From the headlines you would think that these people

The Foundation of Short Selling

This is my response to George Monbiot's poorly researched and inaccurate article about Short Selling in the Guardian on 15th February 2011. It is not surprising that Monbiot evidently understands nothing about short selling as a practice, and that he doesn't even seem to have understood the documents he references in his article, since in the detailed account he gives of his life on his blog nowhere is mentioned any study of banking, finance or financial markets. None the less his ill-informed writings are enormously influential, and that is why I feel obliged to write something to set the record straight, even if my ramblings are only seen by a few people. I'm aware that lots of people find financial terms difficult to understand, and I don't want to give anyone brainache.  So instead of talking about money and various types of financial transaction, I'm going to talk about makeup.  I sell it, you see.  I work for a company that sells makeup. I did a naked shor