May 2010
42 posts
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“What we are currently experiencing is a crisis of public finances in advanced...”
– ECB: Challenges for the Euro Area, and the World Economy via ZeroHedge
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“In Japan and Western Europe, where the birthrate is way below the replacement...”
– John Taylor On The Dollar, Growth And Immigration
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Top 1000 sites - DoubleClick Ad Planner →
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“Then Gen Y grew up and their culture and needs changed. My senior students...”
– Facebook’s Culture Problem May Be Fatal - The Conversation - Harvard Business Review
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The Math Of An LBO
When I read about 5 or 6 large buy-out funds bidding on a mature company in a mature market at 10x EBITDA valuations, I wonder where real value creation may come from.
In addition, the financial sponsor will have to add management layers that were probably unnecessary before and will have no access to synergies that an industrial player enjoys.
Truth is that the math of a traditional leveraged...
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“WAGES IN THE PERIPHERY NEED TO FALL 20-30 PERCENT RELATIVE TO GERMANY.”
– Et Tu, Wolfgang? - Paul Krugman Blog - NYTimes.com
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WatchMarc Andreessen talk on entrepreneurship and venture capital at Stanford
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Ezra Klein - Galbraith: The danger posed by the... →
For bond bulls: private and public financial balance and why it is easy to finance government debt.
I think that it is true for countries running a trade surplus like Japan or Germany and can therefore finance it internally, and not for countries running a current deficit, like US or Greece, that need foreigners to keep buying new debt or rolling over existing debt.
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PIMCO - Secular Outlook May 2010 El-Erian →
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“When you are going through hell, keep going.”
– Winston Churchill
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“The essence, or the genius of banking, not just now, the last century or the...”
– If you want to know what banking (and shadow banking) is you should read this piece by PIMCO’s McCulley
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The Global Crisis of Legitimacy | STRATFOR →
Must read.
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Did You Say Million Or Billion?
When a misspelling causes havoc, it’s time to take a step back.
Federal officials fielded rumors that the culprit was a single stock, a single institution or execution system, a $16 billion trade that should have been $16 million. But they did not know the truth.
Update: an intro to High-Frequency Trading.
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“S&P just this past week downgraded Spain “one notch” to AA from AA+,...”
– PIMCO - Lovin’ Spoonful - May 2010 IO
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“Should the deal fail, Greece “might do a kind of dual currency in which they use...”
– Goodhart Says Greek Deal May Collapse as Crisis Tests Euro - Bloomberg.com
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Greece $400 Billion vs Lehman $600 Billion
To put things in perspective, Lehman Brothers had $600 billion in assets (and higher liabilities).
Greece has a gross public debt of $400 billion.
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“As I have argued before, three things are required if the eurozone is to survive...”
– FT.com / Columnists / Wolfgang Munchau - Europe’s choice is to integrate or disintegrate
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Some Optimism On Italy's Debt
After reading Citigroup Global Market Report “Sovereign Debt Problems in Advanced Industrial countries” and the BIS working paper “The future of public debt: prospects and implications (pdf)”, I feel a little better about Italy, mostly because we have a primary (i.e. before interests) budget surplus, we didn’t overspend in stimulus programs and age-related government...
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Citigroup's Willem Buiter Joins The Doomsday Crew
Willem Buiter Issues His Most Dire Prediction Yet: Sees “Unprecedented” Fiscal Crises, US Debt Inflation And Fed Monetization | zero hedge
Buiter 4.26
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“[The Chinese] refuse to allow the yuan to strengthen because they know that once...”
– Michael Krieger - This Is The Last Dance