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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
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Goldman Sachs
The bank’s most precious asset – its awesome reputation – is turning as toxic as a pile of rotting collateralised debt obligations
JPMorgan Cazenove
The too big to fail just got bigger as JPMorgan, which weathered the financial storm better than everybody else, consolidates its position
Taiwan / China
If they cannot agree on ways to address President Obama, what chance a satisfactory agreement on cross-strait liberalisation of the financial sector?
Renminbi appreciation
However perplexing for politicians or investors long renminbi forwards, China’s position on its currency is entirely reasonable
Bernanke blowing bubbles
Finally a central banker has admitted he is as clueless as everyone else, but arguing over the rally is short-sighted – powerful shifts are occurring
US small businesses
While the economy appears to be recovering, many small businesses are suffering
US commercial property
US authorities face looming problems in commercial real estate, with more than $2,000bn of debt maturing by 2013
Cadbury
Word that Hershey of the US and Italy’s Ferrero are thinking of putting in bids hardly constitutes a Kinder Surprise
New & improved GM
Post-bankruptcy financials show a viable company but little chance of recouping bail-out investment.


