AVENGING THE DEFICIT?

The UK this week sees the premier of Captain America: The First Avenger.

The good Captain was the original 9 pound weakling Steve Rogers, rejected by the army but given a second chance through the use of a super-serum that German scientist Abraham Erskine developed.

Erskine was killed just after Rogers' transformation by Gestapo agent Heinz Kruger. 

As the debt ceiling deadlock continues with politicians point-scoring and blaming each other as the deadline-day for default looms near, I wonder what would have happened back in 1940 with today's politicians?

Surely the Republicans would have appreciated getting someone out of 4F and into the US Army but would have baulked at the costs, complaining that this action can only happen if cuts were made elsewhere?

Meanwhile, the Democrats, although worried about the ever-increasing debt would have complained that the Republicans were playing petty-politics and that action was needed now to deal with the issue of a lack of super-soldiers. Any vote in favour of the Republicans would not deal with the threat in an instance but create problems six months down the line.

Of course, as events occured   in the story, the Democrats would have won but with the killing of the creator of the Super Serum, the Republicans would go into the next elections complaining that despite the Democrats spending all that money, the country was only left with one super-soldier so how could President Roosevelt justify the costs.

The Tea Party would have questioned how a German scientist got a job ahead of a good old American boy and how the lack of immigration controls and decent security checks allowed the assassin to get into the lab in the first place.


Editor's note: Erskine was originally called Reinstein, why it was changed, I don't know

CRIME DOESN'T PAY

If caught you get fined quite a lot.

Brokers Willis have been fined £6.89m for failures in its anti-bribery and corruption systems and controls which is, to date, the Financial Services Authority's largest fine imposed for this breach.

Coincidentally, the next issue of Financial Risks Today looks at criminal risks in fraud and bribery and what is noticeable about the Willis case is that its failings were exactly like those described by lawyers and consultants we talked to for the article.

In a global world there is an ever-increasing need for due-diligence and to make sure that senior management are informed of all possible risks.

Willis has taken steps to overcome its failures but how much more money could it cost another financial firm before all companies follow good practices and, as far as possible, mitigate the risks from criminal behaviour?

A sigh of relief?

So will the markets breath a sigh of relief on Monday?
It says something that if only eight banks out of 20 failed the 5% benchmark that this should be treated as good news. But, there are still 15 that are in the danger zone and that is with the frantic capitalisation that went on in the first quarter of this year.
We will see on Monday which banks find favour with the markets and despite this breather, I am sure the ratings agencies may take a different view.

BANKING ON A STORM

In around an hour and a half's time, we will see how stable European banks really are with the publication of their stress tests.

It has been kite-flighted that around 10 banks will fail but analysts will probably play spot the debtee with the banks having to disclose their exposures to debt.

It is no wonder that the result are coming out after the UK and European markets have closed because there could be some vicious figures floating around out there.

THE PRESSING ISSUE

Yes the scandal at the now defunct News of the World is important and the cross-party moves against News Corp are impressive but surely there are more important issues that should be looked at the moment?

A quick glance at the BBC's website - still the information portal of choice for the general public - shows that BSkyB is still the top story while unemployment and IMF/Italy come in at second and third place.

At a time, where Euro-leaders are in a spate of indecision, doubts grow over the state of the UK recovery and worrying signs that China is slowing down, surely these are more important business issues than the behaviour of some hacks over at Wapping?

The risks to the global economy are in stark contrast to the risks to Murdoch's empire and there should be concern that the general public will not be fully informed if the crunch does happen, because if it does, it is not going to be pleasant.

Despite this, I will make one comment about the phone-tapping scandal - one of News International's main competitors which is loving the whole shebang is DMG, which published the Daily Mail, which was the biggest offender for phone tapping according to the research that the Information Commissioner did on the topic - go figure.

SLICE OF LEMON

In the next issue of Financial Risks Today, we will be looking at the issue of impact investment.

This is a fascinating area that appears to be growing where investors can match their social awareness with the chance to make money - primarily in emerging countries.

Whether it will last the distance or, like socially responsible investment, become just one of the many investment strategies out there remains to be seen.

However, as far as names are concerned, all credit must go to the area's angel network which thinks it is a good fit for the trade body - The Global Impact Investment Network.

It's name? Toniic

WELCOME ONBOARD

The rollercoaster that is the Eurozone looks set to pick up speed again as Moody's downgrades Portugal to 'junk' status.

Like some wheezing old carney ride on Coney Island, it drags itself up to the summit, only to risk diving once again into fears of default and contagion.

Now having one agency downgrade, is not in itself dangers - although the markets are positioning themselves accordingly this morning.

And Moody's said there was better political stability and will in Portugal than in Greece.

However, somewhere down the line those in control in the Eurozone really will have to ask what the payoff is between a political will to keep the Euro going and the financial costs that this is bringing on members?