New Research from the Financial Times shows that US investment bank Merrill Lynch, whose bankers are known as “The Thundering Herd” after the bank’s bull logo, is the biggest loser from the credit crunch.
Merrill’s losses in the past 18 months amount to about a quarter of the entire profits it has made in its 36 years as a public company.
In 2007 and 2008 it has so far lost $14bn amidst total writedowns and credit-related losses of a mind-blowing $52bn (which just goes to show how much money it makes from other activities, as it’s still here).
At the same time (observes our man in the City of London gloomily contemplating his first skinny latte of the day) the US economy actually grew by 3.3 per cent in the second quarter of 2008, indicating that America might avoid recession even as Europe and the UK tumble into one.
This is verging on cheek given that the credit crunch (banks refusing to lend to anyone at other than extortionate rates) was invented in the US, through injudicious mortgage lending to people without any money.
The US hero of the hour is Federal Reserve chairman Ben Bernanke who slashed interest rates as soon as he realized the impending disaster.
This is in stark contrast to the Bank of England, which is still sitting on its hands, and the European Central Bank which actually raised rates.
Oh dear.