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Patrick L Young Newsletter The Frontier Financier - Prologue
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IPO


Weekly Review 4
 

Dear <<First Name>>,

Well once again Europe provided to have a lot of sad and superannuated figures at the top of the pyramid but with none of them in charge. Admittedly one of the few leaders often quoted in this forum, Jacek Rostowski, the Polish Finance Minister did a good job of berating the Euro-vacuum when speaking to MEPs.

Nevertheless, it was a week when leadership was singularly lacking on both sides of the Atlantic.

Meanwhile just when it surely could not get worse for banks UBS dropped a cool couple of billion thanks to the sort of rogue traders who seem to be harder to eradicate than the Stink bugs currently plaguing parts of the USA.

Welcome to another week, here are a few highly readable highlights of the past 7 days:

IPO This Week

This week I focussed on the thorny issue of  quantitative easing and addressed the world's most (only?) successful scheme in recent times.

Quotations of the Week:
 

“He [Obama] wants to “Win The Future” by “investing” more of your hard-earned money in some harebrained ideas like more solar panels and really fast trains. These are things that venture capitalists will tell you are non-starters, yet he wants to do more of them. We’re flat broke, but he thinks these solar panels and really fast trains are going to magically save us. He’s shouting “all aboard Obama’s bullet train to bankruptcy.”

- Sarah Palin*


*Yes, _that_ Sarah Palin whose major previous input was “How’s that hopey changey thing goin’ for ya?”
 

"China gets their oil from Libya. Why isn't China involved? They're going out spending billions of dollars a day on trying to take over the world economically. And we're spending billions and billions and billions of dollars on policing the world. Why isn't China involved with Libya?...we don't get oil from Libya, China does."

– Donald Trump

 

“How could a humourless God have created Tony Blair? Of course, one sees his value to a benign deity as a human weapon of mass destruction. Those whom the gods wish to destroy (Mubarak, Gaddafi, Berlusconi, Rebekah Brooks, Rupert himself), they first curse with his friendship. But even more than as the Bizarro World Midas whose touch transforms his golden chums into toxic waste, it is as the standout global comic figure of the age that he will one day be celebrated.”

- Matthew Norman

 

“Thanks to Obama and the permissive liberalism of his party, even Michele Bachmann could win New York right now.”

- Tim Stanley
 

"The main thing I take from this crisis is unfortunately the political leadership in the USA and large parts of Western Europe have been totally overwhelmed by the dimensions of the crisis, not able to cope. You have paralysis in Washington, and paralysis in large parts of Europe because they are incapable of agreeing and everybody is fighting short-term politics. I think the euro will survive... What the eurozone needs is fiscal discipline. It doesn't need the same level of tax, it doesn't need the same level of spending. Governments can decide that for themselves whether they are high tax, high spend, or low tax, low spend."

- former British Chancellor of the Exchequer, Ken Clarke



Meanwhile despite several reader nominations, I have opted to omit the controversial comment apparently from our QE hero of the week Silvio Berlusconi when he made it abundantly clear to an associate that, well, without getting in to the coarser phrases beloved of the Italian Premier, let’s just say the prospects of mutual QE leading to an inflationary boom are, ahem, highly unlikely.


Articles of the Week

a> Maybe it isn’t even the bottom yet but certainly Irish real estate has dropped a long long way. Somebody’s 4.2 million Euro purchase is now worth at most 850,000...and it’s a pub, in Ireland of all places! Now that’s what I call an asset collapse:

http://www.independent.ie/national-
news/pub-bought-for-euro42m-in-
2006-now-on-market-for-euro850000-
2873144.html



b> Meanwhile the one thing I got wrong in Capital Market Revolution was thinking bandwidth could expand exponentially to keep up with demand. In reality, the truth is the opposite, and these charts demonstrate beautifully a rather heated aspect to high frequency trading:

http://ftalphaville.ft.com/blog/2011/
09/16/679141/beware-the-market-spam/


- hat tip to Charles for spotting this one, thank you.

c> Eleni Gabre-Madhin, CEO of the Ethiopian Commodity Exchange is a driven woman and one who has achieved great things simply founding her market. However, like all exchanges, there can be problems along the way, here coffee can hit a bitter note for some:

http://www.businessweek.com/
magazine/ethiopias-coffee-market-
bitter-for-some-09012011.html


D> It and start-up corner, a brilliant interview with a serial entrepreneur discussing successful and failed, start-ups - the bits about the failures is by far the most interesting aspect!

http://www.fastcompany.com/1778706/
eric-ries-is-a-lean-startup-machine


E> Frankly the idea of a vaguely progressive (as opposed to daft liberal/wet collective urban nonsense) economic proposition in the New York Times (for younger readers, it’s like the Puffington Host but takes itself even more seriously) seems remarkable. Read this, it’s a great piece and actually manages to arguably offend both and left and right at the same time - excellent!:

http://www.nytimes.com/2011/09/11
/opinion/sunday/how-to-really-save-
the-economy.html?_r=2&pagewanted=all


F> ...and at the last minute, I just cannot resist slipping in this missive from Terry Smith on ETFs:

http://www.terrysmithblog.com/
straight-talking/2011/09/etfs-you
-were-warned.html


Oh and we just have idea for one of the dafter ideas of the week: the German EU energy Commissioner Günther Oettinger has suggestd that EU officials, as well as taking over Greek tax collection from ‘ineffective’ Greek tax collectors (in fact they are apparently on strike, hmm), but also “deficit sinner” countries ought to be forced to fly their flags at half mast until they sort out their debts. Hmm, what next, whole nations pace in debtor prisons?


Chart of the Week

Hot on the heels of the HFT stuff above, we liked this little rendition of how nations feel about government spending...if only any governments would actually listen to their citizens preaching economic restraint, perish the thought!

http://www.economist.com/blogs/
dailychart/2011/09/public-opinion-
government-spending


and finally our cartoon of the week:

We had thought of that Far Side one where the crisis clinic is on fire and about to go over the edge of the waterfall but that was too close to real world events frankly, so we discovered this little gem:

http://www.gocomics.com/nonsequitur
/2011/09/01



Have a great week,

Patrick


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About This Newsletter

Patrick L Young is the author of several financial market books such as "Capital Market Revolution!" and "The Exchange Manifesto" His Op Eds have been published in most of the world's leading financial media such as the Financial Times and Wall Street Journal while he has appeared frequently on BBC,CNBC, CNN, RT and other digital media throughout the world.

He is a former exchange CEO and serial director of various financial markets businesses. Nowadays he is a keen investor and advocate for emerging markets, particularly the New Europe, as well as advising investors in financial markets infrastructure world-wide.



 

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