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Patrick L Young Newsletter The Frontier Financier - Prologue
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In Patrick's Opinion

 

010

An Irish Lament!

 

“It may seem strange to some that The Irish Times would ask whether this is what the men of 1916 died for: a bailout from the German chancellor with a few shillings of sympathy from the British chancellor on the side. There is the shame of it all. Having obtained our political independence from Britain to be the masters of our own affairs, we have now surrendered our sovereignty to the European Commission, the European Central Bank, and the International Monetary Fund.”

The Irish Times, Op-Ed “Was It For This?


“You cannot fix a solvency problem by putting new debt on top of old debt. The Irish government must move more forcefully to overcome a debt overhang that discourages new investments and erodes the future productivity of the economy.”

- Mohamed A. El-Erian


"This bail-out is about the Euro elite's dogged refusal to acknowledge the structural flaws at the heart of the entire single currency project."

- Liam Halligan

 

Dear <<First Name>>,


Apologies, it has been a while. I have been busy editing a book project created by Lee Robinson of Trafalgar Asset Managers. "The Gathering Storm" is a tome of which I am very proud given the short lead time. The book has been rated a "must read" by The Financial Times and been featured  by CNBC, Russia Today TV and BBC World Service Radio, amongst many media outlets.

If you haven't already picked up a copy, may I ask you to do so via this link.  Each contributor has nominated a charity to benefit from their share of the proceeds. My choice is a foundation for the disabled established by leading Polish actress Anna Dymna. Out of the 30 Pound cover price almost 25 Pounds goes direct to charity so I urge you to buy the book - or ideally several!

To resume this dialogue, as somebody born on the emerald isle, I must address the rampant chaos and disorder, not to mention the insanity, of unfolding events. When editing "The Gathering Storm" it was clear that Ireland's economic future was tenuous as the burst bubble plummeted back to earth.

Alone amongst western nations, the Irish government worked to resolve the dire economic situation. However, the knee jerk blanket support for a systemically nebulous (in terms of 'hoi polloi" customer deposits) bank in the shape of Anglo Irish (a leverage monster in extremis) ultimately proved a step too far. Sadly Ireland taking its medicine counts for nothing - the system prefers to support (covert) serial deficit runners. Many governments have undertaken off balance sheet activities for years that need to be rendered transparent. This warped concept of 'muddle through' will not sustain the Euro zone.


Ultimately Ireland has been sacrificed on the baby/bathwater mutual clearing principal: dump the outlying smaller nations in the (desperate) hope that deluded Mediterranean lands can survive.

Ireland has in fact funded its obligations until the middle of next year! This prudence allied with honesty in its total debts and a concerted attempt to treat the problem has resulted in effective supranational decimation. Meanwhile, the EU and IMF are making a power play to control national governments' economic policies. Yet the EU itself couldn't run a corner shop under normal budgeting rules. Even Bernie Madoff's auditors would likely turn up their nose at EU accounts. Deficit denial runs deep in EU culture - a trait tacitly encouraged by Ireland being the sacrificial lamb to save the Euro.


Meanwhile the sheer and utter inability of EU leaders to understand the macro environment remains stultifying. The poison dwarf of the Elysee is amongst those urging higher Irish corporate tax rates. This demonstrates just how little the cocooned political-class actually comprehend of the world outside.  Even the geographical epicentre of the EU is closer to the borders of the old Warsaw Pact than it is to Paris or even Brussels. The Irish understand that corporate taxation is a global issue. Nations to the east increasingly regard taxation as a flat rate affair to be applied at rates where the low teens are standard. Raising Irish tax rates may appeal to sclerotic corporatist/collectivist western regimes but it just will not work in the new world order.

Ultimately, the Irish example only makes multiple individual theses of “The Gathering Storm” more pertinent  - this is a book you really cannot afford to miss if you want to approach investing in the future with an understanding of the issues, opportunities and pitfalls that may lie ahead. Stormy weather lies ahead, have you considered the options?

Meanwhile as you read the book, I'm inclined to make serious plans for distressed asset purchases.

As usual it's been a pleasure talking at you...


With best wishes,

Patrick

Patrick L Young
patrick@derivativesvision.com


 


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'The Gathering Storm"

- This week apart from Ireland, TFF is all about raising money for charity and supporting "The Gathering Storm" a unique book about markets as analysed by a selection of the minds who foresaw the credit crunch...


The Gathering Storm - Can You Afford Not to Buy It?


Current Projects

Frankly too much to mention right now!

On the advisory front, various exchange and IT issues percolating, particularly after the WSE and Betfair IPOs... Also trying to get some more book work done!

Stay tuned for some interesting developments.

Travel Plans

Various destinations in Europe east and west this month. .

About This Newsletter

Patrick L Young is the author of several financial market books such as "Capital Market Revolution!" and "The

The original Capital Market Revolution cover

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, Russia Today TV and other digital media throughout the world.

My expertise is, (in no particular order!) exchanges, derivatives, market infrastructure and financial centres, as well as emerging markets (parrticularly "New Europe").

I can claim modest provenance as an early adopter on the web, having published various online magazines along with other WWW ventures since 1995.

Nowadays I enjoy a varied portfolio of advisory work (most notably for investors in exchanges) but along the way I have done just about everything from multiple financial start-ups through to advising government and other stakeholders in financial centres the world over. I also indulge in some  entrepreneurial projects too. After more than 20 years in finance some folk might think I am due a spot of remission for good behaviour. I think it is clear from this bulletin, my passion for markets remains as keen as ever!

 

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