Partial Justice: the US courts v Argentina

8th July 2014

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I have in recent days worked hard to finalise my in-depth report for PRIME Economics (I am its Co-Director) analysing the outcome of all the litigation in the US Courts between NML - a Cayman Island hedge fund owned by arch-Republican US billionaire Paul Singer - and Argentina.  

The US Courts have on almost every point come down against Argentina and in favour of NML.  Not only on issues of law, but on issues of judicial discretion. On some points the Courts were right, but on many others, they have acted in my view in an unjust and partial manner.

What follows is the text of today’s blog post on the PRIME site. You can also download the pdf version of my Report here:

Report pdf: Partial Justice: US courts v Argentina

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Tags: law economics

Summer in our Suffolk garden

15th June 2014

Our garden flowers are looking wonderful just now, thanks to a skilful policy of benign neglect.  I can’t resist posting a few photos of flowers and some bees.

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Post WW2 debt reduced by productive economic activity, not inflation

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5th June 2014

A quick post: pleased to see my letter in today’s Financial Times. I was responding to a point made by Andrew Tyrie MP in his recent article criticising the IMF, and its Chief Economist Olivier Blanchard. In the course of it, Mr Tyrie made the often repeated, but wrong, point that the UK government inflated our way out of the post World War 2 high level of public debt (initially over 200% of GDP). In fact, real GDP grew at its fastest rate during this period, so it was economic activity that drove down the level of debt as a percentage of GDP.

The title given to the letter was “Debt cannot be slashed by grinding austerity” which I quite like, even if it wasn’t really the point I was making. Ah well.

"Sir, Andrew Tyrie, in “Blanchard’s admonitions went beyond good  advice”, (June 1), states that “inflation was the UK’s main escape route  from the crippling burden of debt after the second world war. No one  should want to risk repeating it”.

 The facts show otherwise, according to the Office for National  Statistics. Annual increases in gross domestic product at current prices  ran ahead, often well ahead, of Retail Price Index inflation for 19 out of  20 years from 1949 (the start of the data set) to 1968. 1952 was the  sole exception, and by a modest margin.

 It is through stimulating useful, productive economic activity that one  can most swiftly reduce debt as a percentage of GDP, not through  grinding austerity.”

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Tags: economics

Financial repression - myth, metaphor and reality

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Financial repression:

“a pejorative term akin to political repression”: Ronald McKinnon

“a technical term”: Carmen Reinhart

 A spectre is haunting economists and creditors across the world – the spectre of “financial repression”. The fear that governments may throw regulatory grit into the otherwise frictionless working of the financial services machine, and so limit the “freedom” of the machine’s owners to manufacture financial gains however they will, wherever they will, whenever they will.

The financial sector, let us recall, caused the 2008/9 crash through greed and speculation, was bailed out by governments and taxpayers in gigantic sums, which led to rises in public sector debt as measures were taken to rescue economies and look after victims of the crash.

 But now the financial sector and its intellectual lobbyists are deeply concerned.  Concerned, that is, to protect their assets and interests.

 On 8th January 2014 on the BBC Today Radio 4 programme, emerging market investor Jerome Booth told listeners:

"We’re certainly going to have to have a decade or so of reducing the debt through maybe inflation eventually. At the moment it is through financial repression."

 Asked what this meant, he defined financial repression as “any policy which captures domestic savings in order to fund the government and to do so at lower cost.”

 He added that after the Second World War, “financial repression basically stole the money of savers over many, many years.”

 “Captures”, “stole”, “repression” – this is emotive language.  In Metaphors We Live By (first published in 1980) George Lakoff and Mark Johnson argued that our use of language – indeed language itself - is pervaded by coherent systems of metaphors which we may no longer be conscious of.  They explain:

Political and economic ideologies are framed in metaphorical terms. Like all other metaphors, political and economic metaphors can hide aspects of reality. But in the area of politics and economics, metaphors matter more, because they constrain our lives. A metaphor in a political or economic system, by virtue of what it hides, can lead to human degradation.”

 “Financial repression” is self-evidently a metaphor.  Someone or something is being kept down by the repressor, evoking mental images such as tanks crushing peaceful demonstrations, or robber barons “capturing” or “stealing” your money.

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Industrial production refracted through the Euro’s lens!

14th January 2014

I could not resist posting this chart - informative in its own right - on my Refractions Tumblr site..  found in a tweet today by James Sunderland @James_bdanalyst

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More wondrous stuff from Tunis’s Bardo Museum

8th January 2014

In my last post, I gave examples of the Bardo Museum’s great (and often enormous) mosaics.  In this one, I add photos of other material, artefacts, architecture, which I found irresistible on my visit. Here goes!

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Roman era Christian font.. 6th century AD

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Gilded glass cup, Roman, 4th century. AD 

And many more to follow…

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Tunisia’s deep history, profound culture(s) - the Bardo Museum

8th January 2014

In recent weeks I have been working in Tunisia as consultant on decentralisation issues, hoping that the country can find a good democratic way forward.  When I was there is November and December, the political situation seemed dangerously blocked between “islamists” and “secularists”.

But more recently, a new interim Prime Minister has taken office, and the discussions on the new Constitution seem to have made progress. So let’s hope it goes forward peacefully and positively.

Tunisia deserves a good future, and has so much to offer - especially in terms of its history and cultures.  Carthaginians (i.e. Phoenician) trading not only across the Mediterranean, but up to Ireland and Cornwall; Romans, Christians, Arabs, Ottomans…. each leaving a great heritage (even if the Romans did try to wipe out all traces of Carthage - “Carthago delenda est”).  

And may I pay a special tribute to the Bardo Museum in Tunis, surely the world’s greatest historic museum of mosaics as well as other fine artefacts.  The Museum was formerly a rich Ottoman merchant’s house, and its architecture is also to be admired.

Here are some examples of the mosaics:

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Romans gone fishing..

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Showing the huge scale of the mosaics..

…and many more wonderful ones to follow, with poets, wild animals, serene farms…!

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Stunningly beautiful and stunningly sad…

Stunningly beautiful and stunningly sad…

Skopje - 50 years on from earthquake, rebuilding in memory of Alexander the Great

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A few days ago, the Financial Times published an article on the controversial redevelopment of the centre of Skopje, capital city of the state of Macedonia.  Well, technically the state is FYROM, the Former Yugoslav Republic of Macedonia, as the Greek government (of whatever political hue) does not like anyone taking the name.

Skopje was nearly totally destroyed in the big 6.1 earthquake of 1963, whose 50th anniversary was on 26th July 2013, just a few days ago year. Over 1,000 people were killed and 200,000 made homeless.

It was rebuilt in Yugoslav neo-socialist-realist-functionalist style for the most part, and not all looking at its best today. The current redevelopment is on a sort of interesting, not exactly my taste, in neo-classical-Grecian-floodlit architectural style, with a gigantic statue of the Great National Hero himself (Alexander we mean) at the epicentre, and loads of other statuary of great Macedonians scattered around the city centre.  It all cost around 200 million euros they say, big potatoes in a still poor country. But well worth a look, whatever the Value for Money calculus. Here are a few evening photos I took on a visit earlier this year.  Enjoy!

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Here’s Alexander, above, towering over the central square.  

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Beyoncé Chiming Again Beautifully for Change - “At Last”

And a slightly better videoing job by me! The medium is still the message. And we still love Etta James….