Every American school child learns of the exploits of the Marquis de Lafayette during the Revolutionary War. Some go on to read Alexis de Tocqueville’s Democracy in America and learn of the author’s admiration for the establishment of our democratic state.
From needing a massive US taxpayer handout at the height of the crash, on November 17 2010 General Motors successfully rose from the ashes, pushing through a $15.8 billion IPO of common shares, the second largest in US history after the $19.7 billion Visa IPO in 2008.
With the press in the developed markets now more or less resigned to hearing little of substance from G20 meetings it might be useful to take in an emerging market perspective, as given by the Director General of the Reserve Bank of India in a recent speech.
To twist the words of the old song, if you ever go across the seas to Ireland, you are unlikely to find the population in a very forgiving mood, at least as far as the government of the day is concerned. There is a real anger out and about in Ireland at the way the Celtic tiger has been brought down by foolish bank lending and equally foolish and unsustainable government promises to stand behind that lending.
The former Xerox PARC (Palo Alto Research Center) - now just PARC - recently celebrated its 40th anniversary. And what a track record of innovation it has.
I spent the first ten years of my adult life working in psychiatric facilities – in those days called mental institutions of even “loony bins” by my insensitive friends. I got the job right out of college. I simply showed up at the administration building at Manhattan State Hospital and announced that I was reporting for work. There was a bit of a kerfuffle (that’s Scottish meaning “disorder”).
In a recent interview I had with Kleinwort Benson chief investment officer, Jeremy Beckwith, he remarked that while the mid-term elections in the US might have left Democrats and Republicans gridlocked on the political front, the one thing both embattled parties could agree on was the need to protect American companies and American jobs against foreign, currency manipulating, predatory exporters, aka the Chinese and anyone else engaging in competitive devaluation.
By the 1980s people had begun to try to use futures type contracts to take the risk out of many other kinds of price movements over time, including interest rate movements and currency movements. The swaps market had arrived, and with it, the over-the-counter (OTC) derivatives market – the same market that acted as such a catastrophic amplifier of bank bad practices in the run up to the 2008 global crash.
One of everyone’s favorite corporate phrases is, “Let’s think outside the box.” That’s actually wrong. Because in the real world, there is no box. Otherwise, innovation wouldn’t exist. Smart players know this. Big time. And, as a result, they’re putting their money where their belief is.
While it is not yet time for celebrating for those who want to see a free-floating, Chinese currency market with minimal restrictions on capital flows, there are definite signs of development. Two things caught my eye recently. One was an announcement by Singapore’s Central Bank that it had agreed a currency swap with China – a necessary trade enabler between the two countries, making it much easier for Chinese and Singaporean businesses to settle with each other.