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Patrick L Young Newsletter The Frontier Financier - Prologue
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Weekly Review 6

Dear <<First Name>>,

So it was the week when LME was finally (and justly) deluged with offers apparently and when LCH.Clearnet entered exclusive negotiations with the LSE. The latter was the topic for my IPO this week.

Meanwhile, the Euro crisis festers on and with news that scientists have apparently found something moving faster than the speed of light, it was a relief to realise it wasn’t expanding Sovereign Debt.

Here’s a review of some cool quotations and interesting reading from the past week, enjoy!

Statistic of the week

EU Financial Transaction Tax:

Net Anticipated Revenue (Stalinistic optimal variant estimate from EC): 86 billion Euros

Net anticipated cost to EU (again from the EU/EC analyses) anywhere from 220 billion up to 0.5% of EU GDP.

...and the regulators have the nerve to apply ‘fit and proper’ tests to analysts, brokers and traders, why not politicians and eurocrats, purrlease!

Quotes of the Week

'If a generous sovereign from Mars came down and paid off every penny of Greece's debt tomorrow, the fundamentals of the European crisis would not be altered.'

- Lawrence Summers

“The lesson of Greece is that lending ever greater sums to a mismanaged and corrupt economy does not make it solvent. It defers the day of reckoning, but delivers no salvation. To escape from debt, a sovereign borrower has four options. It can spend less than it earns and use the surplus to diminish obligations. Greece has little hope of that. It can sell assets. The trouble is, Greece’s 50-billion-euro privatisation programme knocks only a small hole in its commitments and is way behind schedule. It can inflate away its debt, but the European Central Bank, the guardian of the euro’s integrity, will not permit Greece to do so. Finally it can bilk its creditors and start again. It’s a financial solution to a financial crisis – and that’s what Greece will do. Because, as Kweku Adoboli discovered, miracles are hard to find."

- Jeff Randall

"The first medicine didn't work, and now we are simply doubling the dose. My fear is that when the big bang happens, it won't just be us who will have to pay but generations hereafter."

- Wolfgang Bosbach, once a prominent champion of European integration, seems to be keen for the German CDU to become a little more outspoken on EU matters!

“In economic terms, the age we are living in is simply terrifying. But politically, it is of special interest, because every accepted orthodoxy is in the process of being dismantled. Most senior politicians are condemned to operate within an exceptionally narrow set of parameters, meaning that they do little more than administer a system they inherited from others. But our current generation faces a remarkable and very rare challenge: to go out and create a new structure for British governance and public discourse.”

- Peter Oborne

“I regard the huge buy-up of bonds of individual states by the ECB as legally and politically questionable. Article 123 of the Treaty on the EU’s workings prohibits the ECB from directly purchasing debt instruments, in order to safeguard the central bank’s independence. This prohibition only makes sense if those responsible do not get around it by making substantial purchases on the secondary market. Who will rescue the rescuers?

Solidarity is the core of the European Idea, but it is a misunderstanding to measure solidarity in terms of willingness to act as guarantor or to incur shared debts.

With whom would you be willing to take out a joint loan, or stand as guarantor? For your own children? Hopefully yes. For more distant relations it gets a bit more difficult."

- German President Christian Wulff

Articles of the Week

1) What is a trillion dollars? For those of us not managing a central bank or an EU  rescue pact, here’s a handy reference guide:

2) Patent Wars?

3) A wonderfully fishy alternative currency story (and not about bitcoin either!):

4) Entrepreneur’s Corner - aka what not to say to the VC guys if you want the money:

5) Just in case you haven’t seen it already, an interview with some itinerant Irish bloke in an otherwise excellent Polish magazine called “Equity” translated into English:

Chart of the Week

...Well at least living in Britain you don’t have to worry about the bills run up in Europe. Errrr....

Video of the Week

Last week lots of people got very worked up about some fake finance guy saying Goldman Sachs ruled the world over on the BBC. Actually we found an altogether more heartwarming story. Not everybody knows Kip but a lot of you on this list do and of course we all know he has of late disappeared into the ether after a somewhat challenging few months. We miss him and of course we miss the money we lent him too but in the meantime, we seem to have tracked him down. He’s now appearing as a man from Ulan Bator on the Polish version of “Dancing With the Stars!” As you can see he has had a bit of plastic surgery but there’s no mistaking that unique dress sense which no makeover could ever hide - enjoy his paso doble!

Until next week, thanks for reading,


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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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