It's a mystery.
How is Twitter worth $40bn ?
The microblogging site floated in November at $26 (£16) a share, or $17bn. The price seemed silly for a company that has never made a profit and is on course for revenues of only $600m this year. Yet the share price is now close to $70. Twitter is plainly a social phenomenon but has yet to show it can take a meaningful chunk of online advertising without infuriating users. The valuation of 60-times revenues is otherworldly; it may also be evidence that heavy doses of quantitative easing have messed up traditional investment radars.
Why was the co-op Bank farce allowed to run for so long ?
The Rev Paul Flowers, dubbed the "Crystal Methodist" after allegations of drug use, generated the bulk of the headlines. The mystery, however, is why regulators allowed a severely under-capitalised and under-managed Co-op Bank to try to buy 630 branches from Lloyds. The expedition was finally abandoned in April and a £1.5bn capital hole revealed soon afterwards. We are still awaiting a full explanation of why regulators didn't intervene earlier.
How did Help to Buy, mark two, ever get off the ground ?
Arguably, the first version of the chancellor's housing scheme, confined to creditworthy first-time buyers, was semi-respectable. The second version, however, involves the state writing first-loss insurance on house purchases worth up to £600,000. Why? House prices are rising again – at an annual rate of 10% in London – and affordability is already stretched if historical price-to-earnings ratios are a guide. Meanwhile, the emergency Funding for Lending scheme for banks is being axed for mortgages. George Osborne is making it harder for the Bank of England to prevent a housing bubble.
Why isn't the growth of zero-hours contracts an electric issue ?
Flexibility in the labour force is an asset and some workers are clearly content with contracts that offer no guarantee of regular work. But, when 1 million people may be employed this way, a large swath of the UK workforce has been quietly casualised. In some cases, workers may be exploited by being denied holiday and sickness pay. The effect on productivity could be long-lasting. The lack of intensity in the political debate is mystifying.
How do investment banks continue to charge so much ?
The question could be asked most years, but 2013 brought two startling examples. Barclays shelled out a colossal £130m in fees to other banks who took little real risk in underwriting a deeply discounted £6bn rights issue. And Severn Trent managed to clock up £19m in "advisory, legal and other services" in a single month in resisting a takeover approach that never became a formal bid. For comparison, it cost £4.8m to run the water company's board, comprising five executives and six non-executive directors, for a full year.
Is the eurozone crisis really over ?
The Cyprus banks crisis was handled crassly at the start of the year. Since then, the wider eurozone crisis has seemed becalmed, despite the continued economic funk in euroland. Greece is still the country to watch. Deflation could quickly undermine the ambition of reducing public debt (now 170% of GDP) if nominal GDP grows only slowly. In that case, a third bailout, and write-offs of loans, may be required. That messy debate could again be alive this time next year.
Does GlaxoSmithKline have a future in China ?
Back in July, when allegations of bribery and corruption were made against GSK's Chinese unit, a fine and a rapid restructuring of working practices seemed a likely outcome. Five months on, investigations continue, dozens of local employees remain in detention and chief executive Sir Andrew Witty has not been able to draw a line. He says there is "no question" about GSK's commitment to China. But the question of how the commitment is meant to be achieved is unresolved.
Can Ed Miliband's proposed freeze on energy bills be made credible ?
The idea to cap fuel bills for 20 months is popular; it even prompted the government to make a minor tweak of green levies. But does a price freeze, regardless of what happens to the wholesale price of energy, stand any chance of working in practice? How would Labour oblige energy firms to invest in new infrastructure? Would firms really be allowed to set their own tariffs in the 21st month? The answer is supposed to be "yes" because the energy market would have been "re-set" in a fair and transparent way. That is ambitious, to put it mildly. The plan needs much more detail.
Is it safe to taper ?
This is the big one for global markets. The US Federal Reserve has started to ease back on quantitative easing, even if the change of gears is hardly crunching – there will be a $10bn monthly reduction to $75bn. But the expectation of a full and gradual wind-down of asset purchases has been created. If the US recovery proves too weak to allow a full taper, the Fed is in trouble.
How does Jamie Dimon survive at JP Morgan ?
The US bank paid a record $13bn to settle with the US justice department for mis-selling mortgage securities. There were also fines of $920m relating to the "London Whale" incident, which Dimon initially dismissed as a "tempest in a teapot" but which led to a $6bn loss. he Financial Conduct Authority saying it was "deliberately misled" by London-based executives on one occasion. Dimon, though, remains as chairman and chief executive of JP Morgan. Shareholders and regulators, bizarrely, continue to approve the concentration of power.
Does Labour really believe in HS2 ?
The proposed high-speed rail line had a bad year. The cost is now put at £50bn shadow chancellor Ed Balls said there should be "no blank cheque." If that is the prelude to a Labour retreat, HS2 must be heading for the sidings.
How did Dame Clara Furse get on to the financial policy committee ?
Furse had a long and honourable innings as chief executive of the London Stock Exchange but this appointment was extraordinary as she was also an established non-executive director of Fortis when that financial institution had to be rescued by the Belgian government in 2008.
Why is the government still in denial about Royal Mail ?
A 60% stake was sold at 330p in October. Now shares in the postal service trade at 580p. Spare us pleas about "froth" in the after-market and the need to attract long-term investors. Royal Mail's potential as a big dividend-payer was undersold and the shares were underpriced.
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