BEST OF LEX / THE FINANCIAL TIMES LEX ( RECOMMENDED READING )

Best of Lex


When the spotlights are turned on, some seek to avoid their glare while others rush to embrace their warmth. Bankers, who have been sweating under the bulb’s intense heat for months, struggled to escape this week. Goldman Sachs halved its bonus pool as its fourth quarter profits soared to $4.95bn. Citigroup and Morgan Stanley seemed determined to put 2009 behind them and focus on 2010, which could be a make-or-break year for both. But President Obama, who suffered a setback to his ambitious healthcare plans by losing a seat in Massachusetts and the Senate super-majority (to the relief of many insurance executives), was determined to pursue bankers into the shadows. He followed plans for a levy on banks’ balance sheets with a proposal to limit the size of their proprietary trading operations.

Meanwhile Chinese politicians were basking in the limelight of presiding over the only large economy in the world showing double-digit GDP growth. But unless they quickly tighten their monetary policy, they are in danger of overheating the economy and inflation could soar. Elsewhere, investor confidence was boosted as Chile shifted slightly to the right with the election of President Sebastián Piñera, while the Ukraine sought to end the political infighting that led it into an economic morass under the rule of Viktor Yushchenko.

In the corporate world, Kraft took centre-stage with an £11.6bn acquisition of Cadbury that left Hershey standing in the wings. Warren Buffett, head of Kraft’s largest investor Berkshire Hathaway, was not too distracted by his company’s stock split and possible inclusion in the S&P500 to warn that Kraft may have overpaid. Tune in next week for more Machiavellian maneuverings.

John Casey, Lex publisher
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