The Dislocation of Risk and the Mispricing of Assets: The Koilogastor Market
What is a koilogastor market? One interpretation could be a market characterized by gluttony and voracity. Another could be a market whose womb is empty while declaring that a baby is forthcoming. For the purpose of this commentary a koilogastor market is a market...
The Economy and the Necropolis of Troy: On Mobs, the Arab Spring, and QEs
The events that shaped last week – and potentially the weeks and months, if not years to come - had both geoeconomics and geopolitical dimensions. In situations like these, the beneficiaries could be viewed as those who shape the path towards the ultimate outcome....
The ECB Chants In Paradisum: Seeking Safe Collateral in the Midst of Delusion
Last Thursday, Mario Draghi the President of the ECB indicated willingness to start again his “asset purchases program”, baptized this time with the title of OMT (outright monetary transactions) a.k.a. issuing electronic money/credits to purchase the paper of troubled...
The Great Bailout of Germany
It has been almost three years now since the rumors started that something was rotten with the Greek public finances. Excesses have been documented. Wasteful expenditures, inefficiencies, and corrupt practices have also been documented and dominated the news. There is...
On Risk Premiums, Earnings Growth Potential, and Monetization Routes: Diminishing Returns and the Liquidity Tree
Over the last few weeks, we have argued that we are entering a watershed moment in economic and financial history, when significant decisions have to be made, since kicking the can down the road has its limits. The risks associated with those decisions are not...
European Disintegration and the Mystery of Institutional Hangover: Living in the Times of Capital Flight
There are good chances that the EU – as we know it - may be headed towards its last tango, made in Berlin. It seems that the EU has lost its innocent anonymity and is disillusioned to the point of not just encouraging capital misallocation but rather losing its...
On the Road to Damascus: Amplifying Spillover and Applying Sick Prescriptions to Dying Markets
It seems that the regime in Syria is going through its last phase. The emerging civil war may wrap up the first phase of the face-lift in the Middle East. Almost 2000 years ago, on the road to Damascus someone else set the foundations that changed the face of history....
Socrates Meets QE3: Welcome to the Ether of Financial Purgatory
I am of the opinion that one of the many things we should always remember from the great teacher is that the “unexamined life is not worth living”. It seems that we are trying to apply treatments/solutions to the serious problems of the global economy (but primarily...
From Dreaming to Screaming: Strategic Disintegration Part V
People are wondering these days: “Where is the stock market going?” Analysts look at charts, at P/E ratios, at profit margins and several other figures and try to make pronouncements as to the market’s direction. We think things might be a bit more complex than that....
Capital Structure, Dollar Shortages, and Malinvestments: Implications for Portfolio Holdings
A general perception that the global economy is slowing down seems to prevail. At the same time the Euro zone crisis – in spite of the measures taken - will be exacerbated by the known and unknown liabilities that exist in the financial and public sectors. We wrote...
