31 December 2007

Top Financial Stories, 2007

This is my first new year's eve blogging at blogspot. I generally ask myself at this time what were the biggest stories of the past year, in business/financial news.

By "stories," I don't mean themes, such as "China rising" or "subprime mortgage troubles." I mean stories, such as one might have seen in a particular newspaper on some specific day. Two of the stories on my list involve the year's subprime mortgage crisis, so I'm not slighting its importance.

Of course, I choose the ones I do largely because they illustrate an important theme. But the theme itself isn't the story.

Further, I don't rank them, as in a top ten list. I'll simply give one "top" story from each of the twelve months of the year now ending. All that understood, here we go.

January: The Islamic Development Bank sets up structured finance unit in Saudi Arabia. The question of recycling petrodollars, and the development of a distinctive style of "Islamic finance" to do so, have been important themes for several years. This is a very good headline to hang that one on.

Feb. Fortress Investment's initial public offering. Fortress has been a very large and influential private equity operation. When it went public it (ironically?) drew a lot of attention to the private equity world it was exiting.

March. Government officials in Hanoi proposed new measures designed to attract more foreign investment capital into Vietnam. The symbolism needs no further comment from me.

April. SEC backs away from a plan to subpoena reporters about an alleged short-sellers' conspiracy.

May. A bidding war breaks out over control over the Chicago Board of Trade, one of the world's premier futures exchanges. The auction isn't resolved until July. The Chicago Mercantile Exchange ended up buying the CBOT, uniting the two venerable windy city institutions.

June. A dispute breaks out over how to document mortgage derivatives. To alert minds, this indicated that trouble was brewing in that area.

July. Cerberus Capital buys Chrysler from Daimler.

August. An appellate court rules against an intellectual property claim by the New York Mercantile Exchange.

September. The California Supreme Court throws out Gradient's motion to dismiss in a short-sellers' conspiracy case. Click on "Gradient" below to learn more.)

October. The year's inconclusive debate over the taxation of carried interest briefly occupies the Presidential candidates.

November. HSBC puts structured investment vehicles on its balance sheet -- may be turning point on subprime credit crunch, indicating that the problems that had obsessed so many in the summer and into the fall have a limit.

December. OPEC announces it will maintain existing levels of production. The announcement is generaly seen as heralding more price increases, as world demand increases are certain.

The AP has listed 10. There's is a more traditional theme-heavy sort of list. I'll reproduce it here.

1 housing contagion
2 record oil prices
3 toy recall
4 Fed moves
5 Dow 14000
6 dollar's fall
7 China and India roar
8 ethanol boom
9 bank ceo departures
10 United Auto Workers health care deals.

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