The Bear’s Lair

The Bear’s Lair: Public charge principle could usefully operate globally

The Trump administration last week announced a substantial tightening of the “public charge” rules by which immigrants drawing welfare would be ineligible for permanent resident “green card” status. As Milton Friedman said: “It is just obvious you can’t have free immigration and a welfare state,” so this is good policy. However, it made me wonder: […]

The Bear’s Lair: Global Gosplans should be shut down

Kristalina Georgieva’s nomination as Managing Director of the International Monetary Fund is entirely appropriate. She is a Bulgarian communist by background, for 14 years until 1993 a Professor at the Karl Marx Higher Institute of Economics under that country’s communist government. The IMF itself and its sister institution the World Bank have since their foundation […]

The Bear’s Lair: The global tax regime becomes ancien

Modern “big data” systems are allowing tax authorities to gain full knowledge of sales transactions in their jurisdiction, thus pushing VAT tax collection rates close to 100% on small businessmen and the middle class in general. Meanwhile, Western income tax systems collect steadily less tax from large corporations and the very rich, who use loopholes […]

The Bear’s Lair: The impoverished 22nd Century

With the 21st Century almost a fifth over, the outlook for the 22nd is beginning to become clearer. The range of uncertainty is still very high, but based on current political, technological and demographic realities, we can start to make some predictions. Whereas at the turn of the 21st Century those predictions would have been […]

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 […]

The Bear’s Lair: Stinking city on a garbage dump

Harvard University last week rescinded its acceptance of Parkland-shooting survivor Kyle Kashuv on the grounds of offensive tweets made when he was 16. This resulted in considerable media criticism that, in imposing political correctness codes and denying free speech, Harvard was betraying its beliefs. But that is nonsense. Harvard was founded in the Massachusetts Bay […]

The Bear’s Lair: Cryptocurrencies and the South Sea Company

Cryptocurrencies have not taken over as the new Gold Standard, but nor have they disappeared, and they have been showing something of a revival in the last few months. We are thus in a similar position to the investors of 1720, inspecting the new phenomenon of a publicly traded company whose shares take off. Like […]