“We must accept finite disappointment, but must never lose infinite hope.” – Martin Luther King Jr.
Companies that don’t pay interests on their debt are a like these students who never sit an exam: they somehow scrape by without any notable successes or accomplishments. The current level of rates should be encouraging investment because companies’ margins are much higher than the cost of capital, that is itself negligible. Even the…
How could we not recall the British cult TV series from the ‘60s, The Prisoner, where a giant bubble frantically pursued the hero played by Patrick McGoohan? Our world now finds itself in a similar situation: we are all hostages to the now-plentiful bubbles, and not only the speculative bubbles that infect our markets. It’s…
Why get worried about exaggerations – aberrations even – over current stock market prices when the American index of reference, the S&P 500, is only showing drops in the way of 1%? While US public debt is reaching astronomical heights of nearly 22 trillion dollars and while companies listed on this S&P 500 index have…
Deceased in 1996, Hyman Minsky was an economist who was barely known at all during his lifetime. Only certain enlightened minds – unorthodox ones, of course – were interested in his research which focused on the causes of financial crises. He owed his hour of glory to the subprime implosion in 2007 and it’s as…
Well before the creation of the euro, the Canadian, Robert Mundell, was to enumerate the conditions of success for a monetary union. His works won him the Nobel Prize in 1999, precisely the year that the euro was launched. According to Mundell, a currency shared by a large geographic area is only viable when there…
The secular stagnation that is infecting our economies brings with it the germs of instability and financial torment. Since interest rates and monetary creation are the only weapons still at the disposal of the only public institutions that still wield some sort of power in our modern world, their initiation with a view to relaunching…
It’s not a coincidence if real estate prices – relatively stable up until now – suffered unhealthy volatility at the dawn of the 1990s. This phenomenon was the direct consequence of integrating the banking and financial systems together because deregulation and innovations such as securitisation intensified the flow of cross-border and transcontinental capital, thus inducing…