In one of the longest news articles I can remember reading in the New York Post, the SEC's Meagan Chung -- the woman who investigated Bernie Madoff in 2005 and cleared him of fraud -- tries, unconvincingly, to defend herself. Instead, she comes across as even less competent than we thought:

[Said Cheung:] "If someone provides you with the wrong set of books, I don't know how you find the real books." ...
Regarding Madoff specifically, Cheung said, "I never met the man."...
Markopolos gave the investigators a long memo that flatly said that "Madoff Securities is the world's largest Ponzi scheme."...
Soon after, in January 2006, the New York branch of the SEC opened an enforcement case on Madoff based on Markopolos' claims. The document authorizing that probe is signed by three SEC staffers: Cheung, attorney Simona Suh, and Assistant Director Doria Bachenheimer.
But after interviewing Madoff... the SEC probe "found no evidence of fraud," according to a case closing recommendation signed off by those three staffers.

The first quote here is utterly damning: Cheung seems to be saying that unless a fraudster actively cooperates with the SEC, there's no]]> 2009-01-07T19:10:37+00:00 http://www.spectator.co.uk/business/trading-floor/3214016/hurrah-for-markets.thtml OK, some of the things said about markets are not entirely and wholly true. They do not cure athlete's foot nor do they ensure that middle aged jounos are continually surrounded by blog groupies (alas and alack!).

However, they do often have within them the seeds of the corrections to their own problems.

The monthly survey of recruitment consultants by KPMG and the Recruitment and Employment Confederation shows that the contraction of the labour market accelerated in December with the number of people placed in permanent and temporary jobs falling at the sharpest rate since the series began in 1997.

Measured against an index where 50 represents no change, permanent placements were 25.8 in December compared with 27.7 in November, and billings for temporary staff were 29.1 on the index, down from 30.9.

As power shifted increasingly away from workers and towards employers, average salaries for new permanent placements fell for a third month in December to 40.3 from 42.

"Anecdotal evidence suggested that rapidly rising levels of staff availability had diluted candidates' bargaining power," the report says.

Much labour is currently being offered at more than buyers wish to pay]]> 2009-01-07T18:03:16+00:00 http://www.spectator.co.uk/business/trading-floor/3213996/the-austrian-view.thtml This looks like good news to me.

Despite existing business owners confidence levels collapsing since last September, start-up activity has remained remarkably resilient, shaking off an early decline in the Spring to end the year only marginally lower than in 2007.

The number of new businesses opening their doors in the three months to September fell by just 4pc to 129,282 against expectations of a slump of between ten and 15pc, according to the latest industry analysis from the British Bankers' Association.

Now it does depend a little on your view of what a recession is. Mine about all recessions is that they're not about people losing their jobs. That happens a lot in any market society. A recession rather is when those who have lost them can't find a new one: that's what sends unemployment rocketing.

Once rates do fall to 1%, of course, the Monetary Policy Committee will have run out of ammo. That's when things like printing money, or quantitative easing to give it its euphemistic name, come on to the agenda - and sterling (now back up to 1.10) looks vulnerable again. But for those with 25% equity in their house, there are plenty of good deals to be had - yet my hunch is that those in this category will be likely Tory voters. But there is no denying it: for those with job security, a bit]]> Fraser Nelson 2009-01-07T13:25:57+00:00 http://www.spectator.co.uk/business/trading-floor/3211786/in-favour-of-arts-spending.thtml

Michael Kaiser makes some good arguments in favor of increased arts funding, but unfortunately he mixes them up with bad ones, and he glosses over the best ones. The result is that Tyler Cowen gets to take the moral high ground by saying that "culture for the rich" is "not a priority".

In reality, however, arts funding is a great way of spending any stimulus money, as anybody with a pocket calculator to hand might be able to work out from a couple of the numbers in Kaiser's piece:

The arts in the United States provide 5.7 million jobs and account for $166 billion in economic activity annually.

I'm not sure what the source of these numbers is, but they work out at an all-in cost of less than $30,000 per worker. Compare that to the kind of infrastructure projects that are going to be funded generously in the stimulus plan, and you'll see that there's pretty much no area of the economy with higher jobs per dollar than the arts.

Kaiser even has a fiscally cost-free way of increasing arts spending, which seems like a no-brainer to me: "we need legislation that]]> 2009-01-07T00:02:03+00:00 http://www.spectator.co.uk/business/trading-floor/3210041/the-equalities-bill.thtml Lordy, more annoucements on yet another layer of bureaucracy to weigh down companies during the recession:

The government's equalities office is drawing up an amendment to the equality bill that would force companies to publish figures in annual accounts showing the number of men and women in particular pay bands. The bill is due to be published early this year.

More than just more bureaucracy: it's actually meaningless. Without knowing what jobs the various different people are doing we can't tell whether this means equal pay or not. For we do indeed have a certain amount of gender segregation in the UK workforce, something very different from the "discrimination" that is being talked about.

But my interest is really piqued by this double lie.

Men are paid 17.1% more than women for full-time work, according to government figures published in November. In part-time wages, the gender gap is 36.6%, according to the Office of National Statistics.

No, for two reasons. The first is that second number is reached by comparing full time male pay to part time female. Men working part time earn less per hopur than men working full time., Women working part]]> 2009-01-06T13:43:46+00:00 http://www.spectator.co.uk/business/trading-floor/3210016/public-broadband-infrastructure.thtml There's a piece at CiF which I think rather fails in its major premise.
At the dawn of the digital era, during this first decade of the 21st century, the most important new commodity is internet access. A growing canon of research has documented the enormous benefits that accrue to those with broadband access (and the increasing detriments faced by those without it). Within many civil societies, in much the same way the agrarian revolution helped eliminate famine, the industrial revolution brought manufactured goods into everyone's lives and the computer era integrated machines (from laptops to PDAs and cell phones to iPods) into our daily regimes, connectivity is the currency of the information age. A new social contract that includes connectivity for all is not a particularly expensive endeavour – free broadband for everyone for life would cost a tiny fraction of the cost of the Wall Street bail-out and far less than the expense of one year of our war in Iraq.
It's certainly true that broadband access provides benefits to those who have it. But that's not one of the traditional arguments for public action.

The first is the public goods argument. That there]]> 2009-01-06T13:30:05+00:00 http://www.spectator.co.uk/business/trading-floor/3208206/daily-brief.thtml When securities regulators head to the Hill later today for a hearing before the House Financial Services Committee, the questions about who knew what about Bernie Madoff's operations when will surely be fired off with a dash of vitriol.

But one regulator won't be forced to answer those questions just yet: Mary Schapiro, Barack Obama's pick for new S.E.C. chairman. Rest assured, her time will come.

Schapiro runs Finra, the brokerage industry's self-regulatory organization. Since Bernard L. Madoff Securities was a registered broker-dealer, Finra was at least partially responsible for policing its operations.

According to a story in the Wall Street Journal today, regulators including the S.E.C. and Finra examined Madoff's firm no less than eight times during the past sixteen years, and they found only minor violations. Indeed, in 2007, Finra's full-scale investigation of Madoff's firm concluded that "it violated technical rules and failed to report certain transactions in a timely way," according to the Journal.

This revelation will almost certainly cast Schapiro's nomination as S.E.C. chair in serious doubt. It is understandable that Congress should skewer the outgoing leaders of an S.E.C. that failed time and again to uncover this massive fraud. It is almost unfathomable]]> 2009-01-05T18:07:35+00:00 http://www.spectator.co.uk/business/trading-floor/3208196/broken-glass.thtml Is Waterford Wedgwood luxury, or "masstige"? Either way, it's bust. Its $625 million in debt is essentially worthless, it's been losing money before interest payments for a couple of years now, and its prospects, as we enter another grim year for the retail market, have never been poorer.

My guess is that someone, somewhere, will pick up the iconic brands -- Waterford, Wedgwood, Rosenthal, Royal Doulton -- for a song, while laying off substantially all of the manufacturing capacity and laying plans to start over from scratch if and when the market in such things improves. While the receivers are looking to sell the business as a going concern, I can't imagine that anybody has much appetite right now to buy a money pit with little prospect of turning profitable in the foreseeable future.

Ireland will probably end up losing a national icon -- and it won't be the last big brand to fall prey to the current economic crisis. During boom years, investors love storied brands like Waterford and Wedgwood. In bad times, they start to concentrate more on the P&L. These days, if all you've got going for you is a long history and a high]]> 2009-01-05T18:05:03+00:00 http://www.spectator.co.uk/business/trading-floor/3207416/most-odd.thtml Business owners are losing confidence in the ability of Lord Mandelson's Business Department to help them through the recession.

In order to lose confidence don't you have to have confidence in the first place?

Are there actually any rational business owners who have confidence in the Business Department to do anything other than hinder their efforts?