This is a big week. A very big week. A several-billion-dollar week, in fact, if you happen to be a Wall Street banker.
Yes, it's the time of year when US banks reveal how much they've stuffed into their bonus pools and – by extension – how robust their employees' trademark braces must be as we realise how much they trousered.
In the first nine months of 2013, the big US banks set aside about £40bn to top up their staffers' meagre stipends. Analysts reckon Morgan Stanley and Goldman Sachs will pour in another £4bn when they report results this week – meaning little work will be done as bankers focus on pretending they got more than they actually did.
This hilarious spectacle is made more silly as the original (laudable) concept of exceptional payments for exceptional performance was abandoned long ago. It was replaced with the oxymoronic "guaranteed bonus", before the banks came up with the concept of "clawback" – designed to dissuade non-bankers from getting too cross about the huge rewards still on offer to the geniuses behind the credit crunch. Sadly, despite all these innovations, we have yet to see the flipside of the bonus – the "lowness" – whereby if you lose the bank money, your salary gets docked. Maybe that will get an airing again this week. It would concentrate a few minds.
You couldn't make it up
Sometimes the real-life comedy unfolding inside the Square Mile is so good that it makes gags devised by City wags look rather second-rate.
Take last year's rib-tickler about Dame Clara Furse, a non-executive director of Fortis when the Belgian bank – in partnership with Royal Bank of Scotland – made the disastrous top-of-the-market purchase of ABN Amro in 2008. The punchline was delivered when Furse became a member of the Bank of England's financial policy committee: the body charged with, er, ensuring the UK's financial stability. Even Armando Iannucci might struggle to write satire like that.
Anyway, Furse's nomination hardly attracted the full backing of the Treasury select committee, which under the chairmanship of Andrew Tyrie has adopted the novel approach of experimenting with competence.
Furse, a former boss of the London Stock Exchange, has another chance to impress that tough audience this week, when she appears alongside governor Mark Carney, his deputy Sir Jon Cunliffe and fellow FPC member Richard Sharp. She's likely to be questioned on whether there might be a housing bubble. That's possibly not a laughing matter.
Let the spread-better beware
You may have noticed that the financial spread-betting industry is very keen on advertising its services, particularly if it can present itself as an alternative (tax-free) method of investing. But there is one important fact that never quite seems to make it into the sector's commercials – that only 20% of its customers consistently make a profit. As methods of investing go, it is right up there with some of the City's greatest gems.
Of course a heavy ad spend is needed to attract new players if this hit rate is to be maintained, as the 80% quickly tire of funding the pros. This constant and costly necessity also means that only the biggest companies seem to flourish – but flourish they do.
We will be reminded of that this week when IG Group, the granddaddy of spread betting, announces its half-year results. The group's shares have added 34% over the past year, and doubled since the start of the credit crunch, but still Investec reckons there's plenty of room for more gains. It expects it to "deliver customer, top-line, earnings and dividend growth via a mix of market share gains and emerging markets expansion".
It's a remarkable story – albeit one that suggests savvy investors should buy IG shares, not its products. Don't expect that tagline on its ads, though.
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