Tito's Blog

Random thoughts on entrepreneurship,
venture capital, private equity,
world finance and global economy

Archive

About

Get Updates

 Subscribe to RSS feed

Favorites
Slice of MIT, ZeroHedge, Baseline Scenario, Tito's News

Hello! You should follow me on twitter to keep in touch!

Dec
22nd
Wed
permalink
 
The eurozone needs more than fiscal discipline from Germany The German government surely does intend to do what is needed to keep the eurozone together. But the eurozone it has in mind will be desperately uncomfortable for many members. This is largely because the failings of the eurozone have not been fiscal irresponsibility, but macroeconomic divergence, financial irresponsibility, asset price bubbles, and huge shifts in competitiveness.

The eurozone needs more than fiscal discipline from Germany

The German government surely does intend to do what is needed to keep the eurozone together. But the eurozone it has in mind will be desperately uncomfortable for many members. This is largely because the failings of the eurozone have not been fiscal irresponsibility, but macroeconomic divergence, financial irresponsibility, asset price bubbles, and huge shifts in competitiveness.
Tags: ft   europe   euro   germany   spain   greece   ireland   economics   martin wolf  
1 note   Comments (View)
Oct
26th
Tue
permalink
 
FT.com / Currencies - The currency wars explained
Tags: economics   currency wars   FT   trade balance   foreign reserves  
Comments (View)
Jul
8th
Thu
permalink
 

Economist and FT on Private Deleverage vs Public Borrowing

Martin Wolf explains why extra government borrowing will be met by increased private (mostly corporate) savings, à-la Japanese lost decade. In general it makes a lot of sense, even though it makes two strong assumptions:

  1. the somewhat paradoxical net flow of capital from developing to mature countries via reserve accumulation and currency manipulation will continue indefinitely
  2. dollars and pounds will still be considered a safe heaven

On private corporation deleverage, The Economist has a good article on this week print edition (“Show us the money”) on increased cash generation by US and UK companies, due to lower investments.

Tags: finance   economics   government debt   US   UK   japan   savings   investment   deflation   deleverage   FT   economist   martin wolf  
Comments (View)
Apr
21st
Wed
permalink
 
The combination of state insurance (which protects creditors) with limited liability (which protects shareholders) creates a financial doomsday machine. What happens is best thought of as “rational carelessness”. Its most dangerous effect comes via the extremes of the credit cycle. Most perilous of all is the compulsion upon the authorities to blow another set of credit bubbles, to forestall the devastating impact of the implosion of the last ones. In the end, what happens to finance is not what matters most but what finance does to the wider economy.
— FT.com / Columnists / Martin Wolf - The challenge of halting the financial doomsday machine
Tags: finance   FT   economics  
Comments (View)