Tags: ,

Some Musings on Brexit’s Impact

The Brexit vote has surprised the UK establishment, who are not quite sure how to respond, but are responding. The twin tasks of Theresa May’s new government are both to deliver a UK exit from the EU, and to address the disillusionment expressed by a large portion of the electorate with the establishment.

The rest of this blog can now be found via this link on the New Sparta Asset Management website. The site also includes content and articles from other prominent Emerging Market economists, along with research and recent developments from the company’s current sectoral  interests.

Tags: , ,

Reassessing Groupthink post-Brexit

What has been quite remarkable is not the result of the Brexit vote, so much as the almost uniformly-held view amongst the UK’s urban elite and financial markets that Leave would fail to win. Brexit was always seen from the polls as a very close thing.  It should therefore not have come as such a complete shock. The denial and indignation, treating it as some great surprise, is the interesting phenomenon.

The rest of this blog can now be found via this link on the New Sparta Asset Management website. The site also includes content and articles from other prominent Emerging Market economists, along with research and recent developments from the company’s current sectoral  interests.

 

Tags: , ,

Britain’s Wake Up Call for the EU

I am pleased that my country has chosen to say halt to undemocratic and dysfunctional governance, even as I am aware that there are major challenges for Britain ahead.  I do believe Westminster can do better than Brussels for the simple reason that our government and MPs are more likely to be kept in check by the electorate.  Democracy is often frustrating for policy-making.  It is messy and very hard work.  It is very easy to slip into a preference for technocratic solutions.  But democracy prevents extremes, be it famines as the Nobel economist Amartya Sen discovered (famines are best understood as resulting from highly concentrated entitlements, quickly brought to the attention of democratic representatives if there be any) or inability to engineer major policy U-turns when needed – in a democracy failed policies go out with failed politicians where autocrats stubbornly persist.

The rest of this blog can now be found via this link on the New Sparta Asset Management website. The site also includes content and articles from other prominent Emerging Market economists, along with research and recent developments from the company’s current sectoral  interests.

Tags: ,

Incentives Have Shaped Finance Theory

How much of finance theory has evolved in order to cater to principal agent realities?

Fat in one’s diet is now back in vogue, with simple carbohydrates like sugars replacing it at the top of the list of what to eat less of. Diet is clearly subject to fads but the science telling us of the relative virtues of fat versus carbs is not new. What happened?  Why was the public not told earlier?

The rest of this blog can now be found via this link on the New Sparta Asset Management website. The site also includes content and articles from other prominent Emerging Market economists, along with research and recent developments from the company’s current sectoral  interests.

Tags: ,

No Lessons to Draw from Argentina’s Exceptional Debt Settlement

Elliott Management reportedly (Financial Times, 8th May 2016) received a payment from Argentina of about $2.4b billion a few weeks ago after the new government of President Macri agreed a settlement deal with Elliott and other ‘hold-out’ investors.  This is the legacy of Argentina’s sovereign default back in December 2001, and the fact that not all bond-holders agreed the subsequent exchange offerings.  Indeed, the offerings were widely considered inadequate at the time and although local institutional investors had little choice but to accept the new terms, a substantial number of foreign investors did not agree to them, including a lot of very angry European retail investors.

The rest of this blog can now be found via this link on the New Sparta Asset Management website. The site also includes content and articles from other prominent Emerging Market economists, along with research and recent developments from the company’s current sectoral  interests.

Tags: , ,

Something May Happen

Are we going to go round again with US interest rate expectations, the dollar and ever more investment concentration in the developed world, and especially into low yielding bonds and cash?  And will this again be at the expense of emerging markets and more rational and risk-balanced allocations?  Or might the herd find itself trapped and finally veer off in a new direction, or even panic?  Perhaps something entirely unexpected may happen?

The rest of this blog can now be found via this link on the New Sparta Asset Management website. The site also includes content and articles from other prominent Emerging Market economists, along with research and recent developments from the company’s current sectoral  interests.

Tags: , ,