Showing posts with label 1st millennium. Show all posts
Showing posts with label 1st millennium. Show all posts

Monday, August 28, 2017

Talking Global Macro Investing With A 25-Year Market Veteran

By Chris at www.CapitalistExploits.at


If you were rich, successful, and intelligent - which often, not always, go hand in hand together - where would you live?


The last time I was in the Rockies, I remember thinking to myself. You know what, if it weren"t for the fact it"s so damn far from the beach I could actually live here. It"s really quite lovely. Bite-your-hand-to-stop-you-from-crying-out-loud-lovely and if, like me, you"re a sucker for snowboarding, then it"s pretty hard to be disappointed.


After having just spent a few days of pure bliss (uninterrupted sunshine with zero wind) skiing on this baby in New Zealand, I can certainly appreciate living in Vail.





Maybe that"s why Julian Brigden, the co-founder of
Macro Intelligence 2 Partners, lives there. I"ve never asked him about it, but I did ask him a bunch of other questions which I share with you today.



The quick and dirty on Julian"s background:



He"s accumulated 25 years of experience in financial markets. From 1999 to 2004, he was with Medley Global Advisors, a macro policy intelligence firm. Then from 2004 through 2011, Julian served as North American Head of Hedge Fund Sales at Crédit Agricole.


He has worked in London, Zurich, New York, and Vail at UBS, Lehman Brothers, HSBC, Drexel, Credit Suisse, and Salomon Brother in foreign exchange and precious metals.


If you"ve not heard of Julian, he"s easily searched with some stubby fingers and Google as he"s been featured on Bloomberg, CNBC, the New York Times, Wall Street Journal, and in Barron’s among other for the firm"s research on emerging markets, liquidity, QE, bubbles, and global FX flows.



As you can see, Julian"s far from some dolt-peddling advice.



In our recent conversation, we chatted about a number of things:


  • The state of the global bond market

  • Julian"s views on the US dollar

  • What happens when central bankers get what they wanted (case study: Europe)

  • Demographics and Japan

  • And a host of other things which came up in conversation

I hope you enjoy it!



- Chris


“When the second wave comes in terms of the stimulus package from Trump and in particular the corporate tax repatriation, the sucking sound from the rest of the world, as the dollars come home, will mark the ‘risk off’ phase and it’s possible that you push the dollar so far that its status ultimately as the reserve currency will end up being challenged." — Julian Brigden


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Liked this article? Then you"ll probably like my other missives on


this topic as well. Go here to access them (free, of course).


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Tuesday, July 25, 2017

"In The Footsteps Of Rome" - Is Renewal Possible?

Authored by Charles Hugh Smith via OfTwoMinds blog,


Once the shared memories of these values are lost, the Empire ceases to exist; there is nothing left to reform or renew.


Is renewal / recovery from systemic decline possible? The history of the Roman Empire is a potentially insightful place to start looking for answers. As long-time readers know, I"ve been studying both the Western and Eastern (Byzantine) Roman Empires over the past few years.


Both Western and Eastern Roman Empires faced existential crises that very nearly dissolved the empires hundreds of years before their terminal declines. The Western Roman Empire, beset by the overlapping crises of invasion, civil war, plague and economic upheaval, nearly collapsed in the third century C.E. (Christian Era, what was previously A.D.) -- 235 to 284 C.E., fully two hundred years before its final dissolution in the fifth century (circa 476 C.E.).


Meanwhile, the Eastern Roman Empire (Byzantine Empire) faced similar crises in the seventh and eighth centuries, as its capital of Constantinople was besieged by the Persians in 626 C.E. and the Arab caliphate in 674 C.E. and again in 717 C.E. The invasions which preceded the sieges stripped the empire of wealthy territories and the income those lands produced.


In both cases, the Empire not only survived but recovered a substantial measure of its former resilience and stability. Fortune delivered strong leadership at the critical moment: leadership that was able to protect itself from petty, self-aggrandizing domestic rivals, force the reorganization of failed, self-serving bureaucracies, inspire the populace to make the necessary sacrifices for the common good, win decisive military victories that ended the threat of invasion, and generate a moral claim to leadership via personal rectitude and/or participation in a religious revival.


Absent such strong, stable, legitimate leadership, neither empire would have survived their existential crisis.


But strong leadership alone isn"t enough. A strong military leader can win battles, and a strong political leader can aggregate power, but these are merely steps to the ultimate goal of strong leadership, which is to reform the Imperial system so it once again serves the needs of the entire Empire rather than just the greed of the few at the top of the wealth-power pyramid.


The system itself must still hold the potential to be reformed. If the systems of communication, trade, control and finance have all eroded beyond the point of no return, then the victories of a strong leader die with that leader.


The army must still have the means to recruit new legions, the Treasury must still have a system to collect tax revenues, the central leadership must have a way to communicate with far-flung commanders and local leaders, and so on.


The collective shared memory of imperial cohesion and competence must still exist in the general populace. Any political group identity, be it tribe, village, nation or empire, is anchored by a shared awareness of membership, i.e. the rights and responsibilities of belonging, and a collective memory of the group / empire as a functioning whole that served the many and not just the few.


Once the shared memory of the Empire as a functioning whole is lost, the entire notion of empire is lost.


The leadership in these existential crises of the third century C.E. in the West and the eighth century in the East could still draw upon a collective memory of a functioning empire. Residents had not yet lost the shared memory of serving in the army, of paying taxes, of stable trade protected by the Empire, of a stable Imperial currency, and so on.


Once the shared memories of these values are lost, the Empire ceases to exist; there is nothing left to reform or renew.



We are far down the road to a system that serves the few at the expense of the many. The collective memory of a system that once served the common good is fading. Strong leadership can still wrest popular political power from the self-serving elites atop the wealth-power pyramid and wield this political power to reform the system so it serves the many instead of just the few, but the window for such reform /renewal is closing fast.


In another decade, a living system that served the common good rather than just the interests of a few will be as distant as the shattered monuments of ancient Rome.

Monday, February 27, 2017

Of Bread And Circuses

Originally authored by Admiral Ben Moreell on January 1st, 1956; via The Burning Platform blog,


A twentieth-century repetition of the mistakes of ancient Rome would be inexcusable. Rome was eight and a half centuries old when the poet, Juvenal, penned his famous tirade against his degenerate countrymen. About 100 A.D. he wrote: “Now that no one buys our votes, the public has long since cast off its cares; the people that once bestowed commands, consulships, legions and all else, now meddles no more and longs eagerly for just two things, bread and circuses.” (Carcopino, Daily Life in Roman Times [New Haven, Yale University Press, 1940], p. 202.) Forty years later, the Roman historian, Fronto, echoed the charge in more prosaic language: “The Roman people is absorbed by two things above all others, its food supplies and its shows.” (Ibid.)


Here was a once-proud people, whose government had been their servant, who had finally succumbed to the blandishments of clever political adventurers. They had gradually relinquished their sovereignty to government administrators to whom they had granted absolute powers, in return for food and entertainment. And the surprising thing about this insidious progression is that, at the time, few realized that they were witnessing the slow destruction of a people by a corruption that would eventually transmute a nation of self-reliant, courageous, sovereign individuals into a mob, dependent upon their government for the means of sustaining life.


There are no precise records that describe the feelings of those for whom the poet, Juvenal, felt such scorn. But using the clues we have, and judging by our own experience, we can make a good guess as to what the prevailing sentiments of the Roman populace were. If we were able to take a poll of public opinion of first and second century Rome, the overwhelming response would probably have been—“We never had it so good.” Those who lived on “public assistance” and in subsidized rent-free or low-rent dwellings would certainly have assured us that now, at last, they had “security.” Those in the rapidly expanding bureaucracy—one of the most efficient civil services the world has ever seen—would have told us that now government had a “conscience” and was using its vast resources to guarantee the “welfare” of all of its citizens; that the civil service gave them job security and retirement benefits; and that the best job was a government job! Progressive members of the business community would have said that business had never been so good, that the government was their largest customer, which assured them a dependable market, and that the government was inflating currency at about 2 per cent a year, which instilled confidence and gave everyone a sense of well-being and prosperity.


And no doubt the farmers were well pleased too. They supplied the grain, the pork and the olive oil, at or above parity prices, for the government’s doles.


The government had a continuous program of large-scale public works which were said to stimulate the economy, provide jobs and promote the general welfare, and which appealed to the national pride.


The high tax rates required by the subsidies discouraged the entrepreneur with risk capital which, in turn, favored the well-established, complacently prosperous businessman. It appears that there was no serious objection to this by any of the groups affected. An economic historian, writing of business conditions at this period, says, “The chief object of economic activity was to assure the individual, or his family, a placid and inactive life on a safe, if moderate, income . . . . There were no technical improvements in industry after the early part of the second century.” There was no incentive to venture. Inventions began to dry up because no one could reasonably expect to make a profit out of them.


Rome was sacked by Alaric and his Goths in 410 A.D. But long before the barbarian invasions, Rome was a hollow shell of the once noble Republic. Its real grandeur was gone and its people were demoralized. Most of the old forms and institutions remained. But a people whose horizons were limited by bread and circuses had destroyed the spirit while paying lip service to the letter of their once hallowed traditions.


The fall of Rome affords a pertinent illustration of the observation by the late President Lowell of Harvard University that “no society is ever murdered—it commits suicide.”


I do not imply that bread and circuses are evil things in themselves. Man needs material sustenance and he needs recreation. These needs are so basic that they come within the purview of every religion. In every religion there is a harvest festival of thanksgiving for good crops. And as for recreation, we need only recall that our word “holiday” was originally “holy day,” a day of religious observance. In fact, the circuses and games of old Rome were religious in origin. The evil was not in bread and circuses, per se, but in the willingness of the people to sell their rights as free men for full bellies and the excitement of the games which would serve to distract them from the other human hungers which bread and circuses can never appease. The moral decay of the people was not caused by the doles and the games. These merely provided a measure of their degradation. Things that were originally good had become perverted and, as Shakespeare reminds us, “Lilies that fester smell far worse than weeds.”


More than fifty years ago, the great historian of Rome, Theodore Mommsen, came to our country on a visit. At a reception in his honor, someone asked him, “Mr. Mommsen, what do you think of our country?” The great scholar replied, “With two thousand years of European experience before your eyes, you have repeated every one of Europe’s mistakes. I have no further interest in you.”


One wonders what Mommsen would say today in the light of the increasingly rapid destruction of our traditional values during the past 25 years.


Many of our people have been converted to the idea that liberty has been tried and found wanting, just as many believe that Christianity has been tried and found wanting. They do not know that what has been found wanting is not the true values of liberty and religion but only perversions, worthless counterfeits. So when we urge upon them those true values, they shy away. They have been fooled before, so they want to try something which they think is “new.”


How far have we departed from our traditional values? There is no mystery here. It is well known that the basic policies of the two major political parties with respect to the intrusion of the State into the economic and social lives of the people differ only in degree and method. There is no discernible difference in fundamental principle. Prominent political figures of both parties pay lip service to the letter of our Declaration of Independence and Constitution, while they violate the spirit.


The proponents of an all-powerful centralized government have erected a bureaucratic colossus which imposes upon our people controls, regimentation, punitive taxation and subsidies to pressure groups, thus paralleling the “organized mendicancy, subvention, bureaucracy and centralization” which played so great a part in the downfall of Rome!


We are demoralized by an indecent competition. Each one denounces government handouts and privileges for the other fellow—but maintains that his special privilege is for the “general welfare.” The slogan of many of us seems to be, “Beat the other fellow to the draw”—i.e., “draw out of the public treasury more than you put in, before someone else gets it.”


I am no prophet of inevitable doom. On the contrary, I am sounding an alarm that disaster lies ahead unless present danger signals are heeded.


What specific steps should we take? I believe that neither I nor anyone else, no matter how exalted his position, can determine for 165 million people their day-to-day economic and social decisions concerning such matters as wages, prices, production, associations and others. So I propose that these decisions, and the problems connected therewith, be returned to the people themselves. This could be done in four steps, as follows:





First—Let us stop this headlong rush toward collectivism. Let there be no more special privileges for employers, employees, farmers, businessmen or any other groups. This is the easiest step of all. We need only refrain from passing more socialistic laws.



Second— Let us undertake at once an orderly demobilization of many of the existing powers of government by the progressive repeal of those socialistic laws which we already have. This will be a very difficult step because every pressure group in the nation will fight to retain its subsidies, monopoly privileges and protection. But if freedom is to live, all special privileges must go.



Third—Of the powers that remain in government, let us return as many as possible to the states. For on the local level, the people will be able to apply more critical scrutiny to the acts of their government agents.



Fourth—Above all, let us resolve that never again will we yield to the seduction of the government panderer who comes among us offering “bread and circuses,” paid for with our own money, in return for our sovereign rights!



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Admiral Ben Moreell (1892 – 1978) was the chief of the U.S. Navy’s Bureau of Yards and Docks and of the Civil Engineer Corps. Best known to the American public as the Father of the Navy’s Seabees, Moreell’s life spanned eight decades, two world wars, a great depression and the evolution of the United States as a superpower. He was a distinguished Naval Officer, a brilliant engineer, an industrial giant and articulate national spokesman.