Month: July 2019

The Bear’s Lair: What Liverpool could teach today’s Fed

Robert Banks Jenkinson, Lord Liverpool, said it best, in a House of Lords speech of May 26, 1818: “The tendency of an inconvertible paper money is to create fictitious wealth, bubbles, which by their bursting, produce inconvenience.” His phrase “fictitious wealth”, or better “fictitious capital” has a similar (but not, as I shall explain, identical) […]

The Bear’s Lair: Behemoths should give up merchant banking

“The mood’s always depressed in Deutsche” said one of that bank’s Singapore traders (not being laid off that day) to the FT. That reflects my experience at Citigroup and is contrast to my experience at the genuine merchant bank Hill Samuel where we were pretty cheerful. Surely now, a quarter century after the demise of […]

The Bear’s Lair: Corn Laws beat farm subsidies

British farmers are concerned about a “no-deal” Brexit, under which they would lose access to bounteous EU farm subsidies. U.S. farmers have had their subsidies increased by President Trump as a result of the China trade dispute. Agriculture subsidies burden national budgets and almost exclusively benefit large corporations and the very rich. There is a […]

The Bear’s Lair: Corporate debts are today’s worst assets

The silly-money policies of the last decade have left almost all assets overvalued. Real estate, public and private equity, especially in the tech sector, collectibles, debt in general and emerging markets are all well above sustainable levels. But if we are looking for a catalyst for the next market disaster, there is one outstanding candidate […]