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Why are we in a credit crisis? Why has it come to the point where subprime mortgages are being securitised? Basically, because of the thirst inversopata from both institutions and private individuals. This demand for paper, which far exceeds the borrowing capacity of traditional issuers, has led to the financos the creation of AAA alternative. The tightening of the interbank liquidity market has exacerbated the negative outlook. And the accumulation of reserves by Asian central banks – which have played a decisive role in the financial landscape for the past decade – was not the most favourable backdrop for entering such a turbulent phase.

But let’s try to break down the components of this crisis: Wall Street christened this creation alternative AAA-rated debt such as structures in which the underlying asset was nothing more than junk bonds to which they added some ingenious payment rights. Their approximate 8% interest rate and the maths did the rest. These interest rates are divided into three categories: Senior, mezzanine and equity, according to their probability of default. The tranche senior, although its underlying asset generates higher interest, is traded only slightly above the yield on traditional AAA-rated debt. This ensures it can be placed on the market and, surprisingly – with the benefit of hindsight – it is also rated AAA. The debt mezzanine is attracting greater interest and is rated as still being considered investment grade. And finally, the investment bank or financial institution itself, which creates and promotes this structure, retains the radioactive waste, that is to say, the section equity, which will keep the entire facility on tenterhooks for years. It is rather like what happens when a nuclear power station suffers a major incident. Of course, this organisation can sell the waste to third parties and offload that radioactivity in true Where's Wally?.

In 2006, this phenomenon of credit securitisation reached a figure of 500,000 million dollars. Some sources say that 150,000 people are facing the risks associated with what is known as a mortgage subprime American. In the first half of 2007, the value of instruments maturing between two weeks and three months was comparable to Spain’s GDP. Although half of that amount had already matured by 16 September without any major surprises other than those already known.

Mortgages on properties in the US granted to those whom the ‘ordinary banking sector’ (I do love calling it that!) did not consider sufficiently creditworthy have largely fuelled these processes and make up the majority of the portfolios of these structured products. If we add to this the first fall in US property prices in 40 years, the result is a default rate of close to 20%. However, contrary to what one might expect, it is not the bondholders who have been the first to be affected mezzanine and equity but the senior or AAA. The reason is very simple: these are the ones with the nearest maturity dates – as we have said before, ranging from two weeks to three months. And as things stand today, in early October 2007, the outstanding bonds are still the key to what will happen to the system.

But here’s the crux of the matter: investors tend – as do we – to reinvest short-term funds in similar securities, but given the scenario of the subprime At present, lenders’ instructions are quite different. Faced with a lack of alternatives for investing the money in substitute securities, the developers and investment banks that have marketed these structures are now faced with having to repay the equivalent of Spain’s GDP in just two months. The result of this situation: Credit crisis. Added to the liquidity crunch in the international banking system – which is directly affected – is the contagion of caution (or panic) throughout the entire system and the demand for reserves from Asian central banks mentioned at the outset. The result is that central banks are obliged to inject liquidity into the system to prevent spikes in interbank rates and further caution (or panic).

Most of you readers will be thinking: «If the crisis has so far only affected maturities…’ senior Or AAA, what will happen when the mezzanine y equity?»Well, in all likelihood, the percentage of defaulted mortgage loans will rise, to the detriment of the solvency of those upcoming maturities. But risk aversion is unlikely to increase, and with it the existing liquidity crisis. We could therefore say that the collapse of the least solvent parties will affect those holding them at that time, but the impact on the system as a whole will depend solely on the panic that we are collectively unable to quell.

Where does the risk lie? In other words, which entities hold securitisations with underlying assets? mezzanine y equity? Here we must return to the article’s title: Where’s Wally? The vast array of reliable structured debt – not based on risky mortgage or even consumer loans – is so substantial and widespread that it provides the perfect environment in which to hide Wally. Furthermore, no one knows which institutions are particularly exposed, as these transactions are off-balance-sheet. The greed of financiers and investors It has allowed a corrupt Wally to change his clothes, to the point where he is no longer even recognisable by his red and white horizontally striped jumper, glasses, jeans and matching woollen hat. The very same major banks around the world could have Wallys with different appearances among their assets. And they may or may not be aware of it. That is why the reluctance to lend money to one another cannot be substantially reduced in the short to medium term. Central banks will have to continue injecting stability and bailing out specific cases of obvious illiquidity, such as Northern Rock. But these are likely always limited to smaller organisations and do not jeopardise the foundations of the system.

It may well be the very assessment of future risks in mezzanine y equity will help to mitigate its effects. If Wall Street was able to create the Beast, will certainly be able to create the Bella which will, in turn, finance current and future contraction. Although some people seem not to care in the slightest if they lose sight of Wally, as long as they have enough credit on their mobile to send a text message asking help as he explains to us Echevarri in his latest post. Perhaps if Wally were recognisable in his usual get-up, they would prefer to look the other way, as some have done for years, selling their fish with radioactive waste without the slightest shame. But the buyers of that supposedly AAA-grade fish are partly to blame for spreading the radiation we’ll have to live with for a few years.

The million-dollar question: How would the global credit system react if the mortgage crisis were to spread to Europe as well? It is true that the granting of subprime mortgages – an alternative to conventional banking – is not widespread here, but the crisis in the sector in Spain is showing us its worst side, as we are told in GurusBlog, describing that possible scenario as perfect storm.

A turbulent landscape in which the ‘smart’ currencies (the US dollar and the Japanese yen) continue their strategic standoff with the ‘tricky’ yuan. At the same time, they open up interesting diversification opportunities for European investors, as we discover José María Díaz Vallejo in *Bulls, Bears and Donkeys*.

Bloody hell, as our contributor and friend, Global Counsellor, would say: I love this game!

I read an article in today’s *Expansión* by S. Pérez entitled The tactics of fund managers, on which I simply must share a few thoughts with you all.

What’s more, Gustavo Trillo, Head of Management at JPMorgan Asset Management Spain and Portugal, acknowledges that:

“Our investment strategy has been temporarily disrupted. Before the summer, we were inclined to maintain equity holdings in our portfolios due to the favourable economic climate: the relative slowdown in the United States was offset by improved growth in the rest of the world. We felt that equities were the best risk-adjusted asset. With the crisis, stock market returns have fallen.”.

I can't believe what I'm reading! Could it really be that a director of management at an organisation Will leading firms offer their clients more than just equities and the associated fees? Will they be able to offer their clients investment alternatives where their operating income per client plummets in favour of a new asset allocation, that can safeguard the well-being of their portfolios in an environment as challenging as the current one? Will we finally see a fund manager advising investors to underweight equities in favour of the current opportunities in fixed income and alternative investments? I continue reading the article, gripped by Mr Trillo’s previous paragraph, much like someone eagerly reading the dénouement of a thriller with a happy ending.

But here are the remarks from the newly appointed Head of Management at JPMorgan Asset Management Spain. When asked whether the credit crisis will have a negative impact on equity fundamentals, he replies without a hint of hesitation:

“It doesn’t have to be irreversible.” “It will be negative, but temporary.” Trillo highlights the stance adopted by central banks, particularly the Fed, in favour of economic growth. There is a new scenario, says Trillo, and it is positive for equities. How so? «When the Fed starts cutting rates—provided it’s not because of an economic recession—the stock market performs well for twelve months. That’s why now is the time to reposition ourselves to increase our exposure to equities and focus on those markets that are likely to perform best.”

Spectacular, the show must go on. The worst thing is that when investors are told what they want to hear, they tend to believe it hook, line and sinker. If the speaker is also wearing a smart tie and works for a prestigious financial institution, their words are taken as gospel.

But it’s not all going to be pearls In this article, we also come across statements which, whilst obvious, are by no means insignificant, such as the comments by Nicolás Llanás, Skandia’s head of investment in Spain: «The crux of the matter is that we must distinguish between the sectors most affected by the credit crisis and the rest.» referring to equities. And as for fixed income: «The only way to protect yourself is by adopting a very conservative strategy, focusing on sovereign debt and investment-grade corporate bonds. »To try and boost returns a little, you could round out the portfolio with some equities.’ As I said, it goes without saying, but in our view it’s entirely sensible and reasonable. In short, a breath of fresh air amidst all this pearl although, unfortunately, they are all lumped together under the generic terms of managers, analysts, specialists, etc…

I would like to make it clear that we are not specifically advising against investing in the stock market, but rather criticising attitudes that we consider, at the very least, erratic and not sufficiently focused on the client’s best interests, with attitudes that bread for today, more wood, or the show must go on. And what is best for each investor and their family is comprehensive advice that goes far beyond the basics.

Hardly anyone now doubts that the property boom is a thing of the past. The evidence of the difficulty in selling properties has begun to make the public aware of something that many of us had already spotted and warned about almost two years ago. Back then, those reluctant to sell their excessive and unsustainable property portfolios argued: «But what are we supposed to do with the money? The bank only gives us a measly 2%.» The result of this flawed reasoning: Brick and bag, or to put it another way illiquidity and risk at the mercy of their respective cycles. Many chose to keep walking towards the abyss at the end of the property boom and increase the perceived value of their inmupossible quarter after quarter. The anchoring effect The rise in prices per square metre in recent years had clouded their judgement. They had two subjective reasons for not selling, despite the objective wisdom of capitalising on the final surge to avoid being caught in the impending downturn: the low returns on fixed-income investment alternatives; and the still-rising statistics on prices per square metre. Very few decided at that time to change their wealth management strategy; however, a significant number of our clients did agree to a change of course, although they had to endure several months of pressure and almost mockery from amfriends and acquaintances. Today, that pressure has vanished, and they derive a deep sense of satisfaction from discussing the current and future problems of the property market with their friends. Despite our efforts to convince those who sought our advice that it would soon be too late, there were quite a few who insisted that «property prices never fall». Perhaps they regarded the 1990 crisis as merely stand-by In the property price race, they were too young at the time to take an interest in property prices as investors, or they simply chose to forget all about it.

The Euribor It has risen sharply in a short space of time, but it isn't that high when compared to the interest rate history in Europe and Spain. As we pointed out in The Ferrari, diesel. Fresh orange juice. And the Euribor +0,30, we may not reach the 10.40% level of 15 years ago, but there is no guarantee that rates won’t rise further. In any case, the credit crisis has made the future of interest rates highly unpredictable in the medium and long term.

They are starting to to hear The first comments regarding the system’s ability to absorb the effects of the credit crisis. I find it truly reassuring that this is the case, although, as I mentioned to you during the tense heatwave this summer, I have always believed this to be true. Are we out of the woods yet? Not at all. I would even go so far as to say that the worst may still be to come. However, I believe the uncertainty surrounding the resilience of the vital structures of our global economy is gradually dissipating in a positive way.

Although it may go without saying, it is important to note that we are now at the end of the US trading session on Friday 14 September 2007. In other words, returning to the possible scenarios we outlined in The myth of the Bin Laden Options and the responsibility of the investor:

«If, as is to be expected, there are no major global terrorist incidents in the coming days, we will continue to make the most of the current opportunities and try to slowly heal the wounds caused by the threat of »credit crunch.'"

It seems that healing is still a long way off, although, as we mentioned in that same article, the situation could become much more complicated at this particularly delicate time.

The global economy is going through a period of turmoil, much like that experienced by the passengers on a plane when the pilots detect abnormalities mid-flight. The tranquillity of a journey – during which comfort had made the passengers and crew forget that they were at an altitude of 10,000 metres, travelling at a speed of 950 km/h and with an outside temperature of 25 degrees below zero – has suddenly been shattered.

Many passengers are now realising that they are travelling on a craft with many hours of flight time under its wings and in its engines, whose materials are suffering from significant fatigue and which, as always, is packed to the brim with passengers and luggage. The extreme cost-cutting measures applied to the aircraft and the omission of maintenance checks that were not strictly essential may well have been the cause of the malfunctions that are now a source of concern and regret for many. It is too late now. The only useful course of action now is to remain calm and tackle the situation with rigour, composure, intelligence and fortitude.

Although some passengers have panicked, most are still keeping their cool. In fact, the situation appears to be under the crew’s control, and although some warning lights are still on, the aircraft’s vital systems are continuing to function correctly. The atmosphere in the cabin is tense because the alerts have been coming on one after another and, although the situation is currently well under control, nobody knows which warning light might start flashing at any moment. These are a series of malfunctions that have occurred in quick succession; some are insignificant, whilst others require the pilots’ calm but constant attention. One thing is clear: the aircraft is experiencing problems and must be diverted from its original route. Although some reckless passengers remain determined to reach their destination at the scheduled time so as not to lose a single minute of an all-inclusive holiday they will be paying for in convenient instalments. But the reality is very different.

The pilots have already adjusted the heading, speed and altitude by making technical adjustments to the aircraft and managing its mechanical resources efficiently, so as not to dangerously overload the systems that are still functioning without any problems. Using the systems the aircraft still has, they will attempt to reach the nearest airport where they can land and carry out a thorough technical inspection. If they succeed, let us hope that this time the airline will insist on all the necessary replacement parts and make the financial commitment it failed to make when it should have. Even if this new policy means a rise in prices and some of its current customers have to stop flying so often.

With a closer destination, at a lower altitude and speed, they hope to avoid any mishap and ensure that the passengers can disembark from the aircraft without suffering any harm other than the inconvenience inherent in having to radically alter everyone’s plans. But to achieve this, they must maintain a calm and methodical approach; the crew must act with rigour and professionalism; and they must hope that no further faults occur that could affect the vital systems of the old and overworked aircraft.

The company failed to do its homework at the time and lacked the financial rigour required to maintain the aircraft; passengers spent the money they’d saved by flying on a low-cost airline on fleeting indulgences and exceeded their baggage weight limits; one flight attendant even abandoned her duties in the midst of the crisis to scream hysterically, hindering the work of the other responsible passengers. Let us hope that the majority continue to do the right thing and that the passengers only have to abandon their original plans. They will have to adapt to a radical change of course involving a forced stopover, with all its many inconveniences and financial losses. Although let us hope that this is merely an unpleasant change of plans and that we manage to save what is truly important.

As we said at the start, although it may go without saying, it is important to note that we are now at the end of the US trading day on Friday 14 September 2007. We will continue to capitalise on the opportunities that arise in any crisis, adapting as best we can to the new circumstances and trying to turn the situation around without seriously damaging the vital systems of our economy.

A couple of weeks ago, I told you about Buffett and his elephant hunting. Today I’m going to talk to you about some others animals which receive less favourable press coverage, but are no less important or necessary in the food chain of the Economic System: The Scavengers.

These are the companies and executives who take advantage of other companies’ moments of uncertainty – and even distress – to make opportunistic acquisitions. These are undoubtedly rather unsavoury financial transactions, and some are as unethical as the laws of the market themselves. But they are necessary, just as scavengers play a prominent role in the food chain, or scavengers.

A company in genuine difficulty or already bankrupt must be utilised appropriately by others. Its assets, human resources, tangible fixed assets, goodwill, etc. – everything must be recycled for the good of the ecosystem. Takeovers and acquisitions of valuable parts of what was once (perhaps just yesterday) a romantic, generational corporate adventure form part of Darwinian natural selection. Life and death in the jungle That’s how it is.

As early as July, the first blatantly obvious investment opportunities began to appear scavengers, such as the Distressed Subprime Fund Marathon.

Today we can see plenty of examples of scavengers having a field day, although some prefer to call themselves sharks: Blackstone, Citadel or Deutsche Bank itself. But not all of them are simply scavengers with the the ability to turn a crisis into an opportunity but amongst them we also find illustrious visionaries such as Passport Capital LLC, which was already unwinding its subprime positions before the summer, thereby securing substantial capital gains and earning the recognition and admiration of its competitors.

Elephant hunters, scavengers, sharks, scavengers… It doesn’t matter who they are or what we call them; they form a vital part of the food chain. So vital, in fact, that I would say they contribute more than almost anyone else to the sustainability of the economic system, or rather, Ecosystem. I have the utmost respect for all of them, as they are the best antidote to the effects of the panic and hysteria displayed by some.

There’s been talk for a few days now about the Bin Laden Options, that is to say, options that have allegedly been bought up on a massive scale and which would generate astronomical profits should the US markets crash before the end of September.
I find it highly implausible that the US intelligence services would fail to detect and thwart such mass movements. If they had taken place, they would have been thoroughly investigated, just as they were a in retrospect, regarding the unusual put options on airlines taken out shortly before 9/11 in that fateful year of 2001. The outcome of that investigation was, on the one hand, the investor in question providing a valid justification as a hedge for other open positions; and on the other hand, a recommendation from a stock market magazine that led to another significant purchase shortly before the attacks. Everything was thoroughly traced, investigated and clarified in hindsight. Given this background, it seems implausible that large-scale operations could be carried out by the masterminds behind potential attacks in the coming days of September without the knowledge and subsequent reaction of the FBI or the SEC.

It is another matter entirely if an investor chooses to bet on a fall in the indices in the days leading up to 9/11. Obviously, that is an option like any other, and there are bound to be many such positions in the market at present. But any that are particularly significant will undoubtedly be monitored and investigated.

However, no one should be under any illusion that we are currently facing the most difficult period in our global economic system—I would go so far as to say, since 1929. In a scenario such as the present one, a potential attack on the scale of that of six years ago would cause serious damage to the confidence and investments of most of the world. Undoubtedly, the current credit crisis, combined with an attack of enormous proportions, would send shockwaves through the very foundations of our global economy. Panic would only serve to amplify this, although I am convinced that things would eventually return to normal sooner or later.

For all these reasons, I would like to explain my personal view of the situation:
1. It is true that we could see a large-scale attack or attempted attack around 11 September. If, for a moment, we put ourselves in the shoes of an Islamic fundamentalist fighting to bring down the American enemy and its financial system, we would, if we could, take advantage of the current credit crisis in the system to try to cause as much damage as possible at the worst possible moment.
2.- If, unfortunately, this were to happen, it would present another golden opportunity for our investments. After all, what would truly be unthinkable is the possibility that the global economic system might collapse irrevocably, giving way to who knows what.

Personally, I have always been convinced that Bin Laden died buried beneath one of his caves or as a result of a cluster bomb during the war in Afghanistan. Let’s not forget that he used to treat us to a new provocative video every week until one fine day he decided to stop making short films. Since then, we’ve had nothing but the odd audio tape of appalling quality, featuring a voice that could belong to any of his heirs. Perhaps his camera battery ran out and he never found a power socket again, but I prefer to think he simply died. However, a French newspaper reported his possible death from typhus in Pakistan over a year ago. The uncertainty of not finding the body and a strategic decision by the CIA have deliberately kept his image alive for some indecipherable purpose.

In any case, if – as is to be expected – there are no major terrorist incidents on a global scale in the coming days, we will continue to make the most of the current opportunities and try to slowly heal the wounds caused by the threat of credit crunch. And if, unfortunately, we were to suffer a global attack, some would panic whilst others would carry on elephant hunting, as always. Whatever happens, we must invest responsibly, as hysterical speculation can damage the system even more than the bombs themselves.

Charles Ponzi, Parma (Italy) 1877–1949. He was famous for what is known as the Ponzi scheme, which was nothing more than a large-scale scam caused by a shortage of postal coupons that he was brokering from Spain to the US, where he had been living since 1903 as just another emigrant. He received these coupons via Italy through an arbitrage scheme that generated a staggering profit of 600%. He offered family and friends the chance to join the scheme with a 45% return over 90 days, but was soon overwhelmed by demand. The whole of Boston wanted to get involved in the «Ponzi scheme», and he received requests for as many as 200 million coupons. Faced with an avalanche of demand that made it physically impossible to cover the returns with the corresponding coupons, Ponzi decided to pay investors’ interest using the new daily contributions he received. A pyramid scheme with disastrous consequences had been created, which led to his imprisonment and brought his fleeting opulence to an end within a few years. In fact, he died in a charity hospital in Rio de Janeiro, in utter poverty, at the age of 72.

Is credit abuse comparable to its securitisation Is the current situation comparable to a Ponzi scheme? In a way, we could say so. At the very least, the increase in demand for credit that our economic system has experienced in recent years can be extrapolated. But there is no doubt that the main responsibility is widely shared: it lies with the financos They securitised everything that could be securitised and more; the investors who leveraged beyond belief, with and without, are also in the same boat. carry trade, the blame lies with the credit rating agencies which, whether in good or bad faith, did a very poor job, and the list could go on until it offends more than a few people. In any case, we must acknowledge a certain Minsky Moment, as is quite rightly pointed out by Gurusblog, which has excessively increased Ponzi-style lending.

Although what Ponzi did in his day was a massive scam that ruined thousands of people, perhaps we shouldn’t demonise the Ponzi scheme, because let’s not forget that our National Insurance system practises it with malice aforethought and with no other option to meet its obligations. That said, it is worth noting that in future the pension system may not be sustainable due to increasing life expectancy. If we were truly supportive and politically correct, we should die at the age of 70 to preserve the system. If Ponzi were to rise from the dead…

Monday 27 August 2007 – it has now been a couple of weeks since the major tremors in what has come to be known as crisis subprime. To date, mere aftershocks of the crisis, high volatility, erratic stock markets and various news stories along the same lines: «It is still too early to gauge the extent of the mortgage crisis», «We need to monitor how the markets develop», etc. Obvious truths framed within a moderate pessimism which, in my opinion, reflects the actual situation quite accurately. Of course, I won’t even go so far as to comment on the sensationalist voices seeking the limelight in the very style of a aquihaytomate financial, which has been very well described Rebuzner.

I believe that in the coming days we may see further sudden shocks to the financial system, and I am not referring solely to the stock market. Just when public opinion and the markets have become accustomed to the new situation, and it has been given a name that is more or less accepted by experts and laypeople alike, and it seems we can let our guard down or relax the state of alert we have been in over the last few weeks, a new shock usually strikes. Perhaps this won’t be the case and we’ll continue to heal, very slowly, the wounds caused by this globalised credit crisis, but I fear we may once again see situations that put the world’s central banks under renewed strain.

By this I do not mean to suggest that we are heading towards a chaotic or uncontrolled situation that exceeds the system’s capacity, in the very style of the sensationalist media outlets mentioned – not at all. It is simply that, in times of difficulty which are likely to drag on, it seems as though the bad news is being doled out naturally so that the entire global financial system can gradually come to terms with it. In this scenario, just as we begin to come to terms with the new realities and relax the muscles that were tensed by our reactions whilst reading the economic news, we must be prepared for further shocks. I do not know whether this is a universal law that regulates our capacity to cope with adversity or mere coincidence, but in the aftermath of a financial crisis such as the one we experienced this August, it seems that: No news, bad news.

It is possible that the sporadic fluctuations we may experience over the coming days are nothing more than minor aftershocks of the initial earthquake, and therefore we should not envisage a scenario different from the one we have already accepted globally. It is even possible that we will not experience any significant aftershocks at all, and that the credit crisis will gradually but orderly subside throughout our system. But precisely in order to avoid unnecessary and dangerous panic, we must be prepared for some unpleasant surprises in the coming days. And rather than whingeing or proclaiming the end of the world through the media, let us continue to adjust our scenarios as necessary and seek out and find excellent investment opportunities. Bad news, good opportunities.

It’s been almost 4 months since Warren Buffett he went out hunting. He’s always liked to boast that his company has more money than investment opportunities. Personally, I reckon he proclaimed loud and clear that he was off on a big-game hunt to show off by bagging an elephant, rather than just chasing a partridge, as other hunters do. Instead of to sheathe Dressed in classic camouflage, he fired into the air in late April as soon as he left the house. In all likelihood, he did so as a lure for some domesticated pachyderm eager to be shot by such an illustrious hunter. For some animals raised in captivity, it is a real honour (and a business opportunity) to feature in the trophy room of Berkshire.

Once again Buffett has created his own Good luck and is in the right place at the right time with the pencil case to the brim. That’s right, right before his eyes has appeared a magnificent wild elephant that had no intention of being hunted, but which circumstances have forced into the crosshairs of Buffett. It’s called Nationwide and has meant that, at the age of 76, the old hunter still has the same sparkle in his eyes as when he shot M&T; Bank o Wells Fargo, all of which belong to the same sector.

This subprime-crunch The situation we are currently experiencing will ruin many, but it also presents a historic opportunity for those who know how to seize it, whilst others flee in terror and panic towards the refuge of a triple-A sovereign rating, even if it is at the cost of a yield derisory.

The Master Warren Buffett, once again, it shows the way forward. It is the most responsible and interesting of the options. If Nationwide It is a valid option, but investments in fixed-income securities not linked to mortgages are just as valid, if not more so subprime, from both non-financial and financial sectors. We currently have A-rated corporate debt and AA well below par, even below 90, with yields more than just interesting. In other words, genuine opportunities in the fixed-income market that are visible only to a select few with foresight.

Unfortunately, most average investors continue to focus solely on stock market indices. They even use the equity market as a yardstick to gauge the severity of the current credit crisis. Fortunately, however, the Economy with a capital ‘E’ is not just the stock market, but much more besides. The state of the economic system may worsen or improve with little regard to what happens to the indices of the DJ, DAX o FTSE. There is no doubt that these markets will ultimately reflect the System’s true state of health, but focusing solely on them It’s like watching the faces in the crowd instead of watching the match.

Anyway, as he says Rebuzner in his latest post, these days it’s all the rage to talk about chaos and stars widespread. Meanwhile, other Masters are going about their business, which, once again, benefits us all.