1 Oil’s fall ‘set to continue’ (BBC) Oil prices are
likely to continue falling well into 2015, the International Energy Agency has
said. The IEA, a consultancy to 29 countries, said weak demand and the US shale
gas boom meant crude's recent fall below $80 a barrel was not over. On Friday,
Brent crude traded at $78.13 a barrel, near a four-year low.
"Barring any new supply problems, downward
price pressures could build further in the first half of 2015", IEA said. The
organisation, set up after the "oil shock" of the early 1970s to
advise major oil importing countries, said that pressure was building on the
Opec oil producers' group to restrict supply to bolster prices. However, there
have been reports that Saudi Arabia, Opec's key member, is not yet willing to
turn off the taps.
Also, it is likely that oil and gas explorers will
become increasingly worried that falling prices will make exploration
uneconomical. Brent has fallen for eight weeks in a row, its longest losing
streak since 1988, according to Reuters' data. The US energy department said this
week that it expected low fuel prices to last into next year.
2 Biz schools churn out most billionaires (Julie
Balise in San Francisco Chronicle) Harvard Business School's MBA program has
produced more billionaires than any other business school, according to a report
from Wealth-X.
With 64 billionaire MBA alumni, the Cambridge,
Massachusetts-based school has nearly three times as many as runner up Stanford
University. Seven of the top 10 business schools with the most billionaire
alumni are based in the US. Three of them are Ivy League colleges.
While the recent Wealth-X study focused on MBA
programs, several of those colleges also appear on the list of schools with the
most billionaire undergraduate alumni, released by Wealth-X in October.
University of Pennsylvania took the top spot on that list, with 25 billionaire
undergraduate alumni, followed by Harvard University.
There are 2,325 billionaires in the world, with a
combined net worth of $7.3 trillion, according to the Wealth-X and UBS
Billionaire Census 2014. Europe is home to more billionaires than any other
continent, while the US has more billionaires than any other country. New York
City has the largest population of billionaires of any city.
3 Banking is changing, but corruption stays (Will
Hutton in The Guardian) Another week, another financial scandal. Six global
banks, including RBS and HSBC, were fined £2.6bn last week for rigging the
foreign exchange markets. Since 2008, total fines levied in Europe and the US
for banking crimes and misdemeanours now top £100bn, with banks making
provision for a further £60bn. British banks alone have set aside an estimated
£30bn for fines, provisions and litigation costs.
What has gone wrong with western finance? The
systemic ripping off of customers continued after the financial crisis to
constitute what is now the biggest-ever global corporate scandal. Banks
worldwide duped clients into buying products that were either not needed or
provided no purpose. Worse, they organised financial markets whose purpose was
to serve their own interests rather than those they purported to serve. It has
proved a hard habit to break.
Banking itself is being reformed. The implementation
of the Vickers commission proposals will separate commercial banking from
investment banking in five years’ time, and proprietary trading will become
ever harder. The FCA’s increasingly tough stance and astonishing fines will
incentivise bank managements to stop indulging the traders who have landed them
in such trouble.
And yet reading the chatroom banter, with its echoes
of the banter over mis-selling PPI, rigging interest rates or derivatives,
offers a window into a very degraded culture. Making money from money, with the
clients’ interest last, is too dominant an element in the culture of investment
bankers. This is not an environment where good flourishes. For that we need a
much deeper change of heart, a process that, I suspect, will need more crises
before it becomes more widely accepted as imperative.
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