In this guest post, law professors Mark Weidemaier & Mitu Gulati evaluate the risk that euro area sovereign debt could be redenominated into new local currencies. The places to worry about are France and Italy, not Greece. Our work centers around questions related to sovereign debt, and lately we have heard from a number of industry friends who wanted to talk about redenomination risk for Euro area sovereigns.
Carney’s comments on climate change inspired a private sector task force to make recommendations on how companies should disclose climate risk and have finally been decided upon. Kate Mackenzie, a climate finance think tanker, explains why they could be a game changer.
Milan Vaishnav — senior associate at the Carnegie Endowment for International Peace and author of the forthcoming book, When Crime Pays: Money and Muscle in Indian Politics — explains why India needs to do something about the black money problem running right through the political system of the world’s largest democracy.
Traditionally, higher prices tend to be followed by increased investment: management tend to be very reactive in their planning. Given that many companies have cut back budgets by over a third in the past two years, management are likely to find it hard to resist the urge to make up for lost time and pour more money into the ground.
The US equity market is about to start a two-year programme testing changes for small-cap equity trading. This guest post from Richard Johnson, a market-structure and technology strategist with Greenwich Associates, argues that the costs of the programme may outweigh the benefits. _____
This is a guest post by Prof. Dr. Luc Soete, a UNU-Merit board member, on the challenges posed to labour markets by growing automation and the need to distribute the gains from modern technical change with tools such as basic income or helicopter money. It is based on remarks made at a panel event marking the 50th Anniversary of the Science Policy Research Unit at Sussex University earlier this week.
It’s almost five months since 11m private documents leaked out of a Panamanian law firm, Mossack Fonseca. This guest post from Howard Bilton, chairman of off-shore advisory specialist The Sovereign Group, looks at the broader state of play for those looking to minimise their tax bills.
According to official Chinese data, output in the second quarter in the industrial sector grew 6 per cent in real terms and 2.9 per cent in nominal terms. Given the officially reported 2.6 per cent producer price deflation that appears to basically reconcile. However, if we do dig beneath the surface Christopher Balding, professor at Peking University, HSBC Business School, argues large discrepancies appear.
This guest post is by Arturo Porzecanski, a professor of international economic relations at American University (Washington DC), whose research and writings focus on creditor rights. He does not professionally represent in any way the creditors mentioned in the article. His opinions are his own and not those of the Alphaville team. Iceland’s latest attempt to phase out its capital controls will soon entail what deserves to be characterized as a punitive, selective default on its obligations to the country’s foreign creditors.
In this guest post, Toby Nangle, the Global Co-Head of Multi Asset & Head of Asset Allocation, EMEA at Columbia Threadneedle, wonders whether rising wages caused by changes in demography could ultimately end the productivity slump. Weak productivity growth has puzzled economists and policymakers but it doesn’t seem to have hurt investors: the period 2009-2016 might even be called “the Goldilocks Slump”. Ample slack in job markets ensured little bargaining power for workers, whilst central banks battled deflationary impulses with a combination of low (or negative) rates and asset purchases. The net effect has been falling real yields and tight risk premiums. But productivity growth does matter. And we are nearing the point where its absence will be of overwhelming importance to financial market investors.
This post is from Gerard MacDonell, an economist at Point72 Asset Management, formerly SAC, from 2004 through 2015… _____ With the risk of recession and a return to the zero bound now prominent, there is renewed discussion of the Fed and Treasury coordinating to deliver a helicopter dropof money. This would not work in the US because the inflationary implications of it would be too dire and because the Fed would predictably renege on its side of the bargain. Here’s why, as I see it.
From Kate Mackenzie, former Alphavillain and current climate-finance think-tanker ______________ Warren Buffett’s annual letter last week badly lets down any reader hoping to understand the implications of climate change for the general insurance and reinsurance sector. If Buffett had said climate change impacts are not a problem for ‘his’ insurance companies, because his managers are managing the risks thusly, that would be fine. It’d also be a fascinating read, if it went into some detail — unlikely though, because that would reveal competitive information. Unfortunately he chose to apply it to all of the insurance sector:
This is a guest post by Timothy R. Ferguson founder and president of The Institute for Anacyclosis, a non-profit advancing the study of Polybius’s cyclical theory of political evolution. According to the original version of Polybius’s theory of Anacyclosis, society begins as tribal monarchy, develops into royal monarchy, then degenerates into tyranny. This in turn is overthrown by aristocracy, gets corrupted by oligarchy, and is later succeeded by democracy, which itself is perverted into ochlocracy (mob-rule) — finally opening the door (once again) to the chaos that makes autocratic rule palatable, thereby restarting the cycle. The base cycle being referenced over and over again is thus one-few-many. While political evolution does not rigidly conform to any fixed sequence, a sufficient duration of time seems to average out the occurrences of chance. For example, England in the beginning was ruled by kings, then by an aristocracy, which quickly became oligarchic. Now it fancies itself democratic, even if in truth it has become rather more plutocratic.