On Bank Losses, Hedging, Fiat Currencies, and Risks: The Role of Anchors
Last Thursday evening, JP Morgan Chase admitted to losses of at least $2 billion on a $100 billion derivatives bet, baptized as hedging. As time goes by, the actual losses may increase. For review purposes, it is helpful to revisit the worldwide $700 trillion monster...Useful Idiots No More: Political Hubris and Economic Realities
The results of the elections held in Greece last Sunday may well have sent a powerful signal to politicians and policy makers worldwide, that has yet to be discussed by the press. That message simply says: “We are no longer your useful idiots”. It seems that for many...Resources’ Nationalization in the Midst of Disintegration: A Paradigm Shift?
From last weekend’s IMF meetings we learned that its “firepower” had increased substantially by over $400 billion to be used as needed in light of the deteriorating situation in Europe. That seems a bit contradictory given that it was the IMF that warned earlier last...Strategic Disintegration Part III: A Hexagon of Forces and the Trajectory of the Euro
The figure below shows the six forces which we believe are at work in determining the trajectory of the Euro in the foreseeable future. The analysis below discusses the six forces that are affecting the Euro’s future and hence the Euro zone’s potential. We present the...The Migration of Delusion and the Epidemic of Irrationality
The markets were rattled in the last few days. Let’s review what the conventional wisdom underwrote as the main causes (we use the plural causes, since the explanation was changing almost on a daily basis, as heuristics – the hard wired tendency of humans to perform...Sign Up for Our Publications
