Letter from the Editor

There are big fish and then there are vampire squid. As Goldman Sachs tried desperately to shed its new-found image as a blasphemous, cat-neglecting sea monster by pledging $500m over five years to help small US businesses, its rival JPMorgan was growing ever larger by buying Cazenove, its joint venture partner in London since 2004, for $1.7bn. Another big fish, UBS, set out ambitious three- to-five year targets to return to “sustainable profitability” while its smaller Belgian rival KBC was the latest victim to end up in EU competition commissioner Neelie Kroes’ net.

Meanwhile in Asia future competitors were being spawned. As China and Taiwan took tentative steps towards liberalisation of the financial sector, the mainland’s first ever privately-owned bank, Minsheng, had retail investors clamouring to participate in its initial public offering. In Japan, Mitsubishi UFJ set out plans to raise up to $11.2bn of common stock and increase the nation’s dwindling birth-rate by allowing its bankers to go home two hours earlier.

At the same time two economic whales, the US and China, were gently jostling over calls for a stronger renminbi to smooth global imbalances. The American argument was hardly strengthened by its central banker’s admission that he is as clueless as everyone else when it comes to spotting asset bubbles. His confirmation of capitalist reality came as many small US businesses – which account for 17 per cent of GDP – are still struggling to survive despite signs of recovery. Their lower demand for US commercial property - a market with $2,000bn of debt due to mature by 2013 - points to the potential for further problems.

In the corporate world, more sharks began to circle Cadbury as other former giants such as AOL and GM continued to shrink to size. There will surely be more victims on hooks before it’s all over.

John Casey, Lex publisher

------------------------------------------------------------------------------------------------------ - -