sovereign wealth fund

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pages: 247 words: 68,918

The End of the Free Market: Who Wins the War Between States and Corporations? by Ian Bremmer

"World Economic Forum" Davos, affirmative action, Asian financial crisis, banking crisis, Berlin Wall, BRICs, British Empire, centre right, collective bargaining, corporate governance, creative destruction, credit crunch, Credit Default Swap, cuban missile crisis, Deng Xiaoping, diversified portfolio, Doha Development Round, Exxon Valdez, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, Glass-Steagall Act, global reserve currency, global supply chain, household responsibility system, invisible hand, joint-stock company, Joseph Schumpeter, Kickstarter, laissez-faire capitalism, low skilled workers, mass immigration, means of production, megacity, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, Naomi Klein, Nelson Mandela, new economy, offshore financial centre, open economy, race to the bottom, reserve currency, risk tolerance, Savings and loan crisis, shareholder value, Shenzhen special economic zone , South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, trade route, tulip mania, uranium enrichment, Washington Consensus, Yom Kippur War, zero-sum game

The Organisation for Economic Co-operation and Development (OECD) Nuclear Energy Agency and the International Atomic Energy Agency estimated in 2007 that, given known reserves and forecast consumption rates, the global supply of uranium should last for another century, significantly longer than most credible estimates for oil and gas. 24 Credit for coining the term sovereign wealth fund goes to Andrew Rozanov of State Street Global Advisors in his article “Who Controls the Wealth of Nations?” Central Banking Journal 15, no. 4 (Nov. 2005), 52-57. 25 “Fund Rankings,” Sovereign Wealth Fund Institute, http://www.swfinstitute.org/funds.php. 26 The major SWF transparency index seems to bear this out. The Sovereign Wealth Fund Institute ranks SWFs according to the Linaberg-Maduell Transparency Index. Other evidence of the link between government and SWF transparency (or lack thereof) is in Edwin M. Truman’s Sovereign Wealth Funds: The Need for Greater Transparency and Accountability, a policy brief for the Peterson Institute of International Economics, Washington, D.C., Aug. 2007. 27 According to the Sovereign Wealth Fund Institute and International Financial Services London, which follow the SWF world on a detailed and daily basis. 28 Emily Thornton and Stanley Reed, “Inside the Abu Dhabi Investment Authority,” BusinessWeek, June 6, 2008, http://www.businessweek.com/globalbiz/content/jun2008/gb2008065_742165.htm. 29 ADIA bought 10 percent of Apollo Management and 20 percent of Ares Management in mid-2007.

But several independent sources have constructed estimates based on available evidence, and we do know that some funds took heavy losses by providing international banks with tens of billions of dollars in capital before the extent of the banking crisis became clear.31 The table on page 76 provides a snapshot of the relative size of the largest sovereign wealth funds in March 2009. The numbers are based mainly on figures gathered by the Sovereign Wealth Fund Institute, Sovereign Wealth Funds News (sovereignwealthfundsnews. com), and International Financial Services London Research. For SWFs valued at more than $100 billion, the lower range reflects relatively skeptical estimates from Deutsche Bank, Morgan Stanley, the Council on Foreign Relations, the Peter G.

Rousseff, Dilma Royal Dutch Shell Rozanov, Andrew Rudd, Kevin Russia banks of budget deficit of economic crisis in economic reform in Georgia’s war with IPR violations by liberalization of mercantilism in and national security of democracies oligarchs in resource exporting and resource nationalism by sovereign wealth funds in state-owned enterprises in trade by Ukraine and see also Gazprom; Soviet Union Russia Petroleum Sadat, Anwar Sakhalin 2 project Samsung Sanabil Al Saudia Sarkozy, Nicolas Saud, Abdullah bin Abdul Aziz al- Saudi Arabia Saudi Arabia Investment Authority Saudi Arabian Monetary Agency (SAMA) Saudi Aramco Saudi Basic Industries Corporation (SABIC) savings-and-loan crisis Scandinavia Schengen agreement Schumpeter, Joseph Sechin, Igor September 11, 2001, terrorist attacks of Serra, José shadow banking system Shanghai Automotive Industry Corporation Shaw, George Bernard Shell Sichuan, China Singapore Singapore Government Investment Corporation (GIC) Singh, Manmohan Sinopec (China Petroleum and Chemical Corporation) slavery Smith, Adam Smoot-Hawley Tariff Act (1930) Sonatrach Sony Sourcefire South Africa South African Trade Unions South Korea South Sea Company Sovereign Wealth Fund Institute sovereign wealth funds (SWFs) Soviet Union collapse of creation of see also Russia Spain Stalin, Joseph State Administration of Foreign Exchange (SAFE) state capitalism and fast-emerging markets free-market vs. greatest threat to mercantilism and and oil protectionism by and resource nationalism threats of see also companies, state-owned; national oil and gas corporations; sovereign wealth funds State Council State Department, U.S. State Grid Corporation state-owned enterprises (SOEs), see companies, state-owned StatoilHydro steel Stephens, Philip Stern, Roger stock market crash (1929) Stone, Sharon Strzhalkovsky, Vladimir Sudan Suharto Sultan, Crown Prince Sumitomo Sweden Switzerland Taiwan Taiwan Semiconductors tariffs Tata Group taxation Temasek terrorism text messaging Thailand Thatcher, Margaret Theory of Moral Sentiments, The (Smith) Thiam, Mahmoud Tiananmen Square Tibet Tonghua Iron & Steel Total Toyota trade balance of by China, see China, trade by see also protectionism Treasury Department, U.S.


Investment: A History by Norton Reamer, Jesse Downing

activist fund / activist shareholder / activist investor, Alan Greenspan, Albert Einstein, algorithmic trading, asset allocation, backtesting, banking crisis, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, book value, break the buck, Brownian motion, business cycle, buttonwood tree, buy and hold, California gold rush, capital asset pricing model, Carmen Reinhart, carried interest, colonial rule, Cornelius Vanderbilt, credit crunch, Credit Default Swap, Daniel Kahneman / Amos Tversky, debt deflation, discounted cash flows, diversified portfolio, dogs of the Dow, equity premium, estate planning, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, family office, Fellow of the Royal Society, financial innovation, fixed income, flying shuttle, Glass-Steagall Act, Gordon Gekko, Henri Poincaré, Henry Singleton, high net worth, impact investing, index fund, information asymmetry, interest rate swap, invention of the telegraph, James Hargreaves, James Watt: steam engine, John Bogle, joint-stock company, Kenneth Rogoff, labor-force participation, land tenure, London Interbank Offered Rate, Long Term Capital Management, loss aversion, Louis Bachelier, low interest rates, managed futures, margin call, means of production, Menlo Park, merger arbitrage, Michael Milken, money market fund, moral hazard, mortgage debt, Myron Scholes, negative equity, Network effects, new economy, Nick Leeson, Own Your Own Home, Paul Samuelson, pension reform, Performance of Mutual Funds in the Period, Ponzi scheme, Post-Keynesian economics, price mechanism, principal–agent problem, profit maximization, proprietary trading, quantitative easing, RAND corporation, random walk, Renaissance Technologies, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Sand Hill Road, Savings and loan crisis, seminal paper, Sharpe ratio, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spinning jenny, statistical arbitrage, survivorship bias, tail risk, technology bubble, Teledyne, The Wealth of Nations by Adam Smith, time value of money, tontine, too big to fail, transaction costs, two and twenty, underbanked, Vanguard fund, working poor, yield curve

., “The Brave New World of Sovereign Wealth Funds,” Lauder Institute of Management & International Studies, University of Pennsylvania, 2010, http://d1c25a6gwz7q5e .cloudfront.net/papers/download/052810_Lauder_Sovereign_Wealth _Fund_report_2010.pdf, 1n2. Sovereign Wealth Fund Institute, “Sovereign Wealth Funds Make Up More than 25% of U.S. Retirement Assets,” March 27, 2014, http:// www.swfinstitute.org/swf-article/sovereign-wealth-funds-make -up-more-than-25-of-u-s-retirement-assets. Afyonoglu et al., “Brave New World,” 10. Ashby H. B. Monk, “Is CalPERS a Sovereign Wealth Fund?” (working paper 8-21, Center for Retirement Research, Boston College, Boston, MA, 4.

The remaining 10 percent comes from community foundations, which are charities that draw funds from a wide array of different donors.23 While the sources of foundation assets often originate from single wealthy donors, families, or corporations, their capital deployment strategies have contributed to the overall trend of democratization. Sovereign Wealth Funds The amount of attention sovereign wealth funds have received from the public in recent years is remarkable. Despite their size, sovereign wealth funds as a class of investment tended to fly below the radar of the public until 2007. Indeed, the term sovereign wealth fund was not even in modern parlance until about 2005, when Andrew Rozanov first used it in his article “Who Holds the Wealth of Nations?”24 Sovereign wealth funds are another class of capital pool central to the modern investment scene, managing a total of $6.4 trillion as of March 2014.25 Similar to endowments and foundations, sovereign wealth funds manage money for the benefit of the organization to which they are connected, the main difference being that the funds of a sovereign wealth fund belong to a nation or state rather than an institution.

24 Sovereign wealth funds are another class of capital pool central to the modern investment scene, managing a total of $6.4 trillion as of March 2014.25 Similar to endowments and foundations, sovereign wealth funds manage money for the benefit of the organization to which they are connected, the main difference being that the funds of a sovereign wealth fund belong to a nation or state rather than an institution. Their assets are derived not from donations or charitable contributions but, rather, from the sale or licensing of natural resources, excess governmental revenue, and foreign exchange reserves produced from positive trade balances. Like endowments, sovereign wealth funds help manage money over time in two fundamental ways. In the short term, sovereign wealth funds serve as a buffer; when there is a shock in revenues or costs, the sovereign wealth fund can be drawn upon to normalize the budgeting process.


pages: 354 words: 110,570

Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World by Tom Wright, Bradley Hope

"World Economic Forum" Davos, Asian financial crisis, Bear Stearns, Bernie Madoff, Boeing 747, collapse of Lehman Brothers, colonial rule, corporate social responsibility, Credit Default Swap, Donald Trump, failed state, family office, financial engineering, forensic accounting, Frank Gehry, Global Witness, high net worth, junk bonds, low interest rates, Michael Milken, middle-income trap, Nick Leeson, offshore financial centre, Oscar Wyatt, Ponzi scheme, Right to Buy, risk tolerance, Savings and loan crisis, Snapchat, South China Sea, sovereign wealth fund, Virgin Galactic

Low could see how Al Mubarak, only in his late twenties and a smooth talker, was in a position of considerable power, with control over big chunks of Abu Dhabi’s economy. Mubadala was part of a trend in which rich states were playing a greater role in the global economy. Sovereign wealth funds had been around since the 1950s, when Saudi Arabia and Kuwait set up entities to find ways to invest their oil wealth with a long-term outlook. Other examples followed, from Norway’s Government Pension Fund to the Abu Dhabi Investment Authority, the emirate’s main wealth fund. By Low’s visit, sovereign wealth funds controlled $3.5 trillion in assets, larger than the annual GDP of most Western nations. But Mubadala was novel: Rather than simply invest oil profits, securing them for future generations, the fund was borrowing from global markets and actively trying to move the economy in new directions.

Low was becoming adept at obtaining meetings with powerful figures, putting himself in the room even though he had no track record. Later that year, he heard Khazanah, Malaysia’s powerful sovereign wealth fund, was looking for partners to develop a gigantic construction project in the southern state of Johor, near the border with Singapore, to be known as the Iskandar Development Region. The project was an ambitious effort to create a financial and lifestyle center to rival wealthier Singapore, Southeast Asia’s financial and commercial hub. Here was Low’s chance. In Abu Dhabi, Low had observed firsthand the huge amounts of money that sovereign wealth funds control, and he saw an opportunity to broker a deal. Since Low’s Middle East tour, Khaldoon Al Mubarak, the chief executive of Mubadala, had grown in prestige.

Low had observed the power and status of Khaldoon Al Mubarak of Mubadala, who ran the emirati soverign wealth fund. A fund like that had billions of dollars in investments, not mere millions. Why, Jho Low wondered, couldn’t he put together a sovereign wealth fund of his own—one based in Malaysia? But where could he find the initial funds? Traditional sovereign wealth funds invest oil profits, and so Low honed in on the Malaysian state of Terengganu, which was rich in offshore oil and gas fields. Malaysia’s nine hereditary Malay royal families, each ruling a different state, coexisted with the nation’s elected officials.


pages: 504 words: 126,835

The Innovation Illusion: How So Little Is Created by So Many Working So Hard by Fredrik Erixon, Bjorn Weigel

Airbnb, Alan Greenspan, Albert Einstein, American ideology, asset allocation, autonomous vehicles, barriers to entry, Basel III, Bernie Madoff, bitcoin, Black Swan, blockchain, Blue Ocean Strategy, BRICs, Burning Man, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, classic study, Clayton Christensen, Colonization of Mars, commoditize, commodity super cycle, corporate governance, corporate social responsibility, creative destruction, crony capitalism, dark matter, David Graeber, David Ricardo: comparative advantage, discounted cash flows, distributed ledger, Donald Trump, Dr. Strangelove, driverless car, Elon Musk, Erik Brynjolfsson, Fairchild Semiconductor, fear of failure, financial engineering, first square of the chessboard / second half of the chessboard, Francis Fukuyama: the end of history, general purpose technology, George Gilder, global supply chain, global value chain, Google Glasses, Google X / Alphabet X, Gordon Gekko, Greenspan put, Herman Kahn, high net worth, hiring and firing, hockey-stick growth, Hyman Minsky, income inequality, income per capita, index fund, industrial robot, Internet of things, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, Just-in-time delivery, Kevin Kelly, knowledge economy, laissez-faire capitalism, low interest rates, Lyft, manufacturing employment, Mark Zuckerberg, market design, Martin Wolf, mass affluent, means of production, middle-income trap, Mont Pelerin Society, Network effects, new economy, offshore financial centre, pensions crisis, Peter Thiel, Potemkin village, precautionary principle, price mechanism, principal–agent problem, Productivity paradox, QWERTY keyboard, RAND corporation, Ray Kurzweil, rent-seeking, risk tolerance, risk/return, Robert Gordon, Robert Solow, Ronald Coase, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, Silicon Valley, Silicon Valley startup, Skype, sovereign wealth fund, Steve Ballmer, Steve Jobs, Steve Wozniak, subprime mortgage crisis, technological determinism, technological singularity, TED Talk, telemarketer, The Chicago School, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, transaction costs, transportation-network company, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, University of East Anglia, unpaid internship, Vanguard fund, vertical integration, Yogi Berra

Firms cannot retain a large part of their earnings and use them for long-term investment but are at the mercy of an external capital market that has shrunk its interest in long-term value generation and stays eager to make sure that the firms play the numbers game. Sovereign wealth funds and the socialization of private companies A new kid on the corporate block is the sovereign wealth fund (SWF). Clearly, such funds are the first choice for some governments when allocating excess earnings, such as revenues from oil and other natural resources, and they have grown to be influential actors in the modern corporate world. Their influence is actually now so large that the SWFs constitute the greatest socialization of corporate assets in the West since that of Central and Eastern European economies after World War II.

Almost twice the size of the country’s GDP, Norway’s SWF has become the subject of heavy politicization. When its Chief Executive Officer, Yngve Slyngstad, was ranked number four in the top 100 “most significant and impactful public investor executives of 2014” by the Sovereign Wealth Fund Institute, the reason given was that, “faced with pressure from NGOs, politicians and think thanks, the sovereign wealth fund has tried its best to take a logical approach to investing”.27 The domestic connection between politics and SWFs is strong: there is a symbiotic relation between them in the ownership and management of hydrocarbon reserves. Take Norway again.

National Bureau of Economic Research, Apr. 2000. Karabarbounis, Loukas, and Brent Neiman, “The Global Decline of the Labor Share.” NBER Working Paper No. 19136. National Bureau of Economic Research, June 2013. Karaian, Jason, “Norway’s Gargantuan Sovereign Wealth Fund, by the Numbers.” Quartz, Aug. 21, 2014. At http://qz.com/252753/norways-gargantuan-sovereign-wealth-fund-by-the-numbers/. Kay, John, “Miracles of Productivity Hidden in the Modern Home.” Financial Times, Aug. 11, 2015. At http://www.ft.com/intl/cms/s/0/a44d0a56-4009-11e5-b98b-87c7270955cf.html?siteedition=intl#axzz3ode29Nn5. Kay, John A., Other People’s Money: The Real Business of Finance.


pages: 443 words: 98,113

The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay by Guy Standing

"World Economic Forum" Davos, 3D printing, Airbnb, Alan Greenspan, Albert Einstein, Amazon Mechanical Turk, anti-fragile, Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Bernie Sanders, Big bang: deregulation of the City of London, Big Tech, bilateral investment treaty, Bonfire of the Vanities, Boris Johnson, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, cashless society, central bank independence, centre right, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, commons-based peer production, credit crunch, crony capitalism, cross-border payments, crowdsourcing, debt deflation, declining real wages, deindustrialization, disruptive innovation, Doha Development Round, Donald Trump, Double Irish / Dutch Sandwich, ending welfare as we know it, eurozone crisis, Evgeny Morozov, falling living standards, financial deregulation, financial innovation, Firefox, first-past-the-post, future of work, Garrett Hardin, gentrification, gig economy, Goldman Sachs: Vampire Squid, Greenspan put, Growth in a Time of Debt, housing crisis, income inequality, independent contractor, information retrieval, intangible asset, invention of the steam engine, investor state dispute settlement, it's over 9,000, James Watt: steam engine, Jeremy Corbyn, job automation, John Maynard Keynes: technological unemployment, labour market flexibility, light touch regulation, Long Term Capital Management, low interest rates, lump of labour, Lyft, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, means of production, megaproject, mini-job, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, Neil Kinnock, non-tariff barriers, North Sea oil, Northern Rock, nudge unit, Occupy movement, offshore financial centre, oil shale / tar sands, open economy, openstreetmap, patent troll, payday loans, peer-to-peer lending, Phillips curve, plutocrats, Ponzi scheme, precariat, quantitative easing, remote working, rent control, rent-seeking, ride hailing / ride sharing, Right to Buy, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Altman, savings glut, Second Machine Age, secular stagnation, sharing economy, Silicon Valley, Silicon Valley startup, Simon Kuznets, SoftBank, sovereign wealth fund, Stephen Hawking, Steve Ballmer, structural adjustment programs, TaskRabbit, The Chicago School, The Future of Employment, the payments system, The Rise and Fall of American Growth, Thomas Malthus, Thorstein Veblen, too big to fail, Tragedy of the Commons, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, Y Combinator, zero-sum game, Zipcar

When sweating spreads to taskers, the threat to wages and working conditions of those outside the precariat grows. Wages will fall drastically unless a countervailing strategy is implemented. BUILD DEMOCRATIC SOVEREIGN WEALTH FUNDS Now we come to the first of two pillars for a new distribution system that would also help achieve the ‘euthanasia of the rentier’. This is the sovereign wealth fund, a national fund built up from the proceeds of economic activity, which is ideal for pooling and redistributing rental income. Such funds have a long pedigree, although most have been captured and distorted by elites, so far.

But there is no moral justification for using public money to boost the incomes of bankers and other financiers, especially as the mess was largely due to their negligence and rapaciousness. Instead of taking a temporary stake in failing banks and then selling them once profitable, governments could have enabled a sovereign wealth fund to take permanent stakes, with the returns going to the fund for the benefit of the public. If any institution is deemed too big to fail, the implicit moral hazards justify a substantial public stake. Tony Atkinson has advocated a sovereign wealth fund that would increase the net worth of the state by taking stakes in companies and property. This would not amount to nationalisation, but would derive a public benefit from minority shareholdings in high-tech, financial and resource-intensive sectors.

This would not amount to nationalisation, but would derive a public benefit from minority shareholdings in high-tech, financial and resource-intensive sectors. In addition, most subsidies covered in Chapter 3 should be ended, with some of the money freed up going into the sovereign wealth fund. Another source of funding should come via monetary policy. Quantitative easing channelled billions into financial markets, to relatively little positive effect. Had the money been directed into sovereign wealth funds, they could have been effective vehicles for redistributive and growth purposes. There is one vital extra dimension. Fund governance should be transparent and democratic, with an independent board and clear terms of reference.


pages: 561 words: 87,892

Losing Control: The Emerging Threats to Western Prosperity by Stephen D. King

"World Economic Forum" Davos, Admiral Zheng, Alan Greenspan, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, BRICs, British Empire, business cycle, capital controls, Celtic Tiger, central bank independence, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, demographic dividend, demographic transition, Deng Xiaoping, Diane Coyle, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, foreign exchange controls, Francis Fukuyama: the end of history, full employment, G4S, George Akerlof, German hyperinflation, Gini coefficient, Great Leap Forward, guns versus butter model, hiring and firing, income inequality, income per capita, inflation targeting, invisible hand, Isaac Newton, junk bonds, knowledge economy, labour market flexibility, labour mobility, liberal capitalism, low interest rates, low skilled workers, market clearing, Martin Wolf, mass immigration, Meghnad Desai, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, old age dependency ratio, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, Savings and loan crisis, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, We are all Keynesians now, women in the workforce, working-age population, Y2K, Yom Kippur War

The lack of trust extends far beyond any specific issues with regard to sovereign wealth funds. If sovereign wealth funds merely hold non-controlling shares in a range of developed-world companies, it’s difficult to know why anyone should be overly worried. Moreover, to the extent that all companies have to abide by the laws and regulations of the land, ownership alone is not enough to provide a threat to national security. At the extreme, the assets of a sovereign wealth fund that decided to flex its financial muscles in an undesirable way from the host country’s perspective could always be seized. Sovereign wealth funds have to tread carefully.

As these reserves have multiplied, however, the desire to diversify into a wider range of assets has increased enormously. To diversify in this way, more and more nations have resorted to the creation of sovereign wealth funds.1 While sovereign wealth funds have undoubtedly received the lion’s share of media attention, the rise in state capitalism is not just a question of the ownership of assets, whether through sovereign wealth funds or other investment vehicles. State capitalism is ultimately a story about economic nationalism and global power politics, especially when it comes to energy, food and logistics. The increased gravitational pull of the emerging nations is having a huge impact on relative prices across goods, labour and capital markets.

In a chance conversation with a real-estate agent who specialized in sales in Cap Ferrat, one of the most exclusive areas in the Côte d’Azur, I was reliably told, ‘The English can no longer afford properties here: it’s all Russians and Turks.’ 8. For a detailed description of the aims, objectives and risks associated with SWFs, see Sovereign Wealth Funds – A Work Agenda by the IMF, Washington DC, 29 February 2008. 9. IMF. Sovereign Wealth Funds – A Work Agenda, Washington DC, 2008. 10. All figures quoted in this section come from the BP Statistical Review of World Energy, June 2009. 11. South Stream’s competitor project, Nabucco, was favoured by the European Union but may not be able to guarantee sufficient gas supplies running through its network.


pages: 381 words: 101,559

Currency Wars: The Making of the Next Gobal Crisis by James Rickards

"World Economic Forum" Davos, Alan Greenspan, Asian financial crisis, bank run, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, borderless world, Bretton Woods, BRICs, British Empire, business climate, buy and hold, capital controls, Carmen Reinhart, Cass Sunstein, collateralized debt obligation, complexity theory, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, cross-border payments, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, deal flow, Deng Xiaoping, diversification, diversified portfolio, Dr. Strangelove, Fall of the Berlin Wall, family office, financial innovation, floating exchange rates, full employment, game design, German hyperinflation, Gini coefficient, global rebalancing, global reserve currency, Great Leap Forward, guns versus butter model, high net worth, income inequality, interest rate derivative, it's over 9,000, John Meriwether, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, Long Term Capital Management, low interest rates, mandelbrot fractal, margin call, market bubble, Mexican peso crisis / tequila crisis, Money creation, money market fund, money: store of value / unit of account / medium of exchange, Myron Scholes, Network effects, New Journalism, Nixon shock, Nixon triggered the end of the Bretton Woods system, offshore financial centre, oil shock, one-China policy, open economy, paradox of thrift, Paul Samuelson, power law, price mechanism, price stability, private sector deleveraging, proprietary trading, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, Ronald Reagan, short squeeze, sovereign wealth fund, special drawing rights, special economic zone, subprime mortgage crisis, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, time value of money, too big to fail, value at risk, vertical integration, War on Poverty, Washington Consensus, zero-sum game

Once inside, you are truly in the bubble of the military-intelligence complex. At the September meeting, there were about forty attendees in total, including a number of distinguished academics, think tank experts, intelligence officials and uniformed military. I was one of five asked to give a formal presentation that day, and my topic was sovereign wealth funds, or SWFs. Sovereign wealth funds are huge investment pools established by governments to invest their excess reserves, many with assets in the hundred-billion-dollar range or higher. The reserves are basically hard currency surpluses, mostly dollars, which governments have earned by exporting natural resources or manufactured goods.

Central banks were not well equipped to do this because they lacked the investment staff and portfolio managers needed to select stocks, commodities, private equity, real estate and hedge funds, which were the key to higher returns. So the sovereign wealth funds began to emerge to better manage these investments; the earliest SWFs were created some decades ago, but most have come into being in the past ten years, with their government sponsors giving them enormous allocations from their central bank reserves with a mandate to build diversified portfolios of investments from around the world. In their basic form, sovereign wealth funds do make economic sense. Most assets are invested professionally and contain no hidden political agenda, but this is not always the case.

During the first part of the depression that began in 2007, sovereign wealth funds were the primary source of bailout money. In late 2007 and early 2008, SWFs invested over $58 billion to prop up Citigroup, Merrill Lynch, UBS and Morgan Stanley. China was considering an additional $1 billion investment in Bear Stearns in early 2008 that was abandoned only when Bear Stearns neared collapse in March of that year. When these investments were decimated in the Panic of 2008 the U.S. government had to step in with taxpayer money to continue the bailouts. The sovereign wealth funds lost vast fortunes on these early investments, yet the stock positions and the influence that came with them remained.


pages: 241 words: 81,805

The Rise of Carry: The Dangerous Consequences of Volatility Suppression and the New Financial Order of Decaying Growth and Recurring Crisis by Tim Lee, Jamie Lee, Kevin Coldiron

active measures, Alan Greenspan, Asian financial crisis, asset-backed security, backtesting, bank run, Bear Stearns, Bernie Madoff, Bretton Woods, business cycle, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, collapse of Lehman Brothers, collateralized debt obligation, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, currency risk, debt deflation, disinformation, distributed ledger, diversification, financial engineering, financial intermediation, Flash crash, global reserve currency, implied volatility, income inequality, inflation targeting, junk bonds, labor-force participation, Long Term Capital Management, low interest rates, Lyft, margin call, market bubble, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, negative equity, Network effects, Ponzi scheme, proprietary trading, public intellectual, purchasing power parity, quantitative easing, random walk, rent-seeking, reserve currency, rising living standards, risk free rate, risk/return, sharing economy, short selling, short squeeze, sovereign wealth fund, stock buybacks, tail risk, TikTok, Uber and Lyft, uber lyft, yield curve

Given structural incentives to be long carry, it is no surprise that the last two decades have also seen a similar increase in the scale and impact of carry on global markets. Sovereign Wealth Funds Are Natural Candidates for Carry Strategies Another type of institution that has experienced significant growth in scale and influence over the last two decades is sovereign wealth funds. According to the Sovereign Wealth Fund Institute, sovereign wealth funds have AUM of approximately US$7.5 trillion, as of the end of 2018, up from only US$508 billion at the end of 1996. How likely is it that their growth has contributed to the increase in carry? In terms of liabilities, sovereign wealth funds are ideal vehicles for carry. They take many forms, but they typically share a feature of having ultralongduration liabilities.

Nor are they compensated with profit shares in the manner of hedge funds. On this criterion sovereign wealth funds do not have incentive to pursue carry trades. On balance it is likely that many sovereign wealth funds exploit their liability structure and ability to use leverage to employ carry. One could even argue that they are natural providers of insurance to the market and, because of their strong balance sheets, are much safer vehicles for carry to reside in than hedge funds. Most endowments and foundations share with sovereign wealth funds a long-duration liability profile. They typically consider themselves to be permanent institutions and operate with a view toward spending only a limited portion of their fund’s capital each year.

See quantitative easing QE3, 101, 103 quantitative easing (QE), 101, 105, 127, 136, 196, 209, 219 BOJ and, 31 real economic activity, measures of, 56 real estate booms, currency carry trades contributing to, 13 228 realized volatility, 90, 164, 167–168 anti-carry regime and, 172 implied volatility relationship to, 158 recessions, carry and consequences of, 6 recipient currencies, 10–11, 13, 65 crashes in, 23 volatility in, 215 regulatory capture, 176 rent-seeking carry as, 175–177 defining, 175 reporting horizons, 70–71 reserve balances, 109–110 resource allocation, carry regime and, 114–115 return, risk and, 99 risk carry trade profit explanations and, 48 of carry trades, 3, 5 of CDOs, 36–37 currency, 12 exchange rate, 12–13 market, 99 mispricing of, 21, 35–37, 132, 134–140, 142 return and, 99 ruin, 65, 72 selling optionality and, 153 socialization of, 136 spreading, 35 risk controls, 65 risk premium, 148, 152 portfolio volatility and, 159 roll yield, 91 rubisco, 189 ruin risk, 65, 72 sawtooth patterns, 96–97, 97f shadow banks, 137 Shin, Hyun Song, 22, 80–81 short squeezes on liquidity, 165 short-term reporting horizons, 70–71 social hierarchies, 187 social networks, 187 social realities, 184 socialization of risk, 136 South Africa, 55n6 sovereign bonds, 162 equity indexes correlation to, 161 Sovereign Wealth Fund Institute, 75 INDEX sovereign wealth funds, 75–76 growth of, 83 S&P 500, 53–55, 55n6, 56, 95 carry regime importance of, 86–87, 87f as carry trade, 160–162 equity risk trade correlation with, 99 gamma for, 154, 154f liquidity premiums for, 161 market corrections and, 79 mean reversion of, 154f, 155 quantitative easing and, 103 selling volatility on, 98 volatility of, as global volatility risk factor, 99 volatility selling in, 89–92 volatility trading on, 85, 86 S&P 500 front e-mini future, 159 stagflation, 217 stochastic discount factor, 99 stock buybacks, 82, 83f stock market crashes, of 1987, 155 stock markets carry and structures of, 7 emerging currency stability compared with, 55 performance of, 1 recessions and crashes in, 6 volatility bets in, 89 stocks, put options against, 34 stopped out, 94 structured finance, 135 subprime mortgages, 36 superstar effects, 186 Swiss franc, 29, 31, 33, 34 taxi licensing, 175 Thai baht, 25 Thailand, balance of payments current account deficit, 25 Theron, Charlize, 185 trading frequency, 74 tulip bulbs, 133 Turkey, 19, 20, 23, 39, 202 balance of payments, 45 carry bubble and bust, 42–46 consumer price index, 44 credit and claims data for, 43, 43f GDP growth, 45 interest rates, 12–13 INDEX Turkish lira, 11, 13, 20, 21, 23, 44, 55n6 carry crash of 2018 in, 45, 65 Twitter, 186 uncovered interest rate parity (UIP), 47, 48 United States capital flows into, 18 carry trade funding and, 17–20 current account deficit, 17 personal net worth in, 137, 138f savings rates, 18, 19 US Federal Reserve, 14, 26 balance sheet of, 101–102 carry crashes limited by, 127 carry regimes and, 107, 208 carry trades by, 103 creation of, 218 interest rates and, 14, 137, 208 liquidity swaps by, 104–105, 196–198 quantitative easing and, 101, 105 US household financial assets, 117–120, 117f–120f valuation metrics, 204 vanishing point, 116, 195, 209–210 variance, 94 VIX, 85, 95, 99 forward curve average, 92, 92f money value and, 100, 122 shorting, 96 spikes in, 98 VIX futures, 90–92 selling volatility using, 156, 158 shorting, 148, 157 VIX futures rolldown, 59, 96 VIX index, 53n5 volatility, 3 currency, 62 currency carry trade collapse signs from, 215 direct bets on, 89 equilibrium structure of premiums for, 156–160, 157f equity, 59 financial crises and spikes in, 52 in funding currencies, 215 global, 99, 101 implied, 57, 90 market making as premium for, 158–159 229 negatively priced liquidity and, 166 optionality and, 93–95 options and, 146–148 portfolio, 159 realized, 90 in recipient currencies, 215 selling, as short position, 156 selling, by receiving implied and paying realized, 148–150 selling, by receiving realized and paying realized, 151–156 short, 4 signs of carry regime ending and, 214–218 spikes in, 98 time horizons of, 152, 153f, 154, 154f value of money and, 98–101, 122 of volatility, 90 volatility carry, 86 volatility selling, 86, 96 central banks and, 101–105 in S&P 500, 89–92 volatility shock, 161 volatility-selling trades, 33–35, 57, 69 Volcker Rule, 77 Volmageddon, 98, 161 VXO index, 53, 53n5, 54, 55n6, 90n2 VXX, 92 wealth distribution, carry and, 2 wealth inequality, central bank stabilization actions and, 6 “What Explains the Persistence of Global Imbalances?”


pages: 935 words: 267,358

Capital in the Twenty-First Century by Thomas Piketty

accounting loophole / creative accounting, Asian financial crisis, banking crisis, banks create money, Berlin Wall, book value, Branko Milanovic, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, central bank independence, centre right, circulation of elites, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation coefficient, David Ricardo: comparative advantage, demographic transition, distributed generation, diversification, diversified portfolio, European colonialism, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, Future Shock, German hyperinflation, Gini coefficient, Great Leap Forward, high net worth, Honoré de Balzac, immigration reform, income inequality, income per capita, index card, inflation targeting, informal economy, invention of the steam engine, invisible hand, joint-stock company, Joseph Schumpeter, Kenneth Arrow, low interest rates, market bubble, means of production, meritocracy, Money creation, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, open economy, Paul Samuelson, pension reform, power law, purchasing power parity, race to the bottom, randomized controlled trial, refrigerator car, regulatory arbitrage, rent control, rent-seeking, Robert Gordon, Robert Solow, Ronald Reagan, Simon Kuznets, sovereign wealth fund, Steve Jobs, Suez canal 1869, Suez crisis 1956, The Nature of the Firm, the payments system, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade liberalization, twin studies, very high income, Vilfredo Pareto, We are the 99%, zero-sum game

A progressive tax on capital is a much more appropriate policy in terms of both democratic transparency and real efficacy. The Return on Sovereign Wealth Funds: Capital and Politics Consider now the case of sovereign wealth funds, which have grown substantially in recent years, particularly in the petroleum exporting countries. Unfortunately, there is much less publicly available data concerning the investment strategies and returns obtained by sovereign wealth funds than there is for university endowments, and this is all the more unfortunate in that the financial stakes are much, much larger. The Norwegian sovereign wealth fund, which alone was worth more than 700 billion euros in 2013 (twice as much as all US university endowments combined), publishes the most detailed financial reports.

This was already the case in the colonial era, when the great powers of the day, Britain and France foremost among them, were quick to roll out the cannon to protect their investments. Clearly, the same will be true in the twenty-first century, in a tense new global political configuration whose contours are difficult to predict in advance. Will Sovereign Wealth Funds Own the World? How much richer can the sovereign wealth funds become in the decades ahead? According to available (and notoriously imperfect) estimates, sovereign wealth funds in 2013 had total investments worth a little over $5.3 trillion, of which about $3.2 trillion belongs to the funds of petroleum exporting states (including, in addition to those mentioned above, the smaller funds of Dubai, Libya, Kazakhstan, Algeria, Iran, Azerbaijan, Brunei, Oman, and many others), and approximately $2.1 trillion to funds of nonpetroleum states (primarily China, Hong Kong, Singapore, and many smaller funds).41 For reference, note that this is almost exactly the same total wealth as that represented by the Forbes billionaires (around $5.4 trillion in 2013).

If a sufficiently large fraction of the corresponding rent is invested in sovereign wealth funds every year (a fraction that should be considerably larger than it is today), one can imagine a scenario in which the sovereign wealth funds would own 10–20 percent or more of global capital by 2030–2040. No law of economics rules this out. Everything depends on supply and demand, on whether or not new oil deposits and/or sources of energy are discovered, and on how rapidly people learn to live without petroleum. In any event, it is almost inevitable that the sovereign wealth funds of the petroleum exporting countries will continue to grow and that their share of global assets in 2030–2040 will be at least two to three times greater than it is today—a significant increase.


pages: 422 words: 113,830

Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism by Kevin Phillips

"World Economic Forum" Davos, Alan Greenspan, algorithmic trading, asset-backed security, bank run, banking crisis, Bear Stearns, Bernie Madoff, Black Swan, Bretton Woods, BRICs, British Empire, business cycle, buy and hold, collateralized debt obligation, computer age, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency peg, diversification, Doha Development Round, energy security, financial deregulation, financial engineering, financial innovation, fixed income, Francis Fukuyama: the end of history, George Gilder, Glass-Steagall Act, housing crisis, Hyman Minsky, imperial preference, income inequality, index arbitrage, index fund, interest rate derivative, interest rate swap, Joseph Schumpeter, junk bonds, Kenneth Rogoff, large denomination, Long Term Capital Management, low interest rates, market bubble, Martin Wolf, Menlo Park, Michael Milken, military-industrial complex, Minsky moment, mobile money, money market fund, Monroe Doctrine, moral hazard, mortgage debt, Myron Scholes, new economy, oil shale / tar sands, oil shock, old-boy network, peak oil, plutocrats, Ponzi scheme, profit maximization, prosperity theology / prosperity gospel / gospel of success, Renaissance Technologies, reserve currency, risk tolerance, risk/return, Robert Shiller, Ronald Reagan, Satyajit Das, Savings and loan crisis, shareholder value, short selling, sovereign wealth fund, stock buybacks, subprime mortgage crisis, The Chicago School, Thomas Malthus, too big to fail, trade route

Redeployment of these excess reserves, in turn, spotlighted the dollar’s fifth weakness—vulnerability to the institutional firepower (over $2 trillion in late 2007) of the sovereign wealth funds being put into commission from Qatar to Russia to China. In order to understand potential dollar vulnerability, some further measurement of the way wealth was being realigned to Asia was in order. Of the more than $5 trillion worth of foreign-currency reserves in the world, up fivefold in ten years, roughly two-thirds had accumulated in Asia. Of the seven sovereign wealth funds with assets of over $100 billion, six (all save Norway’s) flew Asian flags. Figure 5.3 displays both power rolls.

Because the Chinese stock market boom in 2007 exaggerated the top-tier global rank of four large Chinese banks and the country’s two principal brokerage firms, it may be wise to emphasize other yardsticks of Asian financial prowess. Standouts include the burgeoning investment in foreign financial institutions by major sovereign wealth funds, and small, tentative indicators of a rising Asian monetary policy coordination that might hint at a continental economic union or common currency.18 Indeed, by the end of the year, investments by Asian sovereign wealth funds started playing such a prominent role in bailing out shaky or troubled U.S. banks and investment firms—Citigroup, Bear Stearns, and Morgan Stanley—that a new wisecrack made the rounds of Manhattan trading floors: “The joke is: Shanghai, Dubai, Mumbai or goodbye.”19 The last thing that wobbly, negligent U.S. capitalism needs is that wobbly negligence facilitating the rapid emergence of a rival continent.

FINANCIAL, MONETARY, AND ASSETS-PRESERVATION MERCANTILISM One intriguing sidebar to the intensifying August debate over the debt and housing bubble was a slowly spreading perception by the financial media of trends toward protectionism, mercantilism, and economic nationalism. Semantic disagreements vied with the political variety, but one could identify a number of strands. Summer’s seeming defeat of the Doha Round of world trade negotiations bespoke a resurgence of trade-related protectionism. The rise of sovereign wealth funds (huge government-run investment agencies) in China, Russia, Qatar, Abu Dhabi, and elsewhere grabbed attention as new vehicles of economic nationalism, simultaneously producing countermovements as France, Germany, the United States, and other nations expressed skepticism about letting state-owned foreign companies buy up important or strategic firms.


pages: 289 words: 77,532

The Secret Club That Runs the World: Inside the Fraternity of Commodity Traders by Kate Kelly

"Hurricane Katrina" Superdome, Alan Greenspan, Bakken shale, bank run, Bear Stearns, business cycle, commodity super cycle, Credit Default Swap, diversification, fixed income, Gordon Gekko, index fund, light touch regulation, locking in a profit, London Interbank Offered Rate, Long Term Capital Management, margin call, oil-for-food scandal, paper trading, peak oil, Ponzi scheme, proprietary trading, risk tolerance, Ronald Reagan, side project, Silicon Valley, Sloane Ranger, sovereign wealth fund, supply-chain management, the market place

Meanwhile, behind the scenes, another powerful player was joining their number: Qatar Holding, the investment subsidiary of the Qatar Investment Authority, the sovereign-wealth fund that was run by Ahmad al-Sayed, the young lawyer Glasenberg had met—and disappointed—while marketing the Glencore IPO. Noting the relatively cheap price and rumors of a potential combination with Glencore, Qatar Holding had been buying shares of Xstrata for several months, amassing a 3.6 percent stake by the middle of March. Separately, the sovereign-wealth fund was talking to executives at Morgan Stanley about purchasing a minority stake in the bank’s commodities unit, which was by then a far less robust facsimile of the place where Jennifer Fan and Jean Bourlot had once traded.

“Xstrata should be under no delusions”: Helia Ebrahimi and James Quinn, “Chiefs at Risk in Xstrata Merger,” Telegraph, February 4, 2012, http://www.telegraph.co.uk/finance/newsbysector/industry/mining/9061755/Chiefs-at-risk-in-Xstrata-merger-talks.html. A press release was soon to be issued: Qatar Holding, “Qatar Holding Seeks Improved Terms in Proposed Merger of Glencore with Xstrata,” news release, June 26, 2012. 10 percent at last check: Chris Wright, “Sovereign Wealth Funds: Qatar Seals Its Kingmaker Role in Xstrata Deal,” Euromoney, December 2012, http://www.euromoney.com/Article/3123638/Sovereign-wealth-funds-Qatar-seals-its-kingmaker-role-in-Xstrata-deal.html. had fallen 42 percent: Half-Yearly Report 2012, Xstrata, http://www.glencorexstrata.com/assets/Uploads/xta-ir2012-en.pdf. “end of the world”: Josephine Moulds, “Glencore’s Merger with Xstrata Close to Collapse,” Guardian, August 21, 2012, http://www.theguardian.com/business/2012/aug/21/glencore-merger-xstrata-close-collapse.

Isabelle Ealet, who had befriended Gary Cohn in the early 1990s and given young Andurand his break in commodities in 2000, was by then cohead of the firm’s entire securities division, the only woman to have ever won the title. By 2012, aware of the angst over failed physical-commodity purchases, she allowed two of her employees to explore selling Goldman’s physical assets—Metro, its network of coal mines, and a few smaller investments. Morgan Stanley was already in talks to sell its commodity division to a sovereign-wealth fund; perhaps there was another market opening at the time. When word got back to Cohn, he called Ealet on it. “You’re wasting your time,” he told her. Despite the limitations, commodities was an important focus for Goldman, he added. The business wasn’t going anywhere. September 2013 was the five-year anniversary of the financial crisis, and the major commodity players on Wall Street were still enjoying a unique set of regulatory advantages.


pages: 339 words: 103,546

Blood and Oil: Mohammed Bin Salman's Ruthless Quest for Global Power by Bradley Hope, Justin Scheck

"World Economic Forum" Davos, augmented reality, Ayatollah Khomeini, Boston Dynamics, clean water, coronavirus, distributed generation, Donald Trump, Downton Abbey, Elon Musk, Exxon Valdez, financial engineering, Google Earth, high net worth, Jeff Bezos, Marc Andreessen, Mark Zuckerberg, Masayoshi Son, megaproject, MITM: man-in-the-middle, new economy, NSO Group, Peter Thiel, public intellectual, ride hailing / ride sharing, Sand Hill Road, Silicon Valley, SoftBank, South of Market, San Francisco, sovereign wealth fund, starchitect, Steve Bannon, Steve Jobs, tech billionaire, Tim Cook: Apple, trade route, traumatic brain injury, Travis Kalanick, Uber for X, urban planning, Virgin Galactic, Vision Fund, WeWork, women in the workforce, young professional, zero day

If they failed, they’d be removed. At a party around that time, Turki Al Sheikh, by then appointed head of the General Sports Authority, put his arm around sovereign wealth fund chief Yasir al-Rumayyan and told a group of friends, “We could get fired any time.” If new ministers got caught trying to enrich themselves, they faced much harsher treatment. Fakeih seemed an unlikely man to meet such a fate. He was appointed to the board of the sovereign wealth fund and contributed to Vision 2030. He struck Western diplomats, consultants, and businessmen as an integral part of the prince’s changes. They were shocked when news emerged that Fakeih had been swept up in the Ritz arrests, and the Royal Court never said what he’d been detained for, though he remains locked up.

Even when paying an informal visit to the Riyadh palaces of his sister or brother, Turki would wear a tan or black bisht, a cloak embroidered with gold thread, the Saudi equivalent of a formal suit. Believing himself a victim of his father’s relatively miserly ways, Turki was also obsessed with money. And it had gotten him embroiled in scandals, including a distant but important role in the roiling 1Malaysia Development Berhad sovereign wealth fund debacle that was just coming to light in late 2015. He received tens of millions of dollars from 1MDB allegedly for his role in part of the scheme where his business advisor used his connections and name to make it look like Malaysia was entering a joint venture with the government of Saudi Arabia.

In the ensuing weeks he grilled Saudi officials and foreign consultants alike on how they could show their ideas were working. He’d lose patience with, say, the finance minister and turn instead to the Ministry of Economy and Planning for an urgent task. “The principles changed every week. The wheel gets reinvented every few days,” a person working for BCG complained. The sovereign wealth fund debut showed the world Mohammed was planning to spend. A month later he hosted US secretary of state John Kerry on his yacht the Serene. But he still needed a splashy deal to introduce the Public Investment Fund (PIF) as the new investor on the block. Not long before, Mohammed had been introduced to Travis Kalanick, founder of the then-hot start-up Uber.


pages: 304 words: 99,836

Why I Left Goldman Sachs: A Wall Street Story by Greg Smith

Alan Greenspan, always be closing, asset allocation, Bear Stearns, Black Swan, bonus culture, break the buck, collateralized debt obligation, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, delayed gratification, East Village, fear index, financial engineering, fixed income, Flash crash, glass ceiling, Glass-Steagall Act, Goldman Sachs: Vampire Squid, high net worth, information asymmetry, London Interbank Offered Rate, mega-rich, money market fund, new economy, Nick Leeson, proprietary trading, quantitative hedge fund, Renaissance Technologies, short selling, short squeeze, Silicon Valley, Skype, sovereign wealth fund, Stanford marshmallow experiment, statistical model, technology bubble, too big to fail

When you walked onto the trading floor, you couldn’t tell who was who. There were just rows and rows of people. Over the first few weeks, I began to understand who chose one specialty and who chose the other, and why. The salesperson, of course, dealt with clients. And whether the client was a mutual fund in Boston, a macro hedge fund in New York, or a sovereign wealth fund in the Middle East, these clients managed hundreds of billions of dollars in assets, executed trades with the firm frequently, and paid Goldman commissions ranging from thousands of dollars per year to the double-digit millions. Salespeople called their client contacts every day, gave them advice, listened to their problems, tried to think of investment ideas for them.

He began his spiel by talking about Laura Mehta, a woman he had hired recently from Morgan Stanley to be an MD in Derivatives sales and his effective number two. A number of clients had urged Daffey to try to hire her—she was a brilliant Princeton grad, and highly regarded by some of the biggest sovereign wealth funds, hedge funds, and asset managers on the Street. My initial perception of her was that she was a class act. In addition, she exuded a quality that was rare on trading floors: she was genuinely pleasant. When she arrived, Daffey had needed to pair her with someone, and he had assigned Tim Connors as her counterpart VP.

Daffey needed someone by Connors’s side to help build the business. Would I do it? I was immediately excited. When the partner in charge of Derivatives Sales offers you an opportunity like this, I thought, you jump on it. I jumped on it. The new job was an opportunity to learn a broader set of derivatives products and diversify my client base into sovereign wealth funds, quantitative hedge funds, and state pension plans. Also, I thought it would be fun. And it worked out. The markets turned around in 2005, and our little Derivatives Sales team—Laura, Connors, and me—began to fire on all cylinders. The fanatical attention to detail that Corey had taught me helped our desk consolidate our gains.


The New Map: Energy, Climate, and the Clash of Nations by Daniel Yergin

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", 3D printing, 9 dash line, activist fund / activist shareholder / activist investor, addicted to oil, Admiral Zheng, Albert Einstein, American energy revolution, Asian financial crisis, autonomous vehicles, Ayatollah Khomeini, Bakken shale, Bernie Sanders, BRICs, British Empire, carbon tax, circular economy, clean tech, commodity super cycle, company town, coronavirus, COVID-19, decarbonisation, deep learning, Deng Xiaoping, Didi Chuxing, disruptive innovation, distributed generation, Donald Trump, driverless car, Edward Snowden, Elon Musk, energy security, energy transition, failed state, Ford Model T, geopolitical risk, gig economy, global pandemic, global supply chain, green new deal, Greta Thunberg, hydraulic fracturing, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), inventory management, James Watt: steam engine, John Zimmer (Lyft cofounder), Kickstarter, LNG terminal, Lyft, Malacca Straits, Malcom McLean invented shipping containers, Masayoshi Son, Masdar, mass incarceration, megacity, megaproject, middle-income trap, Mikhail Gorbachev, mutually assured destruction, new economy, off grid, oil rush, oil shale / tar sands, oil shock, open economy, paypal mafia, peak oil, pension reform, power law, price mechanism, purchasing power parity, RAND corporation, rent-seeking, ride hailing / ride sharing, rolling blackouts, Ronald Reagan, Russian election interference, self-driving car, Silicon Valley, smart cities, social distancing, South China Sea, sovereign wealth fund, Suez crisis 1956, super pumped, supply-chain management, TED Talk, trade route, Travis Kalanick, Twitter Arab Spring, Uber and Lyft, uber lyft, ubercab, UNCLOS, UNCLOS, uranium enrichment, vertical integration, women in the workforce

The proceeds of the IPO were slated to go into the Public Investment Fund (PIF), the sovereign wealth fund. And that, in turn, was part of a larger strategy—to turn the PIF into the world’s largest sovereign wealth fund. Riyadh could look next door to the sovereign wealth funds of Abu Dhabi. Or at Norway’s sovereign wealth fund, with over a trillion dollars in assets. But Saudi Arabia usually produces about three times as much oil as Abu Dhabi and more than five times as much as Norway. And thus, said the crown prince, Saudi Arabia should have a sovereign wealth fund “larger than the largest fund on earth.” In turn, the money in the PIF would help launch Vision 2030, and remake Saudi Arabia.

The closing of international capital markets put Russian financial institutions and companies that had borrowed in dollars or euros in the precarious position of not being able to meet their debt payments. The Kremlin stepped in with an “anti-crisis” program that provided subsidies and funding. To do so, it drew down its sovereign wealth funds. Those funds had been built up over several years by Alexei Kudrin, finance minister from 2000 to 2011. He had been seared by the 1998 crisis when the Russian economy went into free fall and the government ran out of money. Kudrin had long been criticized for socking away some of Russia’s large oil earnings into sovereign wealth funds and paying off its foreign debt, instead of spending the money right away. But now the wisdom of the “rainy day” funds was being proved.

With that in mind, he had established ADIA—the Abu Dhabi Investment Authority—considered today the second largest sovereign wealth fund in the world, with assets publicly estimated at over $800 billion. His son, Mohammed bin Zayed, became crown prince in 2004. He catalyzed the drive to broaden the economy. “In 50 years, when we might have the last barrel of oil,” he said, “when it is shipped abroad, will we be sad? If we are investing today in the right sectors, I can tell you we will celebrate.” One initiative was Mubadala, a second sovereign wealth fund, with about $230 billion under management, which tilts toward building and investing in companies both in Abu Dhabi and internationally.


pages: 194 words: 56,074

Angrynomics by Eric Lonergan, Mark Blyth

AlphaGo, Amazon Mechanical Turk, anti-communist, Asian financial crisis, basic income, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big Tech, bitcoin, blockchain, Branko Milanovic, Brexit referendum, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collective bargaining, COVID-19, credit crunch, cryptocurrency, decarbonisation, deindustrialization, diversified portfolio, Donald Trump, Erik Brynjolfsson, Extinction Rebellion, fake news, full employment, gig economy, green new deal, Greta Thunberg, hiring and firing, Hyman Minsky, income inequality, income per capita, Jeremy Corbyn, job automation, labour market flexibility, liberal capitalism, lockdown, low interest rates, market clearing, Martin Wolf, Modern Monetary Theory, precariat, price stability, quantitative easing, Ronald Reagan, secular stagnation, self-driving car, Skype, smart grid, sovereign wealth fund, spectrum auction, The Future of Employment, The Great Moderation, The Spirit Level, universal basic income

First off, we know building a NWF is feasible because sovereign wealth funds already exist. Places like Singapore, Norway, many of the Gulf States – not exactly typical Marxist enclaves – have these institutions. Sovereign wealth funds are large holdings of international assets – bonds, stocks, infrastructure and property – which the state owns and either manages itself or mandates third parties to manage on its behalf. Now it is important to be clear that the state is not trying to run these assets – this is not old-school nationalization. The assets in sovereign wealth funds are traded on global exchanges, and these sovereign wealth funds are typically passive minority holders of these assets.

The assets in sovereign wealth funds are traded on global exchanges, and these sovereign wealth funds are typically passive minority holders of these assets. In the same way that large charities hold investment assets, or pension funds, or university endowments, like Harvard, sovereign wealth funds are buying assets to accumulate savings and wealth on behalf of their public from the earnings such assets accrue. Now Singapore, the Gulf States and Norway are an odd group of countries. Can we copy them? Do we want to? ERIC: Yes, and no. Let me explain. The origin of these wealth funds is typically a very large balance of payments surplus (these countries export lots more than they import and have to bank the receipts or send them abroad to earn an income with them), which creates a financial dilemma for these states.

It’s prudent because although the government is issuing debt its net debt, the difference between its assets and liabilities – which is what really matters – is unchanged because the government is not issuing debt to spend it on consumption. It’s buying real assets with it. And we only distribute a surplus, after the debt has been repaid, in 10–15 years, depending on the success of the investments. The returns generated by existing sovereign wealth funds suggest a very high probability of success. But let’s address three typical concerns. First, this sounds risky: issuing debt and buying stocks. Second, doesn’t the government already have too much debt? Third, why is the government able to do this? It sounds too good to be true. If interest rates rise will it no longer be possible?


pages: 291 words: 91,783

Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America by Matt Taibbi

addicted to oil, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, Bear Stearns, Bernie Sanders, Bretton Woods, buy and hold, carried interest, classic study, clean water, collateralized debt obligation, collective bargaining, computerized trading, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, David Brooks, desegregation, diversification, diversified portfolio, Donald Trump, financial innovation, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Greenspan put, illegal immigration, interest rate swap, laissez-faire capitalism, London Interbank Offered Rate, Long Term Capital Management, margin call, market bubble, medical malpractice, military-industrial complex, money market fund, moral hazard, mortgage debt, Nixon triggered the end of the Bretton Woods system, obamacare, passive investing, Ponzi scheme, prediction markets, proprietary trading, prudent man rule, quantitative easing, reserve currency, Ronald Reagan, Savings and loan crisis, Sergey Aleynikov, short selling, sovereign wealth fund, too big to fail, trickle-down economics, Y2K, Yom Kippur War

Bush have just done an interesting thing, going off the map to launch a lunatic invasion of Iraq in a move that destabilizes the entire region, again pissing off pretty much all the oil-rich Arab nationalist regimes in the Middle East, including the Saudi despots—although, on the other hand, fuck them. The price of oil pushes above forty dollars a barrel that year and begins a steep ascent. It’s also around then that the phenomenon of the sovereign wealth fund began to evolve rapidly. According to the Sovereign Wealth Fund Institute: Since 2005, at least 17 sovereign wealth funds have been created. As other countries grow their currency reserves, they will seek greater returns. Their growth has also been skyrocketed by rising commodity prices, especially oil and gas, especially between the years 2003–2008.

What these clowns did with all that cash they siphoned from you and what they did to take advantage of your newfound desperation is the other end of the story. 5 The Outsourced Highway Wealth Funds IN THE SUMMER of 2009 I got a call from an acquaintance who worked in the Middle East. He was a young American who worked for something called a sovereign wealth fund, a giant state-owned pile of money that swims around the world in search of things to buy. Sovereign wealth funds, or SWFs, are huge in the Middle East. Most of the bigger oil-producing states have massive SWFs that act as cash repositories (with holdings often kept in dollars) for the revenues generated by, for instance, state-owned oil companies.

“I am doubting that result because I think it would be easy for an SWF to set up another company, say in Switzerland, or work through a broker or fund of funds and therefore not have a swap on directly with a bank but through an intermediary,” he says. “I think that the banks in complying with the CFTC request followed the letter of the law and not the spirit of the law.” He goes on: “So if a sovereign wealth fund has an investment in a hedge fund—which they have a bunch—and that hedge fund was then invested in commodities, I expect that a bank would report that as a hedge fund to the CFTC and not a sovereign wealth fund. And their argument would be, ‘How can we know who the hedge fund’s investors are?’—even if they know darn well. “I think that this is very much a national security issue because the Arab states might be pumping up oil prices and siphoning off huge amounts of money from our economy,” he adds.


pages: 274 words: 81,008

The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything by Jason Kelly

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, antiwork, barriers to entry, Bear Stearns, Berlin Wall, call centre, Carl Icahn, carried interest, collective bargaining, company town, corporate governance, corporate raider, Credit Default Swap, diversification, eat what you kill, Fall of the Berlin Wall, family office, financial engineering, fixed income, Goldman Sachs: Vampire Squid, Gordon Gekko, housing crisis, income inequality, junk bonds, Kevin Roose, late capitalism, margin call, Menlo Park, Michael Milken, military-industrial complex, Occupy movement, place-making, proprietary trading, Rod Stewart played at Stephen Schwarzman birthday party, rolodex, Ronald Reagan, Rubik’s Cube, San Francisco homelessness, Sand Hill Road, Savings and loan crisis, shareholder value, side project, Silicon Valley, sovereign wealth fund, two and twenty

Yet Dubai’s troubles and the so-far missed, or elusive, opportunities in terms of investments can’t overshadow the enormous role the sovereign wealth funds continue to play in the world of private equity. By most accounts, they will become the biggest source of capital for private-equity funds within the next decade, a shift that stands to have profound implications on the form and strategy of the industry. The sovereign wealth landscape is increasingly influenced by Asia, and especially China. As in many other aspects of the global economy, China has emerged as both an ally and potential threat to private equity. China Investment Corp., a sovereign wealth fund, bought a stake in Blackstone around the time of its IPO in 2007.

See Service Employees International Union (SEIU) Senior debt September Service Employees International Union (SEIU) Shearson Lehman Holding Company Simon, William E. Simpson Thacher Slavkin, Heather Smith, Al Smith, Tripp Smith dinner Solotar, Joan Sonneborn, William Sorkin, Andrew Ross Sovereign wealth fund (SWF) Spitzer, Eliot “Staple financing” Staples Sterba, George Stern, Andy Stewart, James B. Stop and Shop Stromberg, Per Stuart, Scott Studzinski, John (Studz) Summit Properties SunGard Data Systems Super Return Middle East SWF. See Sovereign wealth fund (SWF) T. Rowe Taibbi, Matt TCW Teachers’ Retirement System of Texas Tehle, David Texas Instruments Texas Pacific Group. See TPG Texas Teachers The Texas Way “The Birthday Party” “The triumph of Blackstone on Wall Street” (Fortune) Thomas H.

Usually pronounced as “ILL-puh,” it began as a supper club in the early 1990s and evolved into an influential trade association. KKR: The firm founded by Jerome Kohlberg, Henry Kravis, and George Roberts in 1976. Headquartered in New York. Trades as KKR on the New York Stock Exchange. Limited partner: Abbreviated as LP, these are the pensions, endowments, and sovereign wealth funds that commit the money that comprises private-equity funds. Public pensions in California and Washington are examples of LPs. 9 West: The iconic sloping building on West 57th Street in Manhattan that houses KKR, among other private-equity firms, and offers sweeping views of Central Park. TPG: Created by David Bonderman, James Coulter, and William Price in 1992 and originally called Texas Pacific Group.


China's Superbank by Henry Sanderson, Michael Forsythe

"World Economic Forum" Davos, addicted to oil, Asian financial crisis, Bretton Woods, BRICs, Carmen Reinhart, Credit Default Swap, deindustrialization, Deng Xiaoping, Dutch auction, failed state, financial innovation, financial repression, fixed income, Great Leap Forward, high-speed rail, if you build it, they will come, income inequality, invisible hand, joint-stock company, junk bonds, Kenneth Rogoff, land bank, London Interbank Offered Rate, low interest rates, megacity, new economy, New Urbanism, price mechanism, race to the bottom, reserve currency, Ronald Reagan, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Solyndra, South Sea Bubble, sovereign wealth fund, special drawing rights, special economic zone, too big to fail, urban renewal, urban sprawl, work culture

On December 16, 2008, just as the financial crisis was worsening across the globe, CDB officially on paper became a commercial bank, but with one big omission: The bank would still be able to sell bonds with the sovereign credit rating to raise funds, the so-called zero-risk weighting that allowed banks to buy them and set aside no additional capital for potential losses. The government gave it a handy $20 billion injection from the sovereign wealth fund too, to “increase China Development Bank’s capital-adequacy ratio, strengthen its ability to prevent risk, and help its bank move toward completely commercialized operations.”79 A decade after Zhu Rongji’s reforms put a party cell in every bank, the state seemed to be bringing the bank closer with more defined ownership. The Barclays purchase had shown CDB as a powerful, global bank acting on its own like an uncontrolled sovereign wealth fund; Wen now moved to make CDB just another commercial state lender that faced formidable competition.

But before they could start spending on infrastructure, they needed funds and to deal with the problem of the ailing state-owned companies that littered the city’s landscape and were making huge losses but providing the bulk of employment. So they turned to CDB. In 2004, they set up Chongqing Yufu Asset Management Group, which would later become known as China’s Temasek, after the Singaporean sovereign wealth fund. Yufu went on to buy bad loans off of commercial banks’ books so local companies didn’t have to shut down and fire workers, which could have threatened the Communist Party’s desire for stability. Yet Yufu needed funding, and who would lend them money to buy a whole lot of questionable debts?

In the early summer of 2007, just as the subprime real estate market in the United States was beginning to collapse, CDB agreed to purchase a 3.1 percent stake in England’s Barclays Bank for £1.45 billion at £7.2 a share so that Barclays could increase its offer to purchase the Dutch lender, ABN Amro, in one of the biggest proposed bank acquisitions in history.75 Singapore’s sovereign wealth fund Temasek also had agreed to pump money in. Barclays’ bid lost out to a consortium led by Royal Bank of Scotland (RBS) that ended with RBS and ABN Amro having to be saved by the governments of their respective countries. What for a short time had seemed like the center of global financial action had ended in bailouts.


pages: 177 words: 38,221

Financing Basic Income: Addressing the Cost Objection by Richard Pereira

banks create money, basic income, behavioural economics, carbon credits, carbon tax, income inequality, job automation, Lyft, new economy, offshore financial centre, Paul Buchheit, quantitative easing, sovereign wealth fund, Tobin tax, transfer pricing, uber lyft, universal basic income, unpaid internship, Wall-E

In the two-year period during which this book was being written and edited, we have seen the pursuit of policies of austerity deepen worldwide, while simultaneously the issue of tax evasion and avoidance through offshore tax havens has continually gained more exposure in the popular press. In the United States, the growing gap between rich and poor was a central feature of a very long presidential campaign, particularly before the Democratic Party finalized its choice of candidate for the White House. In some countries sovereign wealth funds (SWFs) have continued to amass wealth for public goods, while other countries have allowed the value of public and natural resources to be squandered. It is clear that there is vast v vi PREFACE wealth in societies throughout the world, but that it increasingly is consolidated in fewer hands, fewer large multinational corporations and in offshore tax havens that are an affront to the proper functioning of society and management of its public finances.

New York: Palgrave Macmillan. Gary Flomenhoft is an International Postgraduate Research Scholar (IPRS) and University of Queensland Centennial Scholar and PhD candidate at the Centre for Social Responsibility in Mining (CSRM). His research area is the economic value of common wealth and governance of Sovereign Wealth Funds. Prior to enrolling at Sustainable Minerals Institute (SMI), Gary was a faculty member for 11 years in Community and International Development and Natural Resources at the 100 G. FLOMENHOFT University of Vermont (UVM), serving as a Lecturer in Applied Economics, Renewable Energy, International Development, and Public Policy.

He directed the grant-funded Green Tax and Common Assets project at the Gund Institute for seven years, where he originated the Vermont Common Assets Trust Fund (VCAT) bill, which was submitted to the legislature twice. His chapter on Vermont Common Assets appeared in the book Exporting the Alaska Model, which promotes the Alaska Permanent Fund and Dividend as a model for basic income around the world using Sovereign Wealth Funds. CHAPTER 5 Conclusion Richard Pereira Abstract A review of the three basic income (BI) models and accompanying frameworks for creating a decent BI are presented in this chapter. A differentiation between positive and counterproductive BI proposals is made, particularly regarding the manner in which social services are treated in contrasting proposals.


pages: 471 words: 124,585

The Ascent of Money: A Financial History of the World by Niall Ferguson

Admiral Zheng, Alan Greenspan, An Inconvenient Truth, Andrei Shleifer, Asian financial crisis, asset allocation, asset-backed security, Atahualpa, bank run, banking crisis, banks create money, Bear Stearns, Black Monday: stock market crash in 1987, Black Swan, Black-Scholes formula, Bonfire of the Vanities, Bretton Woods, BRICs, British Empire, business cycle, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, classic study, collateralized debt obligation, colonial exploitation, commoditize, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, deglobalization, diversification, diversified portfolio, double entry bookkeeping, Edmond Halley, Edward Glaeser, Edward Lloyd's coffeehouse, equity risk premium, financial engineering, financial innovation, financial intermediation, fixed income, floating exchange rates, Fractional reserve banking, Francisco Pizarro, full employment, Future Shock, German hyperinflation, Greenspan put, Herman Kahn, Hernando de Soto, high net worth, hindsight bias, Home mortgage interest deduction, Hyman Minsky, income inequality, information asymmetry, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, iterative process, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", John Meriwether, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labour mobility, Landlord’s Game, liberal capitalism, London Interbank Offered Rate, Long Term Capital Management, low interest rates, market bubble, market fundamentalism, means of production, Mikhail Gorbachev, Modern Monetary Theory, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, Naomi Klein, National Debt Clock, negative equity, Nelson Mandela, Nick Bostrom, Nick Leeson, Northern Rock, Parag Khanna, pension reform, price anchoring, price stability, principal–agent problem, probability theory / Blaise Pascal / Pierre de Fermat, profit motive, quantitative hedge fund, RAND corporation, random walk, rent control, rent-seeking, reserve currency, Richard Thaler, risk free rate, Robert Shiller, rolling blackouts, Ronald Reagan, Savings and loan crisis, savings glut, seigniorage, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spice trade, stocks for the long run, structural adjustment programs, subprime mortgage crisis, tail risk, technology bubble, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Bayes, Thomas Malthus, Thorstein Veblen, tontine, too big to fail, transaction costs, two and twenty, undersea cable, value at risk, W. E. B. Du Bois, Washington Consensus, Yom Kippur War

Even more important was the growth of sovereign wealth funds, entities created by countries running large trade surpluses to manage their accumulating wealth. By the end of 2007 sovereign wealth funds had around $2.6 trillion under management, more than all the world’s hedge funds, and not far behind government pension funds and central bank reserves. According to a forecast by Morgan Stanley, within fifteen years they could end up with assets of $27 trillion - just over 9 per cent of total global financial assets. Already in 2007, Asian and Middle Eastern sovereign wealth funds had moved to invest in Western financial companies, including Barclays, Bear Stearns, Citigroup, Merrill Lynch, Morgan Stanley, UBS and the private equity firms Blackstone and Carlyle.

Loans that were originally intended to finance purchases of corporations by private equity partnerships were also only saleable at significant discounts. Having suffered enormous losses, many of the best-known American and European banks had to turn not only to Western central banks for short-term assistance to rebuild their reserves but also to Asian and Middle Eastern sovereign wealth funds for equity injections in order to rebuild their capital bases. All of this may seem arcane to some readers. Yet the ratio of a bank’s capital to its assets, technical though it may sound, is of more than merely academic interest. After all, a ‘great contraction’ in the US banking system has convincingly been blamed for the outbreak and course of the Great Depression between 1929 and 1933, the worst economic disaster of modern history.7 If US banks have lost significantly more than the $255 billion to which they have so far admitted as a result of the subprime mortgage crisis and credit crunch, there is a real danger that a much larger - perhaps tenfold larger - contraction in credit may be necessary to shrink the banks’ balance sheets in proportion to the decline in their capital.

Already in 2007, Asian and Middle Eastern sovereign wealth funds had moved to invest in Western financial companies, including Barclays, Bear Stearns, Citigroup, Merrill Lynch, Morgan Stanley, UBS and the private equity firms Blackstone and Carlyle. For a time it seemed as if the sovereign wealth funds might orchestrate a global bail-out of Western finance; the ultimate role reversal in financial history. For the proponents of what George Soros has disparaged as ‘market fundamentalism’, here was a painful anomaly: among the biggest winners of the latest crisis were state-owned entities.bi And yet there are reasons why this seemingly elegant, and quintessentially Chimerican, resolution of the American crisis has failed to happen.


pages: 537 words: 144,318

The Invisible Hands: Top Hedge Fund Traders on Bubbles, Crashes, and Real Money by Steven Drobny

Albert Einstein, AOL-Time Warner, Asian financial crisis, asset allocation, asset-backed security, backtesting, banking crisis, Bear Stearns, Bernie Madoff, Black Swan, bond market vigilante , book value, Bretton Woods, BRICs, British Empire, business cycle, business process, buy and hold, capital asset pricing model, capital controls, central bank independence, collateralized debt obligation, commoditize, commodity super cycle, commodity trading advisor, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency peg, debt deflation, diversification, diversified portfolio, equity premium, equity risk premium, family office, fiat currency, fixed income, follow your passion, full employment, George Santayana, global macro, Greenspan put, Hyman Minsky, implied volatility, index fund, inflation targeting, interest rate swap, inventory management, inverted yield curve, invisible hand, junk bonds, Kickstarter, London Interbank Offered Rate, Long Term Capital Management, low interest rates, market bubble, market fundamentalism, market microstructure, Minsky moment, moral hazard, Myron Scholes, North Sea oil, open economy, peak oil, pension reform, Ponzi scheme, prediction markets, price discovery process, price stability, private sector deleveraging, profit motive, proprietary trading, purchasing power parity, quantitative easing, random walk, Reminiscences of a Stock Operator, reserve currency, risk free rate, risk tolerance, risk-adjusted returns, risk/return, savings glut, selection bias, Sharpe ratio, short selling, SoftBank, sovereign wealth fund, special drawing rights, statistical arbitrage, stochastic volatility, stocks for the long run, stocks for the long term, survivorship bias, tail risk, The Great Moderation, Thomas Bayes, time value of money, too big to fail, Tragedy of the Commons, transaction costs, two and twenty, unbiased observer, value at risk, Vanguard fund, yield curve, zero-sum game

I would argue that the risk management function either has to be shared or be independent of the CIO so that it is strictly enforced, preventing the manager from blowing up. If you were running a new sovereign wealth fund, where several hundred billion dollars in cash was deposited in a new account, how would you approach asset allocation? The first step would be currency diversification. Most of the large sovereign wealth funds are in business now because they are running large current account surpluses that are largely dollar based. I would first focus on how that U.S. dollar risk can be mitigated through a currency or commodity strategy. Next, it would be important to define the goals of this particular sovereign wealth fund. Is the goal long-term capital appreciation, strategic acquisition of foreign interests, or protection of a nation’s savings?

You could allocate this kind of sum if you got creative and locked up the money with managers for a long period. Taken to the extreme, however, if every pension fund in the world followed my advice, then it would obviously no longer be possible. We are far from such a scenario right now. If you were asked to run a new sovereign wealth fund, how would you approach it? Sovereign wealth funds are a little bit trickier because I am not sure that they have a returns focused mandate. Much of what they are looking at concerns the strategic interests of a given country. If you are managing the country’s money, you should think about the country’s interests, beyond just earning a percentage return on capital.

Markets around the world, from real estate to equities to commodities to credit, posted huge declines, taking down with them some of the world’s most venerable financial institutions, a wide variety of alternative asset managers (hedge funds, private equity, venture capital, and real asset managers), and a host of real money accounts (pension funds, insurance companies, endowments, foundations, family offices, and sovereign wealth funds). Almost everyone lost money in 2008, and in many cases more than anyone imagined possible. Anger and confusion linger in the aftermath of the crisis, but are by no means limited to market players. Main Street is reeling as homes and jobs have been lost, savings have evaporated, and many assumptions governing the stability of modern society have been challenged.


pages: 491 words: 131,769

Crisis Economics: A Crash Course in the Future of Finance by Nouriel Roubini, Stephen Mihm

Alan Greenspan, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, barriers to entry, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, bond market vigilante , bonus culture, Bretton Woods, BRICs, British Empire, business cycle, call centre, capital controls, Carmen Reinhart, central bank independence, centralized clearinghouse, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, dark matter, David Ricardo: comparative advantage, debt deflation, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, fiat currency, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, financial intermediation, full employment, George Akerlof, Glass-Steagall Act, global pandemic, global reserve currency, Gordon Gekko, Greenspan put, Growth in a Time of Debt, housing crisis, Hyman Minsky, information asymmetry, interest rate swap, invisible hand, Joseph Schumpeter, junk bonds, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, Louis Bachelier, low interest rates, margin call, market bubble, market fundamentalism, Martin Wolf, means of production, Minsky moment, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, Northern Rock, offshore financial centre, oil shock, Paradox of Choice, paradox of thrift, Paul Samuelson, Ponzi scheme, price stability, principal–agent problem, private sector deleveraging, proprietary trading, pushing on a string, quantitative easing, quantitative trading / quantitative finance, race to the bottom, random walk, regulatory arbitrage, reserve currency, risk tolerance, Robert Shiller, Satyajit Das, Savings and loan crisis, savings glut, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, subprime mortgage crisis, Suez crisis 1956, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, too big to fail, tulip mania, Tyler Cowen, unorthodox policies, value at risk, We are all Keynesians now, Works Progress Administration, yield curve, Yom Kippur War

Given that the entire financial system was in the same boat, the banks had few places to turn. Their solution was to go hat in hand to sovereign wealth funds, investment vehicles owned by foreign governments in the Middle East and Asia. The prospect of Saudi Arabian and Chinese investors controlling American and European banks was politically untenable, so the recapitalization of the troubled banks took the form of preferred shares. This meant in practice that sovereign wealth funds received only a minority stake, no board membership, and no voting rights. Citigroup raised $7.5 billion from a fund in Abu Dhabi; UBS got $11 billion from Singapore’s fund and a group of private investors from the Middle East.

This was made possible by foreign purchases of debt. The government issued some of that debt; plenty more was issued on the backs of private mortgages and other assets. Foreign central banks and sovereign wealth funds purchased most of it. In fact, nonresidents now hold about half of the outstanding U.S. Treasury bills and bonds (outside of those held by the Federal Reserve), and two-thirds of these are held by central banks and sovereign wealth funds. In other words, it’s not private investors who have financed the lion’s share of the current account deficit. They’re not stupid: they know the dollar might depreciate and have no interest in putting their money at risk.

These changes in global economic governance will play out under the watchful eye of a much more extensive group of stakeholders: Brazil, India, China, Russia, and the other countries that make up the ascendant G-20. These increasingly powerful nations will profoundly shape the handling of future crises; so will a host of new players and institutions in the global financial system, like sovereign wealth funds, offshore financial centers, and international monetary unions. The final “Outlook” section surveys the road ahead, taking a hard look at the many dangers that await the world economy. The crisis that gave us the Great Recession may be over for now, but potential pitfalls and risks loom large.


pages: 475 words: 155,554

The Default Line: The Inside Story of People, Banks and Entire Nations on the Edge by Faisal Islam

"World Economic Forum" Davos, Alan Greenspan, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, Basel III, Ben Bernanke: helicopter money, Berlin Wall, Big bang: deregulation of the City of London, bond market vigilante , book value, Boris Johnson, British Empire, capital controls, carbon credits, carbon footprint, carbon tax, Celtic Tiger, central bank independence, centre right, collapse of Lehman Brothers, credit crunch, Credit Default Swap, crony capitalism, Crossrail, currency risk, dark matter, deindustrialization, Deng Xiaoping, disintermediation, energy security, Eugene Fama: efficient market hypothesis, eurozone crisis, Eyjafjallajökull, financial deregulation, financial engineering, financial innovation, financial repression, floating exchange rates, forensic accounting, forward guidance, full employment, G4S, ghettoisation, global rebalancing, global reserve currency, high-speed rail, hiring and firing, inflation targeting, Irish property bubble, junk bonds, Just-in-time delivery, labour market flexibility, light touch regulation, London Whale, Long Term Capital Management, low interest rates, margin call, market clearing, megacity, megaproject, Mikhail Gorbachev, mini-job, mittelstand, Money creation, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, negative equity, North Sea oil, Northern Rock, offshore financial centre, open economy, paradox of thrift, Pearl River Delta, pension reform, price mechanism, price stability, profit motive, quantitative easing, quantitative trading / quantitative finance, race to the bottom, regulatory arbitrage, reserve currency, reshoring, Right to Buy, rising living standards, Ronald Reagan, savings glut, shareholder value, sovereign wealth fund, tail risk, The Chicago School, the payments system, too big to fail, trade route, transaction costs, two tier labour market, unorthodox policies, uranium enrichment, urban planning, value at risk, WikiLeaks, working-age population, zero-sum game

In September 2010, Lord Sassoon, the commercial secretary to the Treasury, led a sales mission to Saudi Arabia, Kuwait, Abu Dhabi and Dubai. The centrepiece of the roadshow was Robert Stheeman of the Debt Management Office, whose role it was to sell British gilts to the region’s oil-fuelled sovereign wealth funds and central banks. Britain, also an oil nation, had mysteriously misplaced its own sovereign wealth fund, squandering its North Sea windfall on current spending and tax cuts. Still, the Gulf nations could be relied on after being reassured about the solidity of gilt investments. A British minister had never gone on a roadshow like it before.

This journey across the line, from Europe’s gas control room in Moscow to Singapore’s parking lot of cargo ships, from New York trading floors to Newport market traders, from booming amateur landlords to impoverished young people, and from rebellious Greek tax inspectors to booming German forklift truck manufacturers, is one I have made in a decade of reporting global economics. Almost all of the story I have witnessed at first hand, a frankly incredible tale of winners and losers, or power changing hands, and a new breed of powerless. It is summed up in the existence of one man: the supervisory chairman of China’s national piggy bank, its sovereign wealth fund. He sits on $400 billion of reserves and he knows this weapon is so potent that he denies it is a weapon at all. Instead he happily meets with the Western governments, banks and companies desperate for this source of stable capital. And then he quotes Shakespeare at them. That piggy bank in China was connected to the 125 per cent mortgage which indebted and nearly upended Esther, a young single mum from Surrey whom I interviewed in late 2008.

Norway’s $455 billion state-backed oil fund had made a commercial decision to bet on the misfortune of Iceland’s banking sector. Merrill Lynch, Denmark’s Danske Bank and, ironically, RBS joined in with critical reports about Iceland’s opaque banking system. Iceland was furious that Norway’s sovereign wealth fund had started what seemed to be a speculative market attack on its banks. Norway’s giant national piggy bank was filled with the proceeds of oil money, but run on strict market principles. The investment decisions of such state-owned funds were beginning to have a diplomatic impact. The Norwegians retreated.


pages: 389 words: 87,758

No Ordinary Disruption: The Four Global Forces Breaking All the Trends by Richard Dobbs, James Manyika

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, access to a mobile phone, additive manufacturing, Airbnb, Amazon Mechanical Turk, American Society of Civil Engineers: Report Card, asset light, autonomous vehicles, Bakken shale, barriers to entry, business cycle, business intelligence, carbon tax, Carmen Reinhart, central bank independence, circular economy, cloud computing, corporate governance, creative destruction, crowdsourcing, data science, demographic dividend, deskilling, digital capitalism, disintermediation, disruptive innovation, distributed generation, driverless car, Erik Brynjolfsson, financial innovation, first square of the chessboard, first square of the chessboard / second half of the chessboard, Gini coefficient, global supply chain, global village, high-speed rail, hydraulic fracturing, illegal immigration, income inequality, index fund, industrial robot, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, inventory management, job automation, Just-in-time delivery, Kenneth Rogoff, Kickstarter, knowledge worker, labor-force participation, low interest rates, low skilled workers, Lyft, M-Pesa, machine readable, mass immigration, megacity, megaproject, mobile money, Mohammed Bouazizi, Network effects, new economy, New Urbanism, ocean acidification, oil shale / tar sands, oil shock, old age dependency ratio, openstreetmap, peer-to-peer lending, pension reform, pension time bomb, private sector deleveraging, purchasing power parity, quantitative easing, recommendation engine, Report Card for America’s Infrastructure, RFID, ride hailing / ride sharing, Salesforce, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart cities, Snapchat, sovereign wealth fund, spinning jenny, stem cell, Steve Jobs, subscription business, supply-chain management, synthetic biology, TaskRabbit, The Great Moderation, trade route, transaction costs, Travis Kalanick, uber lyft, urban sprawl, Watson beat the top human players on Jeopardy!, working-age population, Zipcar

“Oil-fuelled caution,” The Economist, May 22, 2014, www.economist.com/news/finance-and-economics/21602731-kingdom-does-not-splash-cash-other-gulf-states-oil-fuelled-caution. 58. Hugh Schofield, “PSG’s dramatic rise to European giants,” BBC.com, May 7, 2014, www.bbc.com/news/world-europe-27314338. 59. Sarfraz Thind, “Oil prices push sovereign wealth funds toward alternative investments,” Institutional Investor, February 20, 2014, www.institutionalinvestor.com/Article/3311509/Investors-Sovereign-Wealth-Funds/Oil-Prices-Push-Sovereign-Wealth-Funds-Toward-Alternative-Investments.html#.vaoepcjdxpo. 60. Gus Delaporte, “Norway takes Manhattan,” Commercial Observer, October 8, 2013; Gus Delaporte, “Norway’s wealth fund to acquire stake in Times Square Tower for $684M,” Commercial Observer, September 9, 2013. 61.

Traditionally, getting access to capital meant having a good credit rating and nurturing relationships with major financial institutions in financial hubs such as London, Tokyo, and New York. Now, however, it means tapping into other large pools of capital, such as sovereign wealth funds (SWFs) and pension funds, and using digital platforms for peer-to-peer lending and funding crowd sourcing. Given that the bulk of the increased demand for capital will be for long-term project financing in sectors such as infrastructure and real estate, executives and leaders will increasingly need to seek out pools of patient capital. Investors, such as pensions and sovereign wealth funds, could supply such capital. In doing so, they could capture higher profits than they could investing in government bonds, while maintaining hedges against inflation.

To lead these changes, asset owners will need to define long-term objectives and risk appetites more carefully and structure their portfolios accordingly. A probable consequence will be higher capital allocation in more illiquid assets that focus on long-term value creation, even if they suffer from temporary negative shocks. Singapore’s sovereign wealth fund GIC, for instance, looks at a twenty-year horizon when it focuses on opportunities in Asian emerging markets, regardless of their short-term volatility.73 Companies can also help their investors to focus on long-term horizons by providing other metrics to analyze their performances. To bolster its strategy of a combined decentralized door-to-door sales force and higher quality, Brazilian cosmetics company Natura published data such as sales force satisfaction and training hours per employee.


pages: 307 words: 82,680

A Pelican Introduction: Basic Income by Guy Standing

"World Economic Forum" Davos, anti-fragile, bank run, basic income, behavioural economics, Bernie Sanders, Bertrand Russell: In Praise of Idleness, Black Lives Matter, Black Swan, Boris Johnson, British Empire, carbon tax, centre right, collective bargaining, cryptocurrency, David Graeber, declining real wages, degrowth, deindustrialization, Donald Trump, Elon Musk, Fellow of the Royal Society, financial intermediation, full employment, future of work, gig economy, Gunnar Myrdal, housing crisis, hydraulic fracturing, income inequality, independent contractor, intangible asset, Jeremy Corbyn, job automation, job satisfaction, Joi Ito, labour market flexibility, land value tax, libertarian paternalism, low skilled workers, lump of labour, Marc Benioff, Mark Zuckerberg, Martin Wolf, mass immigration, mass incarceration, moral hazard, Nelson Mandela, nudge theory, offshore financial centre, open economy, Panopticon Jeremy Bentham, Paul Samuelson, plutocrats, precariat, quantitative easing, randomized controlled trial, rent control, rent-seeking, Salesforce, Sam Altman, self-driving car, shareholder value, sharing economy, Silicon Valley, sovereign wealth fund, Stephen Hawking, The Future of Employment, universal basic income, Wolfgang Streeck, women in the workforce, working poor, Y Combinator, Zipcar

This would boost profits (because the firm would pay out less in wages), which (through the profit-sharing arrangement) would generate funds for the council to finance the basic income. It is a complex scheme, but is illustrative of the ingenuity that could shape a new system. Sovereign Wealth Funds and Social Dividends The financing option favoured by this writer would be to fund a basic income from the construction of sovereign wealth funds, along the lines of the Alaska Permanent Fund or the Norwegian Pension Fund. This option, which draws on the work of Nobel Prize winner James Meade in his book Agathatopia, would allow a country to build up the fund over the years and raise the amount paid out as basic income, or social dividend, as the fund developed.32 Viewed as a rightful share of income flowing from our collective wealth, the social dividend approach is politically attractive since it would not require either dismantling existing welfare systems or raising taxes on earned income.

In the Indian case, and probably elsewhere as well, there would be no need to introduce a basic income as an alternative to existing social programmes. A third method of funding is through the sovereign wealth fund, social dividend route mentioned in Chapter 7. This is eminently suited to developing countries rich in oil and other minerals, or valuable commodities such as timber, the revenues from which go mainly to rent-seeking elites. Many have already set up sovereign wealth funds, but these have been used mainly as investment vehicles to help stabilize future government finances. In Goa, India, the Goenchi Mati Movement is pressing for the proceeds of iron ore mining to go into a permanent fund, similar to Alaska’s Permanent Fund, which would be used to finance a citizen’s dividend.

That said, if basic income could be financed in part from reductions in non-welfare spending programmes, including cuts in regressive subsidies and selective tax breaks, tax rates might not need to rise by much, if at all. And this does not take account of possible new sources of finance, such as a sovereign wealth fund, a carbon tax or a financial transactions tax. Housing Costs Most basic income calculations for the UK envisage needs-based supplements for disability, but have reluctantly concluded that housing costs would have to be treated separately, as the existing social security system does now.


pages: 348 words: 102,438

Green and Prosperous Land: A Blueprint for Rescuing the British Countryside by Dieter Helm

3D printing, Airbnb, Anthropocene, barriers to entry, biodiversity loss, British Empire, carbon tax, clean water, conceptual framework, corporate social responsibility, Crossrail, decarbonisation, deindustrialization, demographic transition, Diane Coyle, digital map, facts on the ground, food miles, Haber-Bosch Process, high-speed rail, illegal immigration, Internet of things, Kickstarter, land reform, mass immigration, microplastics / micro fibres, New Urbanism, North Sea oil, precautionary principle, precision agriculture, quantitative easing, rewilding, smart meter, sovereign wealth fund, the built environment, Tragedy of the Commons, urban planning, urban sprawl

Winning the prize, and making sure we hang on to it, requires cementing the money into a comprehensive and integrated framework. Chapter 10 sets out how to do this within a Nature Fund. This acts a bit like sovereign wealth funds do for oil- and gas-producing countries. It should include the economic rents from these non-renewable activities like North Sea oil and gas production, mirroring other sovereign wealth funds, but it can also bring together the monies from pollution taxes and charges, from subsidies directed towards public goods and the net gain payments. Crucially it would be for nature, not general public spending.

Looking after the future The helpful analogy here is with the sovereign wealth funds that many countries that are depleting non-renewable resources have set up. The poster example is Norway. It has abundant oil and gas that it is extracting now. These resources will run out, or if we decarbonise effectively, the market for them will fall away.5 It would be unfair for the current generation to reap all the benefits of the oil and gas production and for the next generation to get the global warming that results. It is a non-renewable resource. It can be used only once. So the Norwegians put the surplus economic rents into their sovereign wealth fund for the benefit of future generations.

Designing a Nature Fund A national Nature Fund requires: a credible institutional structure and governance arrangements that can withstand short-term pressures to raid it; a short- and medium-term budgeting framework; and a mechanism for deciding how to spend the money. The most difficult bits are its statutory status and its governance. It is where almost all sovereign wealth funds fall down, for the simple reason that in adversity it is politically almost always expedient to plunder it. The Saudi Arabian oil fund has already been depleted by around half since the oil prices fell in 2014, and the Russian fund has been similarly depleted for short-term purposes. Indeed, Norway is probably the only example of a sovereign wealth fund that has avoided being raided for short-term expediency, and it is a special case in that there are only around 4 to 5 million Norwegians, and 3 per cent per annum provides for a lot of government general expenditure relative to this small population.


Mastering Private Equity by Zeisberger, Claudia,Prahl, Michael,White, Bowen, Michael Prahl, Bowen White

Alan Greenspan, asset allocation, backtesting, barriers to entry, Basel III, Bear Stearns, book value, business process, buy low sell high, capital controls, carbon credits, carried interest, clean tech, commoditize, corporate governance, corporate raider, correlation coefficient, creative destruction, currency risk, deal flow, discounted cash flows, disintermediation, disruptive innovation, distributed generation, diversification, diversified portfolio, family office, fixed income, high net worth, impact investing, information asymmetry, intangible asset, junk bonds, Lean Startup, low interest rates, market clearing, Michael Milken, passive investing, pattern recognition, performance metric, price mechanism, profit maximization, proprietary trading, risk tolerance, risk-adjusted returns, risk/return, Savings and loan crisis, shareholder value, Sharpe ratio, Silicon Valley, sovereign wealth fund, statistical arbitrage, time value of money, transaction costs, two and twenty

Some of the institutional investor holdouts—namely, Norway’s pension plan and Japan’s GPIF—recently announced policy changes that allow them to add PE to their investable universe, thereby joining other public and private pension plans and sovereign wealth funds in addition to family offices and high-net worth individuals in their desire to invest in funds backed by the best GPs. Pension plans will continue to be enthusiastic allocators to PE given that they face underfunding issues (by some estimates as high as $5 trillion4). Existing sovereign wealth funds added US$1 trillion in investable assets between 2013 and 2015 alone5 and new sovereign funds continue to be launched, mainly in the emerging markets.

This has made them an attractive target for large institutional investors with a long-term investment horizon and an appetite for cash distributions to offset regular funding demands from their investment programs. Real asset investments also provide an effective hedge against inflation, as the real asset pricing risk is effectively transferred to the consumer. Sovereign wealth funds and pension plans have also begun to invest directly6 in mature infrastructure and real estate projects, thereby competing with the general partners at PE firms. It is therefore little surprise that the assets under management in the alternative asset classes listed below have grown steadily in recent years.7 REAL ESTATE: Real estate funds employ three main strategies—core-plus, value-add and opportunistic—and invest across the four main subsectors of real estate: residential, office, retail and industrial properties.

More and more institutional investors are looking for GPs offering an integrated, global investment approach across primary, direct and secondary investments in order to more effectively mitigate the J-curve effect, reduce underlying fees, provide earlier distributions and enhance liquidity. More often than not, public and private pension funds, sovereign wealth funds or other institutional investors demand a customized mandate solution which can be implemented via comingled funds or via direct lines. Direct lines are allocations to a single investment through client-specific vehicles; they can cater for specific investment demands, such as: an accelerated private markets portfolio ramp-up to reach a desired target allocation, meeting specific responsible investment criteria, yield vs. capital-appreciation focused portfolios, or following a dynamic, and point-in-time specific relative value investment approach where the relative value may be characterized by region, type of investment, financing stage, and at a more granular level, identifying areas where assets benefit from transformative growth.


pages: 229 words: 75,606

Two and Twenty: How the Masters of Private Equity Always Win by Sachin Khajuria

"World Economic Forum" Davos, affirmative action, bank run, barriers to entry, Big Tech, blockchain, business cycle, buy and hold, carried interest, COVID-19, credit crunch, data science, decarbonisation, disintermediation, diversification, East Village, financial engineering, gig economy, glass ceiling, high net worth, hiring and firing, impact investing, index fund, junk bonds, Kickstarter, low interest rates, mass affluent, moral hazard, passive investing, race to the bottom, random walk, risk/return, rolodex, Rubik’s Cube, Silicon Valley, sovereign wealth fund, two and twenty, Vanguard fund, zero-sum game

Put simply, they now rely on private equity firms to manage their money. People are living longer and the global population is increasing, and with these demographic trends come political and social imperatives to maintain pension entitlements and to invest wisely for retirees. To keep producing retirement income. Sovereign wealth funds, high-net-worth families, and large college endowments need to preserve and grow assets for the benefit of future generations. They cannot afford to get it wrong. Consider, for example, a retirement system for public sector employees that consistently needs annual investment returns of around seven percent.

David has the heady task of compiling data across the Firm on how this master plan is going and analyzing the financial impact on the Firm’s current trajectory. * * * — There are two parts to Endgame, David’s assigned project. Both strategies aim to increase the Firm’s penetration of the total amount of money available to invest from pension funds, sovereign wealth funds, insurance companies, and high-net-worth families—and ultimately from mom-and-pop investors too, who can’t currently invest in the Firm’s funds directly. The Firm estimates that the potential pool of this cash is tens of trillions of untapped dollars. The first part of the project team’s strategy is developing platforms that do not offer a natural or preset moment when investors’ money is to be withdrawn or redeemed.

The Firm’s mission is to tap into the tens of trillions of dollars of retail money that might be up for grabs—if only the law would allow it—without regulation that might make it too burdensome to go down this road. Protecting ordinary workers’ monthly savings is of paramount concern. And so, David is tasked with amalgamating ideas from across the Firm, and its government lobbying and regulatory advisors, on how complicated funds for sophisticated investors such as sovereign wealth funds could be adapted to a retail audience. Perhaps the funds could be regulated more tightly, but not restrictively in a way that would impede the work of the investment professionals. Perhaps mom and pop could benefit from due diligence conducted by richer investors and somehow rely on it for their own purposes.


pages: 354 words: 105,322

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis by James Rickards

"World Economic Forum" Davos, Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, asset allocation, asset-backed security, bank run, banking crisis, barriers to entry, Bayesian statistics, Bear Stearns, behavioural economics, Ben Bernanke: helicopter money, Benoit Mandelbrot, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Black Monday: stock market crash in 1987, Black Swan, blockchain, Boeing 747, Bonfire of the Vanities, Bretton Woods, Brexit referendum, British Empire, business cycle, butterfly effect, buy and hold, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, cellular automata, cognitive bias, cognitive dissonance, complexity theory, Corn Laws, corporate governance, creative destruction, Credit Default Swap, cuban missile crisis, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, debt deflation, Deng Xiaoping, disintermediation, distributed ledger, diversification, diversified portfolio, driverless car, Edward Lorenz: Chaos theory, Eugene Fama: efficient market hypothesis, failed state, Fall of the Berlin Wall, fiat currency, financial repression, fixed income, Flash crash, floating exchange rates, forward guidance, Fractional reserve banking, G4S, George Akerlof, Glass-Steagall Act, global macro, global reserve currency, high net worth, Hyman Minsky, income inequality, information asymmetry, interest rate swap, Isaac Newton, jitney, John Meriwether, John von Neumann, Joseph Schumpeter, junk bonds, Kenneth Rogoff, labor-force participation, large denomination, liquidity trap, Long Term Capital Management, low interest rates, machine readable, mandelbrot fractal, margin call, market bubble, Mexican peso crisis / tequila crisis, Minsky moment, Money creation, money market fund, mutually assured destruction, Myron Scholes, Naomi Klein, nuclear winter, obamacare, offshore financial centre, operational security, Paul Samuelson, Peace of Westphalia, Phillips curve, Pierre-Simon Laplace, plutocrats, prediction markets, price anchoring, price stability, proprietary trading, public intellectual, quantitative easing, RAND corporation, random walk, reserve currency, RFID, risk free rate, risk-adjusted returns, Robert Solow, Ronald Reagan, Savings and loan crisis, Silicon Valley, sovereign wealth fund, special drawing rights, stock buybacks, stocks for the long run, tech billionaire, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Thomas Bayes, Thomas Kuhn: the structure of scientific revolutions, too big to fail, transfer pricing, value at risk, Washington Consensus, We are all Keynesians now, Westphalian system

Treasury feared that impaired bank capital would spook investors and reignite the panic that emerged in the summer. Paulson quietly arranged for a backdoor bank bailout using sovereign wealth funds and foreign banks as fresh capital sources. On November 26, 2007, Citigroup announced the sale of 4.9 percent of its equity for $7.5 billion to the Abu Dhabi Investment Authority. On December 19, 2007, Morgan Stanley announced the sale of $5 billion of equity to the China Investment Corporation. On December 25, 2007, Temasek, a sovereign wealth fund of Singapore, announced it was buying $4.4 billion of stock in Merrill Lynch with an option to buy more. This deal flurry and other similar deals were designed to put on a brave face and convince investors that all was well in the U.S. banking sector.

This deal flurry and other similar deals were designed to put on a brave face and convince investors that all was well in the U.S. banking sector. In fact, U.S. banks were rotten to the core, and sovereign wealth funds were played for suckers by Paulson and the bankers. Within a year, tens of billions of sovereign wealth fund money, held in trust for everyday citizens in emerging markets, would go up in smoke. Still, in the short run it was mission accomplished for the Bush administration. Markets entered 2008 with renewed confidence that the crisis was past. The deceptive calm in the winter of 2008 bore an eerie resemblance to the winter of 1998.

In the next panic, government will say, in effect, “No, you can’t have your money. The system is closed. Let us sort things out, and we’ll get back to you.” Money locked down at BlackRock is not their money, it’s their clients’. BlackRock manages funds for the largest institutions in the world such as CIC, the Chinese sovereign wealth fund, and CALPERS, the pension fund for government employees in California. A freeze on BlackRock means you are freezing sales by China, California, and other jurisdictions around the world. The U.S. government has no authority to tell China not to sell securities. But because China entrusts assets to BlackRock, the government would use its power over BlackRock to freeze the Chinese.


pages: 251 words: 76,868

How to Run the World: Charting a Course to the Next Renaissance by Parag Khanna

"World Economic Forum" Davos, Albert Einstein, Asian financial crisis, back-to-the-land, bank run, blood diamond, Bob Geldof, borderless world, BRICs, British Empire, call centre, carbon footprint, carbon tax, charter city, clean tech, clean water, cloud computing, commoditize, congestion pricing, continuation of politics by other means, corporate governance, corporate social responsibility, Deng Xiaoping, Doha Development Round, don't be evil, double entry bookkeeping, energy security, European colonialism, export processing zone, facts on the ground, failed state, financial engineering, friendly fire, global village, Global Witness, Google Earth, high net worth, high-speed rail, index fund, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Kickstarter, Kiva Systems, laissez-faire capitalism, Live Aid, Masdar, mass immigration, megacity, Michael Shellenberger, microcredit, military-industrial complex, mutually assured destruction, Naomi Klein, Nelson Mandela, New Urbanism, no-fly zone, off grid, offshore financial centre, oil shock, One Laptop per Child (OLPC), open economy, out of africa, Parag Khanna, private military company, Productivity paradox, race to the bottom, RAND corporation, reserve currency, Salesforce, Silicon Valley, smart grid, South China Sea, sovereign wealth fund, special economic zone, sustainable-tourism, Ted Nordhaus, The Fortune at the Bottom of the Pyramid, The Wisdom of Crowds, too big to fail, trade liberalization, trickle-down economics, UNCLOS, uranium enrichment, Washington Consensus, X Prize

Undoubtedly, we witnessed a strong “return of the state” in the aftermath of the 2008 financial crisis, with leading governments pumping out $3 trillion of economic stimulus—about 5 percent of global gross domestic product (GDP). Some states are also flexing their muscles in creative ways: Chinese state-owned companies are buying up natural resources across Africa; Arab sovereign wealth funds determine which countries and companies to bail out and what assets they want in return; and Russian oil czars and Saudi Aramco dictate oil prices and pipeline routes. But even strong states act in multiple, distinct ways. Saudi Arabia has two foreign policies: that of the House of Saud and that of the radical Wahhabi clerics and Islamist charities.

Whether rich or poor, cities, more than nations, are the building blocks of global activity today. Our world is more a network of villages than it is one global village. Alliances of these agile cities, like the medieval Hanseatic League of the Baltic Sea, are forming. They will use their sovereign wealth funds to acquire the latest technology from the West, buy up tracts of agricultural land in Africa to grow their food, and protect their investments through private armies and intelligence services. Hamburg and Dubai have forged a partnership to boost shipping links and life sciences research, while Abu Dhabi and Singapore have developed into a new commercial axis as well.

The United States wants Asians to reverse an innate savings culture and more than a decade of insuring themselves against economic volatility by suddenly becoming voracious consumers. But Asians have heard enough hypocrisy from the high priests of Western finance. As America has gone from the lender of last resort to the world’s leading debtor, they won’t listen to its leaders’ denunciation of high savings rates and their suspicion of sovereign wealth funds—which they quietly begged for bailouts when corporate America tanked. Importantly, at the same Davos meeting, both American and Chinese leaders confessed they are looking to continental Europe for inspiration on how to manage a balance between economic growth and social security. For decades, Europe has been building world-class infrastructure and generous welfare systems, and reducing inequality while merging into the world’s largest trading block.


pages: 466 words: 127,728

The Death of Money: The Coming Collapse of the International Monetary System by James Rickards

"World Economic Forum" Davos, Affordable Care Act / Obamacare, Alan Greenspan, Asian financial crisis, asset allocation, Ayatollah Khomeini, bank run, banking crisis, Bear Stearns, Ben Bernanke: helicopter money, bitcoin, Black Monday: stock market crash in 1987, Black Swan, Boeing 747, Bretton Woods, BRICs, business climate, business cycle, buy and hold, capital controls, Carmen Reinhart, central bank independence, centre right, collateralized debt obligation, collective bargaining, complexity theory, computer age, credit crunch, currency peg, David Graeber, debt deflation, Deng Xiaoping, diversification, Dr. Strangelove, Edward Snowden, eurozone crisis, fiat currency, financial engineering, financial innovation, financial intermediation, financial repression, fixed income, Flash crash, floating exchange rates, forward guidance, G4S, George Akerlof, global macro, global reserve currency, global supply chain, Goodhart's law, Growth in a Time of Debt, guns versus butter model, Herman Kahn, high-speed rail, income inequality, inflation targeting, information asymmetry, invisible hand, jitney, John Meriwether, junk bonds, Kenneth Rogoff, labor-force participation, Lao Tzu, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, low interest rates, mandelbrot fractal, margin call, market bubble, market clearing, market design, megaproject, Modern Monetary Theory, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mutually assured destruction, Nixon triggered the end of the Bretton Woods system, obamacare, offshore financial centre, oil shale / tar sands, open economy, operational security, plutocrats, Ponzi scheme, power law, price stability, public intellectual, quantitative easing, RAND corporation, reserve currency, risk-adjusted returns, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Satoshi Nakamoto, Silicon Valley, Silicon Valley startup, Skype, Solyndra, sovereign wealth fund, special drawing rights, Stuxnet, The Market for Lemons, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, too big to fail, trade route, undersea cable, uranium enrichment, Washington Consensus, working-age population, yield curve

This classified plan, called “Air-Sea Battle,” involves blinding China’s surveillance capabilities and precision missiles, followed up with massive air power and naval attacks. On this occasion, Marshall was not being briefed on kinetic weapons or air-sea tactics. He was hearing about sovereign wealth funds, stealth gold acquisition, and potential threats to national security caused by U.S. Federal Reserve policy. China has over $3 trillion of investments denominated in U.S. dollars, and every 10 percent devaluation in the dollar engineered by the Fed represents a $300 billion real wealth transfer from China to the United States.

In effect, China was using London bankers as a front operation to continue buying U.S. Treasury notes while Beijing officially reported that it was selling. Another technique China uses to disguise its market intelligence operations was reported on May 20, 2007, in The New York Times when Andrew Ross Sorkin disclosed that the China Investment Corporation (CIC), another sovereign wealth fund, had agreed to purchase $3 billion of stock in Blackstone Group, the powerful and secretive U.S.-based private equity firm. Blackstone Group was cofounded by former Nixon administration senior official Peter G. Peterson, later chairman of both the Council on Foreign Relations and the Federal Reserve Bank of New York.

This was revealed in an IMF study released in January 2011, consisting of a multiyear, multistep plan to position the SDR as the leading global reserve asset. The study recommends increasing the SDR supply to make them liquid and more attractive to potential private-sector market participants such as Goldman Sachs and Citigroup. Importantly, the study recognizes the need for natural sellers of SDR-denominated bonds such as Volkswagen and IBM. Sovereign wealth funds are recommended as the most likely SDR bond buyers for currency diversification reasons. The IMF study recommends that the SDR bond market replicate the infrastructure of the U.S. Treasury market, with hedging, financing, settlement, and clearance mechanisms substantially similar to those used to support trading in Treasury securities today.


Super Continent: The Logic of Eurasian Integration by Kent E. Calder

"World Economic Forum" Davos, 3D printing, air freight, Asian financial crisis, Bear Stearns, Berlin Wall, blockchain, Bretton Woods, business intelligence, capital controls, Capital in the Twenty-First Century by Thomas Piketty, classic study, cloud computing, colonial rule, Credit Default Swap, cuban missile crisis, deindustrialization, demographic transition, Deng Xiaoping, disruptive innovation, Doha Development Round, Donald Trump, energy transition, European colonialism, export processing zone, failed state, Fall of the Berlin Wall, foreign exchange controls, geopolitical risk, Gini coefficient, high-speed rail, housing crisis, income inequality, industrial cluster, industrial robot, interest rate swap, intermodal, Internet of things, invention of movable type, inventory management, John Markoff, liberal world order, Malacca Straits, Mikhail Gorbachev, mittelstand, money market fund, moral hazard, new economy, oil shale / tar sands, oil shock, purchasing power parity, quantitative easing, reserve currency, Ronald Reagan, seigniorage, Shenzhen special economic zone , smart cities, smart grid, SoftBank, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, Suez canal 1869, Suez crisis 1956, supply-chain management, Thomas L Friedman, trade liberalization, trade route, transcontinental railway, UNCLOS, UNCLOS, union organizing, Washington Consensus, working-age population, zero-sum game

See, for example, Kyle Ferrier, “How a Northeast Asian Development Bank Could Succeed,” Korea Economic Institute of America, http://​keia​.org/​how​-northeast​ -asian​-development​-bank​-could​-succeed; as well as Lee-Jay Cho and S. Stanley Katz, “A Northeast Asian Development Bank?” NIRA Review (Winter 2001): 41. 72. China Investment Corporation, the second largest sovereign wealth fund in the world, possessed $941 billion in assets as of August 2018, and SAFE Investment Company (seventh largest) had $441 billion in assets. See Sovereign Wealth Fund Institute, “Sovereign Wealth Fund Rankings,” updated August 2018, https://​www​.swfinstitute​.org/​ sovereign​-wealth​-fund​-rankings/. 73. See “Boao Forum for Asia Annual Conference 2009 Opens: Wen Jiabao Attends the Conference and Delivers a Keynote Speech,” Ministry of Foreign Affairs of the People’s Republic of China, April 18, 2009, http://​www​.fmprc​.gov​.cn/​mfa​_eng/​wjdt​_665385/​zyjh​ _665391/​t558306​.shtml. 74.

It is in this connection that the proposals by China (the Asian Infrastructure Investment Bank, AIIB) and the BRICS countries (the New Development Bank, NDB) are so interesting. These initiatives are grounded in the massive foreign-exchange reserves of China, totaling over $3 trillion when the proposals were formally made and supported by over $1.3 trillion in Chinese sovereign wealth funds and informal reserves.72 Yet they also involve substantial cooperation from outside China, which will be crucial to the ultimate success of the BRI, given the ambitiousness of its developmental goals. Questions remain about the transparency of the new institutions and their lack of working-level expertise.

One of the key institutions for explicitly furthering interdependence is the China Development Bank (CDB, founded 1994), which now has provenance of a quarter century. CDB, with total assets close to RMB 16 trillion (around $2.3 trillion), is now the largest development lender in the entire world, substantially exceeding the World Bank.15 China’s major government and semigovernmental banks, as well as sovereign wealth funds, have strongly supported these new investment vehicles. Indeed, the CDB alone has loaned more than $110 billion to BRI countries.16 And the Big Four state-owned commercial banks have lent at least $150 billion more.17 In addition, the China Securities Regulatory Commission has approved applications from seven domestic and foreign companies to issue a combined 50 billion yuan of “Belt and Road” bonds through the Shanghai and Shenzhen stock exchanges.18 Since the advent of the BRI, there has also been a further rapid proliferation of new institutions to support connectivity, including the Silk Road Fund (SRF, 2014) and the Asian Infrastructure Investment Bank (AIIB, 2016).


pages: 526 words: 158,913

Crash of the Titans: Greed, Hubris, the Fall of Merrill Lynch, and the Near-Collapse of Bank of America by Greg Farrell

"World Economic Forum" Davos, Airbus A320, Apple's 1984 Super Bowl advert, bank run, banking crisis, Bear Stearns, Black Monday: stock market crash in 1987, bonus culture, call centre, Captain Sullenberger Hudson, collapse of Lehman Brothers, collateralized debt obligation, compensation consultant, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, financial engineering, financial innovation, fixed income, glass ceiling, Glass-Steagall Act, high net worth, junk bonds, Ken Thompson, Long Term Capital Management, mass affluent, Mexican peso crisis / tequila crisis, Michael Milken, Nelson Mandela, plutocrats, Ronald Reagan, six sigma, sovereign wealth fund, technology bubble, too big to fail, US Airways Flight 1549, yield curve

Fleming described the firm’s capital position, which had been dented by the losses reported in October. Obviously, Merrill Lynch would need to raise new capital, and the men brainstormed to come up with potential investors. Wetzel knew that Temasek, the sovereign wealth fund of Singapore, was always looking for big investment opportunities in U.S. finance. He also knew that Mizuho, a Japanese bank, would be a good candidate to invest in Merrill Lynch. Orcel thought some of the sovereign wealth funds of the Middle East would be interested, along with some major European banks. The men began seeding the ground with the potential investors, letting them know that the arrival of the next chief executive at Merrill Lynch would create a terrific opportunity for a select group of large players to buy in to the firm at a relatively low price.

WHEN THAIN ARRIVED AT the office on Monday, December 3—his first official day on the job—Wetzel, one of the investment bankers called to New York by Fleming, presented him with several fundraising options, including the sale of Merrill’s 20 percent stake in Bloomberg, and its 49 percent stake in BlackRock. Wetzel said he had already started conversations with Temasek, the sovereign wealth fund of Singapore, and Mizuho, the Japanese bank, about equity investments in Merrill Lynch. “Great, let’s go with those,” Thain said, indicating he wanted to raise capital from outside investors, not sell off the stakes in Bloomberg or BlackRock. A few days later, Thain had breakfast with Bob McCann, the head of Merrill Lynch’s financial advisors, the business which set the firm apart from its competitors.

In the longer term, Thain had a choice to make: sell the CDO positions at a loss or hold them for a while until the market rebounded. One problem was that Merrill Lynch didn’t even know what its CDO holdings were worth, which is why Jeff Kronthal had been brought back as a consultant. Over the first few weeks of December, a team of bankers from Temasek, the sovereign wealth fund of Singapore, studied Merrill’s financials and consulted frequently with Thain and Wetzel. Wetzel, who didn’t want the parade of outside investors to be seen by scores of Merrill’s own employees, designated the boardroom on the thirty-third floor as the place for sensitive fundraising meetings.


pages: 460 words: 130,820

The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion by Eliot Brown, Maureen Farrell

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Adam Neumann (WeWork), Airbnb, AOL-Time Warner, asset light, Bear Stearns, Bernie Madoff, Burning Man, business logic, cloud computing, coronavirus, corporate governance, COVID-19, Didi Chuxing, do what you love, don't be evil, Donald Trump, driverless car, East Village, Elon Musk, financial engineering, Ford Model T, future of work, gender pay gap, global pandemic, global supply chain, Google Earth, Gordon Gekko, greed is good, Greensill Capital, hockey-stick growth, housing crisis, index fund, Internet Archive, Internet of things, Jeff Bezos, John Zimmer (Lyft cofounder), Larry Ellison, low interest rates, Lyft, Marc Benioff, Mark Zuckerberg, Masayoshi Son, Maui Hawaii, Network effects, new economy, PalmPilot, Peter Thiel, pets.com, plant based meat, post-oil, railway mania, ride hailing / ride sharing, Robinhood: mobile stock trading app, rolodex, Salesforce, San Francisco homelessness, Sand Hill Road, self-driving car, sharing economy, Sheryl Sandberg, side hustle, side project, Silicon Valley, Silicon Valley startup, smart cities, Snapchat, SoftBank, software as a service, sovereign wealth fund, starchitect, Steve Jobs, subprime mortgage crisis, super pumped, supply chain finance, Tim Cook: Apple, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, vertical integration, Vision Fund, WeWork, women in the workforce, work culture , Y Combinator, Zenefits, Zipcar

Saudi Arabia had indeed committed $45 billion to Masayoshi Son for the Vision Fund, but it’s not as if the country had unlimited stores of scores of billions lying around. The entire size of the country’s sovereign wealth fund—the bulk of the money the country had to invest—was $230 billion as of 2017. Aides traveled to Saudi Arabia to show off the plans for a $100 billion fund, though no deal ever materialized. Other candidates were an array of top mutual funds, sovereign wealth funds, and banks. The fund-raising plan was to go along with another round of investment WeWork was planning for the business, but an internal presentation urged those involved to tell investors WeWork didn’t need the money; it was just trying to get more investors into the fold before a future IPO.

It would take a head of state, or close to it—a leader with immense power willing to put enormous trust in Son and his vision to help grow the nation’s wealth. That narrowed the list further. There were only a few such candidates in the entire world. * * * — Rich on fossil fuels and light on democracy, the Middle East’s cluster of monarch-led petrostates—the United Arab Emirates, Qatar, and Saudi Arabia—each had giant sovereign wealth funds that could theoretically devote tens of billions to an investment they truly believed in. Son initially set his sights on Qatar, a tiny landmass in the Persian Gulf physically smaller than the state of Massachusetts but filled with wealth from natural gas. On the private jet ride to pitch the Qataris, Son was paging through his presentation.

To give it worldwide prominence, he was said to favor the New York Stock Exchange as the trading venue, putting the kingdom on the global economic stage. By selling shares through an IPO, he said, the kingdom should be able to raise roughly one hundred billion dollars to plow into the country’s sovereign wealth fund, which would invest in other businesses around the globe. “Undoubtedly, it will be the largest fund on Earth,” he told Bloomberg that April. Suddenly, based on what many saw as an impulsive announcement by a young, power-hungry royal, Saudi Arabia was the most significant potential client in the world for Wall Street banks and giant fund managers, who quickly sought ways to get to know the prince.


pages: 689 words: 134,457

When McKinsey Comes to Town: The Hidden Influence of the World's Most Powerful Consulting Firm by Walt Bogdanich, Michael Forsythe

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Alistair Cooke, Amazon Web Services, An Inconvenient Truth, asset light, asset-backed security, Atul Gawande, Bear Stearns, Boris Johnson, British Empire, call centre, Cambridge Analytica, carbon footprint, Citizen Lab, cognitive dissonance, collective bargaining, compensation consultant, coronavirus, corporate governance, corporate social responsibility, Corrections Corporation of America, COVID-19, creative destruction, Credit Default Swap, crony capitalism, data science, David Attenborough, decarbonisation, deindustrialization, disinformation, disruptive innovation, do well by doing good, don't be evil, Donald Trump, double entry bookkeeping, facts on the ground, failed state, financial engineering, full employment, future of work, George Floyd, Gini coefficient, Glass-Steagall Act, global pandemic, illegal immigration, income inequality, information security, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), invisible hand, job satisfaction, job-hopping, junk bonds, Kenneth Arrow, Kickstarter, load shedding, Mark Zuckerberg, megaproject, Moneyball by Michael Lewis explains big data, mortgage debt, Multics, Nelson Mandela, obamacare, offshore financial centre, old-boy network, opioid epidemic / opioid crisis, profit maximization, public intellectual, RAND corporation, Rutger Bregman, scientific management, sentiment analysis, shareholder value, Sheryl Sandberg, Silicon Valley, smart cities, smart meter, South China Sea, sovereign wealth fund, tech worker, The future is already here, The Nature of the Firm, too big to fail, urban planning, WikiLeaks, working poor, Yogi Berra, zero-sum game

Operating in more than sixty-five countries, they can whisper in the ears of despots and elected leaders alike. In fifteen of those countries, the firm has advised the military, police and defense, and justice ministries. Its consultants have weighed in on the maintenance and support of “armored personnel carriers; minesweepers, destroyers and submarines.” Nations hire McKinsey to advise sovereign wealth funds worth more than $1 trillion. McKinsey’s own robust earnings make it possible for the firm to run a private hedge fund for senior partners, with large parts of its roughly $31.5 billion in assets under management concealed behind a tangle of shell companies on an island tax haven in the English Channel.

McKinsey’s reputation is enhanced by the success of its former consultants, including Tom Cotton, the conservative U.S. senator from Arkansas; Pete Buttigieg, U.S. secretary of transportation; Bobby Jindal, former governor of Louisiana; Sheryl Sandberg of Facebook; Lou Gerstner of IBM and American Express; and James P. Gorman of Morgan Stanley and Merrill Lynch. Outside the United States, McKinsey’s alumni have also reached exalted positions, including Kirill Dmitriev, head of Russia’s sovereign wealth fund; William Hague, Britain’s former foreign secretary; and the former Credit Suisse CEO Tidjane Thiam. Although the firm is named after its founder, James O. McKinsey, its spiritual leader was Marvin Bower, who joined the consultancy in 1933, ushering in an era of professionalism patterned after the prestigious Cleveland law firm where he once worked.

Another McKinsey project left little to the imagination: “Drill and Blast.” After a year on the job at Teck, Barton was appointed Canada’s ambassador to China, which produces half of the world’s steel, and with it significant pollution. Some of that steel is made with Teck coal. China’s sovereign wealth fund owns Teck stock, and a former senior Chinese diplomat sits on its board of directors. Teck says it is aiming to be carbon neutral by 2050. Barton left Teck, but McKinsey consultants remained and continued to collect millions of dollars in fees. * * * — In 2021, as the world economy recovered from the COVID-induced slowdown, carbon emissions bounced back as well.


pages: 269 words: 70,543

Tech Titans of China: How China's Tech Sector Is Challenging the World by Innovating Faster, Working Harder, and Going Global by Rebecca Fannin

"World Economic Forum" Davos, Adam Neumann (WeWork), Airbnb, augmented reality, autonomous vehicles, Benchmark Capital, Big Tech, bike sharing, blockchain, call centre, cashless society, Chuck Templeton: OpenTable:, clean tech, cloud computing, computer vision, connected car, corporate governance, cryptocurrency, data is the new oil, data science, deep learning, Deng Xiaoping, Didi Chuxing, digital map, disruptive innovation, Donald Trump, El Camino Real, electricity market, Elon Musk, fake news, family office, fear of failure, fulfillment center, glass ceiling, global supply chain, Great Leap Forward, income inequality, industrial robot, information security, Internet of things, invention of movable type, Jeff Bezos, Kickstarter, knowledge worker, Lyft, Mark Zuckerberg, Mary Meeker, megacity, Menlo Park, money market fund, Network effects, new economy, peer-to-peer lending, personalized medicine, Peter Thiel, QR code, RFID, ride hailing / ride sharing, Sand Hill Road, self-driving car, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Skype, smart cities, smart transportation, Snapchat, social graph, SoftBank, software as a service, South China Sea, sovereign wealth fund, speech recognition, stealth mode startup, Steve Jobs, stock buybacks, supply-chain management, tech billionaire, TechCrunch disrupt, TikTok, Tim Cook: Apple, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, urban planning, Vision Fund, warehouse automation, WeWork, winner-take-all economy, Y Combinator, young professional

The fund’s assets have since downsized to $168 billion following pressure by Chinese regulators and concerns of systemic liquidity risks to the entire banking market.10 Ant Financial made big news again when it hauled in the largest-ever single fund-raising by a private company: an eye-popping $14 billion investment in 2018 at a valuation of about $150 billion from US private equity firms Carlyle Group, Silver Lake Partners, Warburg Pincus, and General Atlantic, as well as Singaporean sovereign wealth fund GIC. In a sign of the intense competition in China and the power of Alibaba, investors in that round for its fintech affiliate had to commit to not making further investments in rival companies controlled by Chinese tech leaders Tencent, JD.com, and Meituan.11 Ant Financial could go public soon, and, if so, this ant will be riding on the coattails of Alibaba’s record $230 billion valuation in its IPO on the NYSE.

Finger Luckin’ Coffee Luckin Coffee is waking up the Chinese coffee market. From opening its first store in January 2018, Luckin, as it’s known, has expanded to 2,000 locations in 30 cities, aiming to surpass Starbucks. Luckin is flush with cash from raising $400 million in 2018 at a unicorn valuation from Singapore sovereign wealth fund GIC, investment banking firm China International Capital Corp., and Joy Capital. The startup recently went public, but there are a lot of questions, particularly about its cash-burning strategy to beat Starbucks. “What we want at the moment is scale and speed,” Luckin’s chief marketing officer Yang Fei said at a Beijing press conference.5 “There’s no point in talking about profit.”

“We believe the era of large-scale profitability of Chinese startups has just begun.” Wei Zhou Founder and managing partner, China Creation Ventures More capital is flowing to proven Chinese venture firms from large US pensions such as CalPERS (California Public Employees’ Retirement System) and CalSTRS (California State Teachers Retirement System); sovereign wealth funds, including Singapore’s Temasek and GIC; rich serial entrepreneurs; family offices; fund of funds; and university endowments, including Yale, Princeton, Northwestern, and Duke. Money also has flowed from Chinese government–backed investor groups into Chinese currency RMB funds that can invest directly in Chinese startups and take them public in China, such as the Nasdaq-style ChiNext in Shenzhen and16,17 the new Shanghai Science & Technology Innovation Board for China’s emerging companies to list.


pages: 197 words: 53,831

Investing to Save the Planet: How Your Money Can Make a Difference by Alice Ross

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, An Inconvenient Truth, barriers to entry, British Empire, carbon footprint, carbon tax, circular economy, clean tech, clean water, coronavirus, corporate governance, COVID-19, creative destruction, decarbonisation, diversification, Elon Musk, energy transition, Extinction Rebellion, family office, food miles, Future Shock, global pandemic, Goldman Sachs: Vampire Squid, green transition, Greta Thunberg, high net worth, hiring and firing, impact investing, Intergovernmental Panel on Climate Change (IPCC), Jeff Bezos, lockdown, low interest rates, Lyft, off grid, oil shock, passive investing, Peter Thiel, plant based meat, precision agriculture, risk tolerance, risk/return, sharing economy, Silicon Valley, social distancing, sovereign wealth fund, TED Talk, Tragedy of the Commons, uber lyft, William MacAskill

Even professional fund managers are sometimes relative minnows as shareholders of larger companies, but they still try to engage. Schroders wrote to Amazon encouraging it to do more on electrification – and in 2019 the company announced that it would move to be net zero by 2040 and have a fleet of 100,000 electric vans. The biggest investors are generally pension funds, sovereign wealth funds and university endowment funds: so-called asset owners, rather than asset managers. Like retail investors, they are looking for the best professionals to manage their money; unlike retail investors, they have so much money they can hire and fire those fund managers. The largest pension fund in the world, for example, the $1.5tn Government Pension Investment Fund of Japan, raised eyebrows in 2019 when it started shifting tens of millions’ worth of assets to LGIM from one of LGIM’s huge rivals, in a move that was widely interpreted as a lack of confidence in the rival’s voting record on climate change at the companies it invested in.

The correct lesson from the failure of cleantech between 2006 and 2011 is that it ‘clearly does not fit the risk, return, or time profiles of traditional venture capital investors. And as a result, the sector requires a more diverse set of actors and innovation models.’ Breakthrough Energy, with its ‘patient capital’ approach, is one such model. Institutional investors like pension funds and sovereign wealth funds, which can wait for decades to make returns but are often inexperienced technology investors, are another source. BEV is probably the most high-profile example of wealthy investors looking to fund start-up technologies in the energy space and beyond to help combat climate change. Clean energy is also a particular area of interest for family offices – investment funds set up and run by wealthy families with the sole purpose of investing their own money.

That’s not about ESG or impact metrics or the personal satisfaction of doing an enormous amount of good, it’s about the real hard unsexy grind of building a company no matter what the industry it’s in.’ Investors have still been happy to buy into Just. Tetrick says that shareholders include the Heineken family, Japanese conglomerate Mitsui, sovereign wealth funds including Singapore’s Temasek, and early-stage venture capital funds including veteran investor Peter Thiel’s Founders Fund. Some of them want a stable source of wealth over the very long term (in the case of Temasek for the citizens of Singapore); others are keen to invest in companies that are attempting to solve environmental problems (in the case of various family offices whose younger members want to change the world); while some simply want to have their finger on the pulse of emerging technologies (in the case of various high-net-worth individuals; the minimum investment in Just, as for many private early-stage companies, is about $1m).


pages: 695 words: 194,693

Money Changes Everything: How Finance Made Civilization Possible by William N. Goetzmann

Albert Einstein, Andrei Shleifer, asset allocation, asset-backed security, banking crisis, Benoit Mandelbrot, Black Swan, Black-Scholes formula, book value, Bretton Woods, Brownian motion, business cycle, capital asset pricing model, Cass Sunstein, classic study, collective bargaining, colonial exploitation, compound rate of return, conceptual framework, Cornelius Vanderbilt, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, debt deflation, delayed gratification, Detroit bankruptcy, disintermediation, diversified portfolio, double entry bookkeeping, Edmond Halley, en.wikipedia.org, equity premium, equity risk premium, financial engineering, financial independence, financial innovation, financial intermediation, fixed income, frictionless, frictionless market, full employment, high net worth, income inequality, index fund, invention of the steam engine, invention of writing, invisible hand, James Watt: steam engine, joint-stock company, joint-stock limited liability company, laissez-faire capitalism, land bank, Louis Bachelier, low interest rates, mandelbrot fractal, market bubble, means of production, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, new economy, passive investing, Paul Lévy, Ponzi scheme, price stability, principal–agent problem, profit maximization, profit motive, public intellectual, quantitative trading / quantitative finance, random walk, Richard Thaler, Robert Shiller, shareholder value, short selling, South Sea Bubble, sovereign wealth fund, spice trade, stochastic process, subprime mortgage crisis, Suez canal 1869, Suez crisis 1956, the scientific method, The Wealth of Nations by Adam Smith, Thomas Malthus, time value of money, tontine, too big to fail, trade liberalization, trade route, transatlantic slave trade, tulip mania, wage slave

The really important issue for Norway is not whether the global investment markets are efficient at the margin but whether transforming geological assets into financial assets makes sense. A NEW ARCHITECTURE Sovereign wealth funds represent a striking new financial innovation that might well realign world economy and diplomacy. Perhaps this is why other countries are getting into the act. Although the trend has been led by the petroleum-producing states, other countries have lately decided to create sovereign wealth funds. Singapore, Korea, China, and Russia have multibillion-dollar funds. Although some of the money for these funds comes from sales of natural resources and taxation, some of it comes from US dollar reserves traditionally held by nations to pay their bills.

They found that over the past thirty years, the trend toward the theoretical ideal has been pronounced—particularly in developed countries.4 Remember Keynes’s prediction that a state investment fund would eventually supplant the individual investor? In some countries, this prediction is becoming a reality through the vehicle of sovereign wealth funds. Sovereign funds started in natural-resource-rich countries that generated government revenue from oil extraction. The Gulf states like Kuwait and Dubai needed vehicles for turning their oil into financial wealth, planning for a time when the oil would run out. A second wave of sovereign funds emerged in countries seeking to profitably invest their central bank reserves.

Would you rather be given the option of setting aside your taxes each week from your salary and then writing a check for the total tax balance due on April 15? In the future, the balance between individual investment freedom and responsibility on the one hand and government-mandated or influenced savings behavior on the other will become central to personal finance. Perhaps sovereign wealth funds will replace personal savings, and the government will use them to fund post-retirement income. It might be the future of Social Security. WHO WILL OWN COMPANIES? A striking fact about sovereign funds is that as they grow, they will inevitably become the largest shareholders of every single publicly traded company in the world.


pages: 524 words: 143,993

The Shifts and the Shocks: What We've Learned--And Have Still to Learn--From the Financial Crisis by Martin Wolf

air freight, Alan Greenspan, anti-communist, Asian financial crisis, asset allocation, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Basel III, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Black Swan, bonus culture, break the buck, Bretton Woods, business cycle, call centre, capital asset pricing model, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collateralized debt obligation, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, debt deflation, deglobalization, Deng Xiaoping, diversification, double entry bookkeeping, en.wikipedia.org, Erik Brynjolfsson, Eugene Fama: efficient market hypothesis, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial deregulation, financial innovation, financial repression, floating exchange rates, foreign exchange controls, forward guidance, Fractional reserve banking, full employment, Glass-Steagall Act, global rebalancing, global reserve currency, Growth in a Time of Debt, Hyman Minsky, income inequality, inflation targeting, information asymmetry, invisible hand, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, Les Trente Glorieuses, light touch regulation, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, low interest rates, mandatory minimum, margin call, market bubble, market clearing, market fragmentation, Martin Wolf, Mexican peso crisis / tequila crisis, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, negative equity, new economy, North Sea oil, Northern Rock, open economy, paradox of thrift, Paul Samuelson, price stability, private sector deleveraging, proprietary trading, purchasing power parity, pushing on a string, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, Richard Feynman, risk-adjusted returns, risk/return, road to serfdom, Robert Gordon, Robert Shiller, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, shareholder value, short selling, sovereign wealth fund, special drawing rights, subprime mortgage crisis, tail risk, The Chicago School, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, too big to fail, Tyler Cowen, Tyler Cowen: Great Stagnation, vertical integration, very high income, winner-take-all economy, zero-sum game

Rogoff, This Time is Different: Eight Centuries of Financial Folly (Princeton and Oxford: Princeton University Press, 2009), pp. 231–2. 8. International Monetary Fund, ‘Currency Composition of Official Foreign Currency Reserves (COFER)’, 30 December 2013, http://www.imf.org/External/np/sta/cofer/eng/index.htm, and Sovereign Wealth Fund Institute, ‘Sovereign Wealth Fund Rankings’, http://www.swfinstitute.org/fund-rankings/. 9. The role of the global imbalances in the crisis was the theme of Martin Wolf, Fixing Global Finance (Baltimore and London: Johns Hopkins University Press, 2008 and 2010), especially ch. 8 of the revised edition. See also Òscar Jordà, Moritz Schularick and Alan M.

Too Big to Fail: Inside the Battle to Save Wall Street (London: Penguin, 2010). Soros, George. The Alchemy of Finance: Reading the Mind of the Market (Hoboken: John Wiley, 2003). Soros, George. The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What it Means (New York: PublicAffairs, 2008). Sovereign Wealth Fund Institute, ‘Sovereign Wealth Fund Rankings’. http://www.swfinstitute.org/fund-rankings. Stein, Herbert. ‘Herb Stein’s Unfamiliar Quotations: On Money, Madness, and Making Mistakes’, Slate, 16 May 1997. www.slate.com. Stiglitz, Joseph E. Freefall: Free Markets and the Sinking of the Global Economy (New York: W.

Among the most important features of the pre-crisis global economy – indeed, one of the causes of the crisis itself – were huge net flows of capital from emerging economies into supposedly safe assets in high-income countries. The governments of emerging countries organized these flows, largely as a result of intervention in currency markets and the consequent accumulations of foreign-currency reserves, which reached $11.4tn at the end of September 2013, quite apart from over $6tn in sovereign wealth funds.8 The recycling of current-account surpluses and private-capital inflows into official capital outflows – described by some as a ‘savings glut’ and by others as a ‘money glut’ – was one of the causes of the crisis. These flows are certainly unsustainable, because high-income countries have proved demonstrably unable to use the money effectively.


pages: 1,088 words: 228,743

Expected Returns: An Investor's Guide to Harvesting Market Rewards by Antti Ilmanen

Alan Greenspan, Andrei Shleifer, asset allocation, asset-backed security, availability heuristic, backtesting, balance sheet recession, bank run, banking crisis, barriers to entry, behavioural economics, Bernie Madoff, Black Swan, Bob Litterman, bond market vigilante , book value, Bretton Woods, business cycle, buy and hold, buy low sell high, capital asset pricing model, capital controls, carbon credits, Carmen Reinhart, central bank independence, classic study, collateralized debt obligation, commoditize, commodity trading advisor, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, deal flow, debt deflation, deglobalization, delta neutral, demand response, discounted cash flows, disintermediation, diversification, diversified portfolio, dividend-yielding stocks, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, fiat currency, financial deregulation, financial innovation, financial intermediation, fixed income, Flash crash, framing effect, frictionless, frictionless market, G4S, George Akerlof, global macro, global reserve currency, Google Earth, high net worth, hindsight bias, Hyman Minsky, implied volatility, income inequality, incomplete markets, index fund, inflation targeting, information asymmetry, interest rate swap, inverted yield curve, invisible hand, John Bogle, junk bonds, Kenneth Rogoff, laissez-faire capitalism, law of one price, London Interbank Offered Rate, Long Term Capital Management, loss aversion, low interest rates, managed futures, margin call, market bubble, market clearing, market friction, market fundamentalism, market microstructure, mental accounting, merger arbitrage, mittelstand, moral hazard, Myron Scholes, negative equity, New Journalism, oil shock, p-value, passive investing, Paul Samuelson, pension time bomb, performance metric, Phillips curve, Ponzi scheme, prediction markets, price anchoring, price stability, principal–agent problem, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, random walk, reserve currency, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, riskless arbitrage, Robert Shiller, savings glut, search costs, selection bias, seminal paper, Sharpe ratio, short selling, sovereign wealth fund, statistical arbitrage, statistical model, stochastic volatility, stock buybacks, stocks for the long run, survivorship bias, systematic trading, tail risk, The Great Moderation, The Myth of the Rational Market, too big to fail, transaction costs, tulip mania, value at risk, volatility arbitrage, volatility smile, working-age population, Y2K, yield curve, zero-coupon bond, zero-sum game

Banks, central banks, and corporations tend to have a short horizon, while customer deposits, FX reserves, and excess cash tend to be held for long periods. These institutions need to be prepared to satisfy sudden cash demands (such as are caused by a bank run, currency crisis, or various corporate expenses). Endowments, foundations, and sovereign wealth funds are closest to having permanent capital, but the first two have recurring spending needs each year, whereas the sovereign wealth funds of some commodity-rich countries can expect their net inflows to grow for another decade and net outflows to start only in the distant future. Time diversification Time diversification—the idea that stock market investing becomes less risky with a longer horizon—is a contentious issue.

Dedicated to Rory Byrne, in memoriam Acknowledgments I have been a student of expected asset returns for over 20 years while wearing many different hats: buy-side bond portfolio manager in the Finnish central bank, Ph.D. scholar at the University of Chicago (UofC), bond research analyst at Salomon Brothers, sell-side strategist and prop trader at Salomon/Citigroup, and hedge fund trader and strategist at Brevan Howard. I have also advised various institutional investors on their long-term investment strategies—most regularly for Norway’s sovereign wealth fund in semiannual expert panel meetings. It is mainly this last experience that has inspired this book. OK, that was too mildly put. I confess: I have been obsessed with expected returns. The passion for the topic arose in as different places as the Bank of Finland in Helsinki and the UofC campus in Hyde Park.

It helps that the book’s themes have little to do with Brevan Howard’s core approach of tactical rates trading based on fundamental macro-views with a focus on trade construction and risk management, so I will not be revealing any proprietary trade secrets. This book has been hugely influenced by my regular meetings in Oslo discussing the long-run investment strategy for Norway’s sovereign wealth fund. One outgrowth of those meetings has been even more inspirational—our trialogue with Knut Kjaer and Andrew Ang about diverse long-horizon investor topics. I have benefited from the thinking of fellow students, colleagues, customers, and research peers in academia and business. Some of the best sources I have yet to meet personally, but I am a voracious reader—to which this book’s lengthy reference list attests.


pages: 351 words: 102,379

Too big to fail: the inside story of how Wall Street and Washington fought to save the financial system from crisis--and themselves by Andrew Ross Sorkin

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Andy Kessler, Asian financial crisis, Bear Stearns, Berlin Wall, book value, break the buck, BRICs, business cycle, Carl Icahn, collapse of Lehman Brothers, collateralized debt obligation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, deal flow, Dr. Strangelove, Emanuel Derman, Fall of the Berlin Wall, fear of failure, financial engineering, fixed income, Glass-Steagall Act, Goldman Sachs: Vampire Squid, housing crisis, indoor plumbing, invisible hand, junk bonds, Ken Thompson, London Interbank Offered Rate, Long Term Capital Management, low interest rates, margin call, market bubble, Michael Milken, Mikhail Gorbachev, money market fund, moral hazard, naked short selling, NetJets, Northern Rock, oil shock, paper trading, proprietary trading, risk tolerance, Robert Shiller, rolodex, Ronald Reagan, Savings and loan crisis, savings glut, shareholder value, short selling, sovereign wealth fund, supply-chain management, too big to fail, uptick rule, value at risk, éminence grise

Instead, Nason told the group that Treasury had to concentrate its efforts on two fronts: obtaining the authority to put an investment bank through an organized bankruptcy, one that wouldn’t spook the markets, and more immediately, urging the banks to raise more money. In the previous six months, U.S. and European banks—including Citigroup, Merrill Lynch, and Morgan Stanley—had managed to bring in some $80 billion in new capital, often by selling their stakes to state-run investment funds—known as “sovereign wealth funds”—in China, Singapore, and the Persian Gulf. But it clearly wasn’t enough, and the banks had already been forced to tap the investors with the deepest pockets. With the Bear Stearns situation seemingly behind them, Paulson focused his attention this morning on what he thought would be the next trouble spot: Lehman Brothers.

His frame of reference was the end of Drexel Burnham Lambert, Michael Milken’s firm, which had filed for bankruptcy in 1990. “The demise of Drexel was really a liquidity problem,” he said at one of the firm’s Wednesday-morning risk-committee meetings, explaining how the firm didn’t have enough cash on hand. “Liquidity is the most important thing.” In December and January, Merrill raised $12.8 billion from the sovereign wealth funds Temasek Holdings of Singapore and the Kuwait Investment Authority, among other investors. At the same time, he went about dismantling the O’Neal empire. When he first arrived, he noticed that the security guards at Merrill’s headquarters just across from Ground Zero always kept an entire elevator bank open exclusively for him.

Within the firm some thought he might be angling for the Treasury secretary post if John McCain, the Republican front-runner, was victorious. By that June 11, when Larry Fink made his enraged call about BlackRock, it had become clear that the capital that Merrill Lynch had raised from Temasek and KIA, the sovereign wealth funds, back in December, was still insufficient—and that those deals were proving to be much more expensive than they appeared at the time. Under their terms, the investors were entitled to additional payouts to compensate for any dilution in their holdings if Merrill issued new shares at a lower stock price.


pages: 433 words: 125,031

Brazillionaires: The Godfathers of Modern Brazil by Alex Cuadros

"World Economic Forum" Davos, affirmative action, Asian financial crisis, benefit corporation, big-box store, bike sharing, BRICs, buy the rumour, sell the news, cognitive dissonance, creative destruction, crony capitalism, Deng Xiaoping, Donald Trump, Elon Musk, facts on the ground, family office, financial engineering, high net worth, index fund, invisible hand, Jeff Bezos, Mark Zuckerberg, megaproject, NetJets, offshore financial centre, profit motive, prosperity theology / prosperity gospel / gospel of success, rent-seeking, risk/return, Rubik’s Cube, savings glut, short selling, Silicon Valley, sovereign wealth fund, stem cell, stock buybacks, tech billionaire, The Wealth of Nations by Adam Smith, too big to fail, transatlantic slave trade, We are the 99%, William Langewiesche

Wagner and I were going to discuss Eike’s favorite topic, his wealth—which had grown. Eike had just announced a major deal, selling a two-billion-dollar piece of his empire to the United Arab Emirates. It was an unusual transaction. Rather than invest in any single company, the Emirates, through one of their so-called sovereign wealth funds, were acquiring 5.63 percent of EBX as a whole (always with the sixty-three). It took a while for me to unravel it, but this meant they were buying into not just his public companies, but his even airier private ventures—and also into the ideas that had yet to fully hatch but merely rattled around Eike’s subconscious, waiting to enter the world.

It took a while for me to unravel it, but this meant they were buying into not just his public companies, but his even airier private ventures—and also into the ideas that had yet to fully hatch but merely rattled around Eike’s subconscious, waiting to enter the world. I got to speak to Eike again when he called me to celebrate the deal. He sounded a lot jollier than he had earlier in the month, when we parried over the exact size of his fortune. Already he was in talks to sell another stake in EBX to a different sovereign wealth fund. What was he going to do with the money? Just then he was hammering out a partnership with Foxconn, the Taiwanese manufacturer, to make iPhones in Brazil at “civilized prices” at the port of Açu. “It will be the Brazilian Silicon Valley,” he said. (In Eike’s Silicon Valley, ideas would be copied from abroad—much as Mauá had done.)

Wagner received me in a chilly little conference room. Typical of the men who formed Eike’s inner circle, he was a Rio native and spoke with flawless, nonchalant conviction. He had a strong hint of the malandro to him. He said things like “People are knocking down our doors to give us money.” He told me how the Emirates’ sovereign wealth fund, the Mubadala Development Company, had sent a hundred and fifty people to analyze EBX’s projects. “They spent a year going through our books, doing due diligence,” he said. “Really clever guys, young guys from Harvard and Yale.” From the windows I could see a view of afternoon Rio: thrusting mountains, dark blue sea, distant oil tankers.


pages: 340 words: 100,151

Secrets of Sand Hill Road: Venture Capital and How to Get It by Scott Kupor

activist fund / activist shareholder / activist investor, Airbnb, Amazon Web Services, asset allocation, barriers to entry, Ben Horowitz, Benchmark Capital, Big Tech, Blue Bottle Coffee, carried interest, cloud computing, compensation consultant, corporate governance, cryptocurrency, discounted cash flows, diversification, diversified portfolio, estate planning, family office, fixed income, Glass-Steagall Act, high net worth, index fund, information asymmetry, initial coin offering, Lean Startup, low cost airline, Lyft, Marc Andreessen, Myron Scholes, Network effects, Paul Graham, pets.com, power law, price stability, prudent man rule, ride hailing / ride sharing, rolodex, Salesforce, Sand Hill Road, seminal paper, shareholder value, Silicon Valley, software as a service, sovereign wealth fund, Startup school, the long tail, Travis Kalanick, uber lyft, VA Linux, Y Combinator, zero-sum game

There are single-family offices (as the name suggests, they are managing the assets of a single family and its heirs) and multifamily offices (essentially, sophisticated money managers who aggregate the assets of multiple families and invest them across various asset classes). Sovereign wealth funds (e.g., Temasek, Korea Investment Corporation, Saudi Arabia’s PIF)—These are organizations that manage the economic reserves of a country (often resulting from things that we US citizens know nothing about—government surpluses) to benefit current or future generations of their citizens. In the specific case of many Middle Eastern countries, the sovereign wealth funds are taking profits from today’s oil business and reinvesting in other non-oil assets, to protect against long-term financial reliance on a finite asset.

And that is true. Over the last five years, though, as startups have been staying private longer, the landscape of private investors that now invest at the later stages of a private company’s development has increased to include public mutual funds, hedge funds, private equity buyout firms, sovereign wealth funds, family offices, and even traditional endowments and foundations. This availability of private capital, some argue, has supplanted the need for companies to go public. The phenomenon is real, but it doesn’t answer the question of cause and effect—that is, have public market investors entered the private markets because companies are choosing to stay private longer and delay entering the public markets?

First, many of the traditional venture capital firms have increased their fund sizes to be able not only to fund startups in the very early stages, but also to be a source of growth capital throughout their life cycles. Second, as companies have elected to stay private longer, more nontraditional sources of growth capital have entered the financing market. Whereas public mutual funds, hedge funds, sovereign wealth funds, family offices, and other strategic sources of capital had traditionally waited for startups to go public before they would invest growth capital, nearly all these players have now made the decision to invest directly in later-stage startups while they remain in the private markets. This is the most viable way for such institutional investors to capture the appreciation attendant to startups; that appreciation has essentially shifted from post-IPO to largely pre-IPO.


pages: 367 words: 97,136

Beyond Diversification: What Every Investor Needs to Know About Asset Allocation by Sebastien Page

Andrei Shleifer, asset allocation, backtesting, Bernie Madoff, bitcoin, Black Swan, Bob Litterman, book value, business cycle, buy and hold, Cal Newport, capital asset pricing model, commodity super cycle, coronavirus, corporate governance, COVID-19, cryptocurrency, currency risk, discounted cash flows, diversification, diversified portfolio, en.wikipedia.org, equity risk premium, Eugene Fama: efficient market hypothesis, fixed income, future of work, Future Shock, G4S, global macro, implied volatility, index fund, information asymmetry, iterative process, loss aversion, low interest rates, market friction, mental accounting, merger arbitrage, oil shock, passive investing, prediction markets, publication bias, quantitative easing, quantitative trading / quantitative finance, random walk, reserve currency, Richard Feynman, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, robo advisor, seminal paper, shareholder value, Sharpe ratio, sovereign wealth fund, stochastic process, stochastic volatility, stocks for the long run, systematic bias, systematic trading, tail risk, transaction costs, TSMC, value at risk, yield curve, zero-coupon bond, zero-sum game

Yet clients and novice quants often look for formulaic approaches, because there’s comfort in replicable methodologies. Sovereign wealth funds, for example, often ask asset managers for formulaic insights and strategies. In exchange for large mandates, they want the asset manager’s intellectual property. They’ll even send trainees to work in the asset manager’s offices for weeks. Their goal is to apply these approaches to the assets they manage in-house. (But if your process is to rely on the judgment of experienced analysts and portfolio managers, the intellectual property transfer idea becomes impractical unless the Sovereign Wealth Fund hires your portfolio managers.) My view is that the ROE-based sustainable growth rate, calculated from public, precooked, index-level data, is as good as any other formulaic approach.

Although many investors have become skeptical of the diversification benefits of hedge funds, the belief in the benefits of direct real estate and private equity diversification has been persistent. The advisory firm Willis Towers Watson reports that as of the end of 2016, pension funds, wealth managers, and sovereign wealth funds held more than $2 trillion in direct real estate and private equity investments.11 Money has flowed into these asset classes partly because of their perceived diversification benefits. Consultants have used mean-variance optimization in asset allocation or asset liability studies to make a strong case for increased allocations.

But if we think about the goal of defined contribution plans in the United States, and retirement-oriented plans throughout the world, the goal is always the same: to meet future income needs in retirement. To me, it’s a puzzle that different investors around the world use different approaches to solve the same problem. I pontificated about this issue at a pensions and investments conference back in 2016.11 Endowments and sovereign wealth funds may seem like they have different objectives from each other, but essentially both entities invest to meet future cash disbursements. The level of funding matters. It’s easy to simply recommend, “Match the liability,” or a favorite of consultants, “Match the liability with bonds, and then invest the rest in risk assets.”


pages: 272 words: 76,154

How Boards Work: And How They Can Work Better in a Chaotic World by Dambisa Moyo

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, Airbnb, algorithmic trading, Amazon Web Services, AOL-Time Warner, asset allocation, barriers to entry, Ben Horowitz, Big Tech, bitcoin, Black Lives Matter, blockchain, Boeing 737 MAX, Bretton Woods, business cycle, business process, buy and hold, call centre, capital controls, carbon footprint, collapse of Lehman Brothers, coronavirus, corporate governance, corporate social responsibility, COVID-19, creative destruction, cryptocurrency, deglobalization, don't be evil, Donald Trump, fake news, financial engineering, gender pay gap, geopolitical risk, George Floyd, gig economy, glass ceiling, global pandemic, global supply chain, hiring and firing, income inequality, index fund, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jeff Bezos, knowledge economy, labor-force participation, long term incentive plan, low interest rates, Lyft, money: store of value / unit of account / medium of exchange, multilevel marketing, Network effects, new economy, old-boy network, Pareto efficiency, passive investing, Pershing Square Capital Management, proprietary trading, remote working, Ronald Coase, Savings and loan crisis, search costs, shareholder value, Shoshana Zuboff, Silicon Valley, social distancing, Social Responsibility of Business Is to Increase Its Profits, SoftBank, sovereign wealth fund, surveillance capitalism, The Nature of the Firm, Tim Cook: Apple, too big to fail, trade route, Travis Kalanick, uber lyft, Vanguard fund, Washington Consensus, WeWork, women in the workforce, work culture

“How the West Got China Wrong.” March 1, 2018. www.economist.com/leaders/2018/03/01/how-the-west-got-china-wrong. The Economist. “Millennial Socialism.” February 14, 2019. www.economist.com/leaders/2019/02/14/millennial-socialism. The Economist. “Norway’s Sovereign-Wealth Fund Passes the $1trn Mark.” September 23, 2017. www.economist.com/finance-and-economics/2017/09/23/norways-sovereign-wealth-fund-passes-the-1trn-mark. The Economist. “Send in the Clouds.” July 4, 2019. www.economist.com/business/2019/07/04/send-in-the-clouds. Edgecliffe-Johnson, Andrew. “Activist Employees Pose New Labour Relations Threat to Bosses.” Financial Times, July 3, 2019. www.ft.com/content/c1167d4a-9cb5-11e9-b8ce-8b459ed04726. .

Additionally, corporations know that their actions could affect their insurance policies and credit ratings, as well as their standing with shareholders, as often represented by proxy institutions such as Glass Lewis and ISS. Influential state-owned pension funds such as the California Public Employees’ Retirement System (CalPERS) and the Dutch and Scandinavian pension funds, as well as sovereign wealth funds (for example, Norway), which manage trillions of dollars in assets, have also shown that they are willing to transform corporate behavior where they deem change necessary. On one level, these new responsibilities may seem like common-sense priorities, but they can be difficult for boards and corporations to navigate.

Importantly, this privileged access helps large investors make better-informed investment decisions, in addition to allowing them to influence the company’s strategy. Outside the large institutional investors led by the big three of BlackRock, Vanguard, and State Street, the multitrillion-dollar universe of investors includes sovereign wealth funds, pension funds, insurers, private equity funds, hedge funds, endowments, and foundations. Investors of all types are becoming more active and aggressive, agitating for corporations to change what they do and why and how they do it. Further complicating matters is that, although human employees are still largely responsible for executing trades on behalf of these entities, increasingly automated forms of trading—such as algorithmic and high-frequency trading (HFT)—are becoming commonplace, transforming how boards interact with investors.


pages: 565 words: 134,138

The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources by Javier Blas, Jack Farchy

accounting loophole / creative accounting, airport security, algorithmic trading, Asian financial crisis, Ayatollah Khomeini, banking crisis, book value, BRICs, business climate, business cycle, collapse of Lehman Brothers, commodity super cycle, coronavirus, corporate raider, COVID-19, Deng Xiaoping, Donald Trump, electricity market, energy security, European colonialism, failed state, financial innovation, Ford Model T, foreign exchange controls, Great Grain Robbery, invisible hand, John Deuss, junk bonds, Kickstarter, light touch regulation, lockdown, low interest rates, margin call, new economy, North Sea oil, offshore financial centre, oil shale / tar sands, oil shock, oil-for-food scandal, Oscar Wyatt, price anchoring, proprietary trading, purchasing power parity, Ronald Reagan, Scramble for Africa, sovereign wealth fund, special economic zone, stakhanovite, Suez crisis 1956, trade route, vertical integration, WikiLeaks, Yom Kippur War, éminence grise

In the period between 2010 and 2013, Trafigura, Louis Dreyfus and Gunvor all issued bonds for the first time. Others found different ways to tap outside investors, such as sovereign wealth funds and private equity. Vitol, for example, set up a new company to invest in assets using its own funds together with investments from George Soros, the sovereign wealth fund of Abu Dhabi, and a rich Saudi family. Noble Group sold shares to China Investment Corporation, a sovereign wealth fund, while Mercuria sold a stake to a state-owned Chinese company. This new capital gave the commodity traders the firepower to do bigger deals and make big-ticket investments.

The experience of having to fight for Glencore’s survival during the financial crisis made Glasenberg even more certain that he needed to remove the risk of a mass departure of partners and address the constraints on the company’s growth. And that put Glencore firmly on the path to an IPO. Soon, Glasenberg and his traders were pitching themselves to some of the world’s biggest sovereign wealth funds and other money managers. In December 2009, the company raised $2.2 billion from a group of those investors in the form of debt that, under certain circumstances, could be converted into Glencore shares. For the first time since Roche’s investment in 1994, an investor outside the trading company had put a valuation on Glencore – in this case, $35 billion. 16 Glasenberg kept pressing Davis for a merger between Glencore and Xstrata.

Some of Xstrata’s top shareholders publicly voiced their disgust at Davis’s pay deal. The fight over the retention bonuses galvanised opposition to the deal among Xstrata’s shareholders. Already, some of them felt that Glasenberg should be offering a higher price for Xstrata. In parallel, Qatar’s sovereign wealth fund had started buying shares in Xstrata. Within just a few months, the fund had amassed a stake of more than 10%. It demanded that Glencore increase its offer. 26 The deal was on the rocks. Again, Glasenberg held a discussion with his top traders. Some had been reluctant to go ahead with the initial deal; they were even more reluctant to pay more.


pages: 197 words: 49,296

The Future We Choose: Surviving the Climate Crisis by Christiana Figueres, Tom Rivett-Carnac

3D printing, Airbnb, AlphaGo, Anthropocene, autonomous vehicles, Berlin Wall, biodiversity loss, carbon footprint, circular economy, clean water, David Attenborough, decarbonisation, DeepMind, dematerialisation, Demis Hassabis, disinformation, Donald Trump, driverless car, en.wikipedia.org, Extinction Rebellion, F. W. de Klerk, Fall of the Berlin Wall, Gail Bradbrook, General Motors Futurama, green new deal, Greta Thunberg, high-speed rail, income inequality, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Jeff Bezos, job automation, Lyft, Mahatma Gandhi, Marc Benioff, Martin Wolf, mass immigration, Mustafa Suleyman, Nelson Mandela, new economy, ocean acidification, plant based meat, post-truth, rewilding, ride hailing / ride sharing, self-driving car, smart grid, sovereign wealth fund, the scientific method, trade route, uber lyft, urban planning, urban sprawl, Yogi Berra

These goals are: No Poverty; Zero Hunger; Good Health and Well-being; Quality Education; Gender Equality; Clean Water and Sanitation; Affordable and Clean Energy; Decent Work and Economic Growth; Industry, Innovation, and Infrastructure; Reduced Inequalities; Sustainable Cities and Communities; Responsible Consumption and Production; Climate Action; Life Below Water; Life on Land; Peace, Justice, and Strong Institutions; Partnerships for the Goals. 66. Dieter Holger, “Norway’s Sovereign-Wealth Fund Boosts Renewable Energy, Divests Fossil Fuels,” Wall Street Journal, June 12, 2019, https://www.wsj.com/​articles/​norways-sovereign-wealth-fund-boosts-renewable-energy-divests-fossil-fuels-11560357485. 67. 350.org, “350 Campaign Update: Divestment,” https://350.org/​350-campaign-update-divestment/. 68. Chris Mooney and Steven Mufson, “How Coal Titan Peabody, the World’s Largest, Fell into Bankruptcy,” Washington Post, April 13, 2016, https://www.washingtonpost.com/​news/​energy-environment/​wp/​2016/​04/​13/​coal-titan-peabody-energy-files-for-bankruptcy/. 69. 350.org, “Shell Annual Report Acknowledges Impact of Divestment Campaign,” press release, June 22, 2018, https://350.org/​press-release/​shell-report-impact-of-divestment/. 70.

The world’s capital is guarded by ranks of extremely cautious people who are looking to secure a good return, and their top priority is often to avoid risking a loss of value. This is technically right, of course, but it presents us with a problem. We’re not going to create the future we want without some risk. In June 2019, the Norwegian parliament voted into law new plans for its sovereign wealth fund (the world’s largest, managing $1 trillion in assets). It will divest more than $13 billion of investments in fossil fuels and invest up to $20 billion in renewables, beginning with wind and solar projects in developed markets.66 You can help precipitate similar seismic shifts in allocation of capital.


pages: 1,066 words: 273,703

Crashed: How a Decade of Financial Crises Changed the World by Adam Tooze

"there is no alternative" (TINA), "World Economic Forum" Davos, Affordable Care Act / Obamacare, Alan Greenspan, Apple's 1984 Super Bowl advert, Asian financial crisis, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bond market vigilante , book value, Boris Johnson, bread and circuses, break the buck, Bretton Woods, Brexit referendum, BRICs, British Empire, business cycle, business logic, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, collateralized debt obligation, company town, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, dark matter, deindustrialization, desegregation, Detroit bankruptcy, Dissolution of the Soviet Union, diversification, Doha Development Round, Donald Trump, Edward Glaeser, Edward Snowden, en.wikipedia.org, energy security, eurozone crisis, Fall of the Berlin Wall, family office, financial engineering, financial intermediation, fixed income, Flash crash, forward guidance, friendly fire, full employment, global reserve currency, global supply chain, global value chain, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, high-speed rail, housing crisis, Hyman Minsky, illegal immigration, immigration reform, income inequality, interest rate derivative, interest rate swap, inverted yield curve, junk bonds, Kenneth Rogoff, large denomination, light touch regulation, Long Term Capital Management, low interest rates, margin call, Martin Wolf, McMansion, Mexican peso crisis / tequila crisis, military-industrial complex, mittelstand, money market fund, moral hazard, mortgage debt, mutually assured destruction, negative equity, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, obamacare, Occupy movement, offshore financial centre, oil shale / tar sands, old-boy network, open economy, opioid epidemic / opioid crisis, paradox of thrift, Peter Thiel, Ponzi scheme, Post-Keynesian economics, post-truth, predatory finance, price stability, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, reserve currency, risk tolerance, Ronald Reagan, Savings and loan crisis, savings glut, secular stagnation, Silicon Valley, South China Sea, sovereign wealth fund, special drawing rights, Steve Bannon, structural adjustment programs, tail risk, The Great Moderation, Tim Cook: Apple, too big to fail, trade liberalization, upwardly mobile, Washington Consensus, We are the 99%, white flight, WikiLeaks, women in the workforce, Works Progress Administration, yield curve, éminence grise

In the first three months of 2005 alone, the United States ran a current account deficit—an excess of outward payments on trade in goods and services and investment income—of almost $200 billion. For the year it came to $792 billion and was showing signs of further deterioration in 2006. For those on the surplus side of the “global imbalances,” so-called sovereign wealth funds (SWF) became huge repositories of capital. According to estimates by the Peterson Institute for International Economics in Washington, DC, by 2007 emerging market sovereign wealth funds held at least $2 trillion in assets, in addition to the trillions in reserves held by their central banks.29 The Saudi Arabian Monetary Authority was flush with cash, as were the SWF of Norway and Singapore.

The EU current account surplus with the United States was modest compared with that of China. With the world as a whole, Europe’s current account was in modest deficit. The Europeans did not peg their currencies against the dollar. There was no agency in Brussels accumulating foreign assets as part of a currency stabilization effort, no German sovereign wealth funds. So how did European banks end up owning such a large slice of American mortgage debt? The answer is that European banks operated just like their adventurous American counterparts. They borrowed dollars to lend dollars. And the scale of this activity is revealed if we look not at the net flow of capital in and out of the United States (inflows minus outflows), which has its counterpart in the trade deficit or surplus, but at the gross flows, which record how many assets were bought and sold in each direction.

They took neither the capital nor the guarantees. The UK government never mustered the authority or even made the attempt to impose recapitalization on either of them. HSBC, with its large base in Asia, was strong enough to raise funds through the markets. Barclays resorted to a highly irregular deal with a gulf sovereign wealth fund to which it lent the funds to recapitalize itself, a transaction for which it was later to pay a substantial fine and for which its senior management would face criminal charges.87 Against the backdrop of the TARP debacle and the shambles in Europe, Gordon Brown’s scheme looked like a breakthrough.


pages: 278 words: 82,069

Meltdown: How Greed and Corruption Shattered Our Financial System and How We Can Recover by Katrina Vanden Heuvel, William Greider

Alan Greenspan, Asian financial crisis, banking crisis, Bear Stearns, Bretton Woods, business cycle, buy and hold, capital controls, carried interest, central bank independence, centre right, collateralized debt obligation, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, declining real wages, deindustrialization, Exxon Valdez, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, floating exchange rates, full employment, Glass-Steagall Act, green new deal, guns versus butter model, housing crisis, Howard Zinn, Hyman Minsky, income inequality, information asymmetry, It's morning again in America, John Meriwether, junk bonds, kremlinology, Long Term Capital Management, low interest rates, margin call, market bubble, market fundamentalism, McMansion, Michael Milken, Minsky moment, money market fund, mortgage debt, Naomi Klein, new economy, Nixon triggered the end of the Bretton Woods system, offshore financial centre, payday loans, pets.com, plutocrats, Ponzi scheme, price stability, pushing on a string, race to the bottom, Ralph Nader, rent control, Robert Shiller, Ronald Reagan, Savings and loan crisis, savings glut, sovereign wealth fund, structural adjustment programs, subprime mortgage crisis, The Great Moderation, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, wage slave, Washington Consensus, women in the workforce, working poor, Y2K

Britain will pool sovereignty, but not to the degree that it will join the euro or become part of a European regulatory regime. Europeans, led by President Sarkozy, want an attack on laissez-faire finance, to restrict sovereign wealth fund activity and propose systemic regulation. China wants to contribute as little as possible while being free to rig its currency to promote its exports. OPEC countries and Russia want the freedom to invest their $2 trillion of sovereign wealth funds where they choose. Japan wants to stop the yen from becoming wildly uncompetitive. Less developed countries want more voice and more money, but accept no responsibility for managing the system.

Being forced to acknowledge losses on their books could toss a few more of them out of their jobs at a time when the supply of golden parachutes may be getting thin. Better to hunker down and whimper for more welfare from the Fed. Some are already getting direct bailouts from big government. But it’s not coming from the U.S. government. Foreign-government-owned “sovereign wealth funds” are now buying sizable equity shares to shore up battered firms. Citigroup, where the Saudis are already the chief stockholder, sold roughly $20 billion of itself to Abu Dhabi, Singapore and Kuwait. The Chinese just bought 10 percent of Morgan Stanley, and Merrill Lynch sold a 9 percent stake to Singapore.

Treasury Secretary Paulson’s proposed massive bailout of Wall Street’s tarnished titans reminds people here of the billions the I.M.F. hustled up after ’97 in the name of assisting them—money that was used instead to rescue foreign investors. So Asian governments and financial players are skeptical about Washington’s talk of re-regulating the financial sector, and, although their central banks and sovereign wealth funds are flush with cash, they’re wary about being drawn into the Wall Street maelstrom. Among East Asian official funds, only Singapore’s Temasek and the China Investment Corporation have stepped up to the plate. Temasek pumped over $4 billion into Merrill Lynch a few months ago, but only after driving a hard bargain.


pages: 501 words: 114,888

The Future Is Faster Than You Think: How Converging Technologies Are Transforming Business, Industries, and Our Lives by Peter H. Diamandis, Steven Kotler

Ada Lovelace, additive manufacturing, Airbnb, Albert Einstein, AlphaGo, Amazon Mechanical Turk, Amazon Robotics, augmented reality, autonomous vehicles, barriers to entry, Big Tech, biodiversity loss, bitcoin, blockchain, blood diamond, Boston Dynamics, Burning Man, call centre, cashless society, Charles Babbage, Charles Lindbergh, Clayton Christensen, clean water, cloud computing, Colonization of Mars, computer vision, creative destruction, CRISPR, crowdsourcing, cryptocurrency, data science, Dean Kamen, deep learning, deepfake, DeepMind, delayed gratification, dematerialisation, digital twin, disruptive innovation, Donald Shoup, driverless car, Easter island, Edward Glaeser, Edward Lloyd's coffeehouse, Elon Musk, en.wikipedia.org, epigenetics, Erik Brynjolfsson, Ethereum, ethereum blockchain, experimental economics, fake news, food miles, Ford Model T, fulfillment center, game design, Geoffrey West, Santa Fe Institute, gig economy, gigafactory, Google X / Alphabet X, gravity well, hive mind, housing crisis, Hyperloop, impact investing, indoor plumbing, industrial robot, informal economy, initial coin offering, intentional community, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of the telegraph, Isaac Newton, Jaron Lanier, Jeff Bezos, job automation, Joseph Schumpeter, Kevin Kelly, Kickstarter, Kiva Systems, late fees, Law of Accelerating Returns, life extension, lifelogging, loss aversion, Lyft, M-Pesa, Mary Lou Jepsen, Masayoshi Son, mass immigration, megacity, meta-analysis, microbiome, microdosing, mobile money, multiplanetary species, Narrative Science, natural language processing, Neal Stephenson, Neil Armstrong, Network effects, new economy, New Urbanism, Nick Bostrom, Oculus Rift, One Laptop per Child (OLPC), out of africa, packet switching, peer-to-peer lending, Peter H. Diamandis: Planetary Resources, Peter Thiel, planned obsolescence, QR code, RAND corporation, Ray Kurzweil, RFID, Richard Feynman, Richard Florida, ride hailing / ride sharing, risk tolerance, robo advisor, Satoshi Nakamoto, Second Machine Age, self-driving car, Sidewalk Labs, Silicon Valley, Skype, smart cities, smart contracts, smart grid, Snapchat, SoftBank, sovereign wealth fund, special economic zone, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steve Jurvetson, Steven Pinker, Stewart Brand, supercomputer in your pocket, supply-chain management, tech billionaire, technoutopianism, TED Talk, Tesla Model S, Tim Cook: Apple, transaction costs, Uber and Lyft, uber lyft, unbanked and underbanked, underbanked, urban planning, Vision Fund, VTOL, warehouse robotics, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, X Prize

Filecoin: For this and all below references to biggest ICOs, please see Oscar Williams-Grut, “The 11 Biggest ICO Fundraises of 2017,” Business Insider, January 1, 2018. See: https://www.businessinsider.com/the-10-biggest-ico-fundraises-of-2017-2017-12. $8.5 trillion in assets: Data aggregated from this wikipedia article: https://en.wikipedia.org/wiki/Sovereign_wealth_fund, by way of the Sovereign Wealth Fund Institute database at https://www.swfinstitute.org. forty-two SWF deals valued at around $16.2 billion: Claire Milhench, “Sovereign Investors Hunt for ‘Unicorns’ in Silicon Valley,” Reuters, May 11, 2017. “I totally believe [in] this concept,”: Sam Shead, “The Japanese Tech Billionaire Behind Softbank Thinks the ‘Singularity’ Will Occur Within 30 Years,” Business Insider, February 27, 2017.

The number of ICOs per quarter has also ballooned, from roughly a dozen during the first quarter of 2017, to over a hundred by the last quarter of 2017, and there’s been even more activity since. Yet, forget ICOs for a moment. When it comes to the mother lode of deployable capital, the real heavyweight title belongs to sovereign wealth funds (SWFs). These investment behemoths hold an estimated $8.5 trillion in assets. That’s trillion, with a “T.” Traditionally, SWFs have invested money in public equities, infrastructure and natural resources, but as the economic promise of startups continues to climb, these funds are increasingly hunting outsized returns on entrepreneurial shores.

Since we’ve already covered insurance, we’ll shift focus to the changes in banking and finance, where exponential technologies are steamrolling both industries, completely altering this business of money. We got a peak at this transformation earlier, when we decoded the dollars pouring into crowdfunding, ICOs, venture capital, and sovereign wealth funds. To understand what else is coming, let’s start with a simple question: What, exactly, do we do with our money? We store it, of course. Mostly in banks. We also move it around, sometimes transferring cash between companies, other times borrowing or lending among individuals. Next, we invest it, trying to use our money to grow more money.


Firefighting by Ben S. Bernanke, Timothy F. Geithner, Henry M. Paulson, Jr.

Asian financial crisis, asset-backed security, bank run, Basel III, Bear Stearns, break the buck, Build a better mousetrap, business cycle, Carmen Reinhart, collapse of Lehman Brothers, collateralized debt obligation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Doomsday Book, financial deregulation, financial engineering, financial innovation, Glass-Steagall Act, housing crisis, Hyman Minsky, income inequality, invisible hand, Kenneth Rogoff, labor-force participation, light touch regulation, London Interbank Offered Rate, Long Term Capital Management, low interest rates, margin call, money market fund, moral hazard, mortgage debt, negative equity, Northern Rock, opioid epidemic / opioid crisis, pets.com, price stability, quantitative easing, regulatory arbitrage, Robert Shiller, Savings and loan crisis, savings glut, short selling, sovereign wealth fund, special drawing rights, tail risk, The Great Moderation, too big to fail

But the big banks had too many of their own problems to finance it, and without government backing the effort fizzled. The Fed also forced Citi to start conserving capital by ordering the bank to reduce its dividend. And together we pressured other troubled institutions to raise new capital. Citi raised $20 billion over the next few months, mostly from sovereign wealth funds in the Middle East and Asia. Morgan Stanley and Merrill also brought in foreign investors, who got to watch their new stakes in prestigious Wall Street firms crater almost immediately. The E. coli effect was beginning to manifest itself, as investors and creditors began to shun entire classes of financial products whether they were contaminated with subprime or not, which depressed their prices and made them even more toxic.

By the summer, our top priority was stabilizing the two GSEs before they dragged down the entire system; trillions of dollars’ worth of their securities were coursing through the financial bloodstream, and we were afraid they could poison it. Their paper had been considered a safe investment around the world, and now we were fielding calls from nervous officials from sovereign wealth funds and foreign governments who wanted to make sure the GSEs themselves were safe. Some of them hadn’t even realized the U.S. government didn’t officially backstop Fannie Mae and Freddie Mac. So Hank decided to ask Congress for the authority to stabilize both mortgage giants, to make explicit the long-standing implicit guarantee that Washington would stand behind the two firms.

See also specific financial institutions Reserve Primary Fund, 76, 87, 157 retirement funds, 69 risk and risk management and acceleration of crisis, 20–25 and arsenal for dealing with future crises, 126–28 and Fannie Mae/Freddie Mac conservatorship, 56 migration of risk outside regulatory system, 150 and moral hazard, 8 and politics of crisis management, 127 and post-crisis reforms, 112–18 and shortcomings of U.S. regulatory regime, 26–27 and spark of crisis, 17 and TARP, 88 and vulnerability to panics, 14–16 runs on financial institutions and AIG rescue, 72–73 and expansion of crisis, 76 and increase in short-term liabilities, 151 and Lehman failure, 68, 70 and nature of financial crises, 15 and onset of financial crisis, 2 and policy responses to crisis, 161, 171, 172 and post-crisis reforms, 112, 117 “runnable” forms of debt, 12, 112 and TARP, 90, 91, 94 and vulnerability of financial system, 14 Russian default, 13 Sachs, Lee, 80–81 Santelli, Rick, 105 Sarkozy, Nicolas, 36 secondary mortgage market, 56 Securities and Exchange Commission (SEC), 23, 47, 49, 77 securitization boom, 18–19 self-correction, 36–37 Senate Banking Committee, 56, 57 Senior Preferred Stock Purchase Agreements (SPSPAs), 191, 217n shadow banking system and acceleration of crisis, 22, 25 and arsenal for dealing with future crises, 118 and post-crisis reforms, 112, 113–14 and shortcomings of U.S. regulatory regime, 26, 29 and Term Securities Lending Facility, 45 shareholders of financial institutions, 52, 67, 74 Shelby, Richard, 56 short sellers, 63, 77–78 short-term lending and debt and acceleration of crisis, 21–23 and causes of financial crisis, 3 and Countrywide sale, 39 and current state of financial system, 6–8 and expansion of crisis, 76 increase in short-term liabilities, 151 and Lehman failure, 63 and post-crisis reforms, 113 repo lending, 21, 39, 46–48, 50, 76, 113 and roots of financial crisis, 12 and shortcomings of U.S. regulatory regime, 26 and TARP, 88–89 Small Business Jobs Act, 187 “socialism” claims, 58, 80 sovereign debt crisis, 123 sovereign wealth funds, 41, 57 stagnation, 6 state budgets, 188 State Street, 175, 176, 181 Stimulus Act, 163 stimulus programs, 9, 43, 103–4 stock market, 40, 85, 110, 200, 216n stock prices, 52 stress tests and Bear Stearns rescue, 53 and phases of financial crisis, 153 and policy responses to crisis, 163, 174, 180, 181 and post-crisis reforms, 114, 115, 117 and shortcomings of U.S. regulatory regime, 26 and TARP, 92, 99–102 and Treasury investments in banks, 176 structured investment vehicles (SIVs), 41, 114 subprime mortgage sector Citigroup’s exposure to, 41 and Lehman failure, 63 and onset of financial crisis, 30, 31, 32, 43 and roots of financial crisis, 11, 12 and shortcomings of U.S. regulatory regime, 29 and spark of crisis, 17, 19–20 Summers, Larry, 98 Sun Tzu, 125 “super-senior CDOs,” 41 Supervisory Capital Assessment Program, 99.


pages: 468 words: 145,998

On the Brink: Inside the Race to Stop the Collapse of the Global Financial System by Henry M. Paulson

Alan Greenspan, asset-backed security, bank run, banking crisis, Bear Stearns, break the buck, Bretton Woods, buy and hold, collateralized debt obligation, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, Doha Development Round, fear of failure, financial engineering, financial innovation, fixed income, housing crisis, income inequality, junk bonds, London Interbank Offered Rate, Long Term Capital Management, low interest rates, margin call, money market fund, moral hazard, Northern Rock, price discovery process, price mechanism, regulatory arbitrage, Ronald Reagan, Saturday Night Live, Savings and loan crisis, short selling, sovereign wealth fund, technology bubble, too big to fail, trade liberalization, young professional

We had agreed to exchange brief opening statements, then dismiss the media and begin our meeting. But instead Putin launched into a soliloquy on the U.S. financial crisis. With oil prices at record highs, the Russians were feeling their oats. I spoke about the work we had been doing with Kudrin on sovereign wealth funds, and Putin responded, “We don’t have a sovereign wealth fund. But we are ready [to create one], especially if you want us to.” Frankly, this was too good a political opportunity for Putin to pass up. In 1998 it was a humiliating Russian default that started the global financial crisis. And now he was temporarily able to point to a reversal of fortunes.

They had always seemed to find a way out of trouble. For months, Steel and I had been pushing Bear, and many other investment banks and commercial banks, to raise capital and to improve their liquidity positions. Some, including Merrill Lynch and Morgan Stanley, had raised billions from big investors such as foreign governments’ sovereign wealth funds. Bear had talked with several parties but had only managed to make an agreement with China’s Citic Securities under which each would invest $1 billion in the other. The deal was not the answer to Bear’s needs and in any case hadn’t yet closed. Investment banks were more vulnerable to market pressures than commercial banks.

At the time, Lehman was talking with, among others, the state-owned Korea Development Bank (KDB) and China’s Citic Securities. (Later I would learn that Lehman’s CEO had approached a stunning range of possible partners, from Deutsche Bank and Morgan Stanley to British giant HSBC, Middle Eastern sovereign wealth funds, and AIG, which soon would find itself in desperate straits.) Unfortunately, word of Dick’s search for possible investors popped up in the press, lending Lehman an air of desperation and eroding confidence in the firm. Ken did his best to impart a need for pragmatism. But it was clear to Ken and me that Dick was looking for an unrealistic price.


The Making of a World City: London 1991 to 2021 by Greg Clark

Basel III, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, British Empire, business climate, business cycle, capital controls, carbon footprint, congestion charging, corporate governance, cross-subsidies, Crossrail, deindustrialization, Dissolution of the Soviet Union, East Village, Fall of the Berlin Wall, financial innovation, financial intermediation, gentrification, global value chain, haute cuisine, high-speed rail, housing crisis, industrial cluster, intangible asset, job polarisation, Kickstarter, knowledge economy, knowledge worker, labour market flexibility, low skilled workers, manufacturing employment, Masdar, mass immigration, megacity, megaproject, New Urbanism, offshore financial centre, open immigration, Pearl River Delta, place-making, rent control, Robert Gordon, Silicon Valley, smart cities, sovereign wealth fund, trickle-down economics, urban planning, urban renewal, working poor

Prior to the early 1990s, investors from individual regions such as Scandinavia, the US and Japan were active for brief phases in the City, but gradually a much wider range of investors have become involved. New entrants to the market have been appearing year by year – German and Irish institutions; Norwegian, Abu Dhabi and Chinese sovereign wealth funds; Russian and Indian billionaires – and all have grown in sophistication (Table 7.2). Since the global financial crisis, almost two-thirds of office market purchases have been made by foreign investors, a significantly higher proportion than in New York (where the figure is closer to half), and investment values tend to be much higher than their British counterparts.

Today, what were once pioneering developments on the fringes of Zone 1 are almost the norm, with King’s Cross, Paddington, and Earl’s Court now very viable propositions 94 The evolution of London, 1991 to 2015 Table 7.2: Prominent foreign investors in London’s commercial real estate market since the global financial crisis Sovereign Wealth Funds State Oil Fund (Sofaz) China Investment Corporation State Administration of Foreign Exchange Korea Investment Corporation Kuwait Investment Authority Azerbaijan China China 78 St James’s Street Canary Wharf, Winchester House Drapers Gardens, 12 Throgmarton Avenue Korea Kuwait 1 Bartholomew Square Willis Building, 5 Canada Square, 60 Threadneedle Street, 1 Bunhill Row Regent Street portfolio Norges Bank Investment Management Qatari Investment Authority (Qatari Diar, Qatar Holdings) Norway Government of Singapore Investment Corporation Singapore Pension Funds Canada Pension Plan Investment Board National Pension Service Employees Provident Fund (EPF) Swedish Cityhold (First and Second National Pension Funds) Qatar Canada Korea Malaysia Sweden Other Funds/Firms Brookfield Properties Oxford Properties Europe Gingko Tree Deka Samsung Asset Management Mitsubishi Estates Permodalan Nasional Berhad SEB Asset Management Olayan Group Blackstone Real Estate Canada Canada China Germany Japan Japan Malaysia Norway Saudi Arabia USA Carlyle EREP Hines JP Morgan Asset Management USA USA USA Wealthy Individuals (and their syndicates) Moise Yacoub Safra Brazil Undisclosed Russia Nathan Kirsh South Africa The Shard, Harrods, Canary Wharf, One Hyde Park, Grosvenor Square, East Village (Olympic Park), Shell Centre, Chelsea Barracks, One Cabot Square, Park House Bluewater Victoria Circle, 55 Bishopsgate, Westfield Stratford City 88 Wood Street, 40 Grosvenor Place Battersea Power Station, Whitefriars, One Sheldon Square, 40 Portman Square The Peak (5 Wilton Road), 1 Kingdom Street, 40 Holborn Viaduct 99 Bishopsgate, 125 Old Broad St. 71 High Holborn, 122 Leadenhall Street Ropemaker Place Palestra (SE1), 90 York Way 10 Gresham Street 1 Victoria Street, 6–8 Bishopsgate 1 Exchange Square, 90 High Holborn 1 Threadneedle Street Brompton Road estate Devonshire Square, Chiswick Park, Broadgate, 1–11 John Adam Street 60 Victoria Embankment, Sampson House Broadgate West Bishops Square Plantation Place Grand Buildings (1 Trafalgar Square) Tower 42 Source: Jones Lang LaSalle (2012); GVA (2012).

This is the character that draws people into the capital.” (Personal communication, 10 December 2013) The post-Olympic East London housing market has stimulated a new cycle of international investment in and around Stratford. Significant investments have already taken place from Dutch pension fund APG, Qatar’s sovereign wealth fund Qatari Diar, Sweden’s Inter Ikea Group, Germany’s Deka, and many others, while investment has also surged in nearby Hackney Wick (Sherwood, 2011). These pockets of new development have raised aspirations and made it possible for projects to go ahead, although how they will be stitched together to Homes and housing in London 107 form stable communities is as yet uncertain.


pages: 478 words: 126,416

Other People's Money: Masters of the Universe or Servants of the People? by John Kay

Affordable Care Act / Obamacare, Alan Greenspan, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Monday: stock market crash in 1987, Black Swan, Bonfire of the Vanities, bonus culture, book value, Bretton Woods, buy and hold, call centre, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, cognitive dissonance, Cornelius Vanderbilt, corporate governance, Credit Default Swap, cross-subsidies, currency risk, dematerialisation, disinformation, disruptive innovation, diversification, diversified portfolio, Edward Lloyd's coffeehouse, Elon Musk, Eugene Fama: efficient market hypothesis, eurozone crisis, financial engineering, financial innovation, financial intermediation, financial thriller, fixed income, Flash crash, forward guidance, Fractional reserve banking, full employment, George Akerlof, German hyperinflation, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Greenspan put, Growth in a Time of Debt, Ida Tarbell, income inequality, index fund, inflation targeting, information asymmetry, intangible asset, interest rate derivative, interest rate swap, invention of the wheel, Irish property bubble, Isaac Newton, it is difficult to get a man to understand something, when his salary depends on his not understanding it, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Jim Simons, John Meriwether, junk bonds, light touch regulation, London Whale, Long Term Capital Management, loose coupling, low cost airline, M-Pesa, market design, Mary Meeker, megaproject, Michael Milken, millennium bug, mittelstand, Money creation, money market fund, moral hazard, mortgage debt, Myron Scholes, NetJets, new economy, Nick Leeson, Northern Rock, obamacare, Occupy movement, offshore financial centre, oil shock, passive investing, Paul Samuelson, Paul Volcker talking about ATMs, peer-to-peer lending, performance metric, Peter Thiel, Piper Alpha, Ponzi scheme, price mechanism, proprietary trading, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, railway mania, Ralph Waldo Emerson, random walk, reality distortion field, regulatory arbitrage, Renaissance Technologies, rent control, risk free rate, risk tolerance, road to serfdom, Robert Shiller, Ronald Reagan, Schrödinger's Cat, seminal paper, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, sovereign wealth fund, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, Steve Wozniak, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tobin tax, too big to fail, transaction costs, tulip mania, Upton Sinclair, Vanguard fund, vertical integration, Washington Consensus, We are the 99%, Yom Kippur War

Apple is constructing a new headquarters building in Cupertino at an estimated cost of $5 billion, which will be its principal physical asset. The corporation currently occupies a variety of properties in that town, some of them owned, others leased. The flagship UK store on London’s Regent Street is jointly owned by the Queen and the Norwegian sovereign wealth fund. Operating assets therefore represent only around 3 per cent of the estimated value of Apple’s business. Apple shares have been listed on NASDAQ since 1980, when the corporation raised $100 million from investors. Even then, the purpose of the issue was not to obtain money to grow the business.

Society taken as a whole can shift consumption from one point in time to another only by investing in, or running down, the physical assets of the nation: by building houses or other property, investing in infrastructure and creating and developing businesses. Small countries can also transfer wealth to the future by building up assets overseas. A few countries – such as Norway, Singapore and Qatar – have established sovereign wealth funds which are now a significant force in the investment channel. Still, even the largest of these – Norway’s $700 billion oil fund – is much smaller than the $4 trillion of funds managed by BlackRock. The scale and distribution of this transfer between present and future are the product of collective choices about public infrastructure and private choices about business investment.

Gerald 242 Countrywide Financial 150, 152, 293 Craig, James 26 credit cards companies 27, 210 debt 54 origin of 185–6 profitability 113 credit default swaps 41, 60, 61, 64, 73, 100, 101, 119, 120, 121, 139, 152, 153, 223 credit expansion 54, 98 Crédit Lyonnais 33 credit ratings 21, 101, 248 credit risk 42, 75, 177, 192 Crédit Suisse First Boston 167, 292 credit-scoring 84, 87, 290, 291 Crosby, James 125 crowd-funding 81 D Dad’s Army (television series) 12 Dahinden, Vincent 124 Daschle, Tom 230 debit cards 186 debt reduction 241 debt securities 101, 107 debt-to-value ratio 149 democracy 4, 52, 308 deposit channel 25–6, 147–8, 173–94 activities of 188–94, 189, 192 directed by retail banks 291 household wealth 173–80, 175, 179 the payment system 181–8 ring-fencing 194, 287 simplification needed 213 deposit insurance 25, 121 deposit protection schemes 135 Derbyshire Building Society 90 deregulation 13, 28, 31, 149–50, 151, 246–7, 292 derivative contracts 191, 192, 323n11 derivatives market 2, 19, 35, 38, 110 portfolios 98 regulation 57, 234 securities 2, 15, 17, 41, 71, 131 Detroit, Michigan 254 Deutsche Bank 33, 104, 136–8, 166, 169, 191–2, 192, 193, 200, 219, 222, 266, 282, 286, 303, 323n11 Diamond, Bob 34, 35, 261, 267, 295, 300 Dickens, Charles: Martin Chuzzlewit 201 Dimon, Jamie 14–15, 35, 231 Dirks, Ray 228 Disney, Walt 70, 71 diversification 21, 27, 28, 29, 32, 33, 45, 95–9, 153 ‘alternative assets’ 98 building societies 151 buying all available stocks 99 coin-tossing game 96 correlation 96, 97–8 Exchange Traded Funds 99 hedge funds 98–9 passive funds 99 diversification divorce 74 DLJ 313n15 Dodd-Frank regulatory regime 236–7, 271 Doerr, John 167 dollar devaluation (1971) 14, 36 Donoghue, Mrs 283 dot.com boom 40 Draghi, Mario 42, 139 Dreamworks 21 Drexel Burnham Lambert 46 drug use 22 ‘Dutch book’ 68, 116 E eBay 187 economic policy 240–69 the British dilemma 262–9 consumer protection 259–62 financial markets and economic policy 248–52 Maestro 240–48 pensions and inter-generational equity 252–9 Economist, The 115 ‘Edge, the’ 114–18, 288 Edinburgh Britain’s second financial centre 11, 263 investment trusts in 26 Edison, Thomas 196 education 253, 259 efficient market hypothesis (EMH) 69–70, 99 Einstein, Albert 129 El Paso oil business 117–18, 232 electricity 245–6, 278 eligible counterparty 282–3 Elizabeth II, Queen 161 Emanuel, Rahm 301 embezzlement 127 emerging markets 39, 42 Emerson, Ralph Waldo: The Conduct of Life 181 emperor’s guard’s new clothes, the 309–10 empire, decline of 13 Enron 123, 124, 126, 127, 158, 176–7, 197, 246, 317n5 Equitas 107 Equity Funding 228 equity markets 23, 85, 168–9, 249, 288 Ericsson 108 Espirito Santo 271 Eurodollar market 13, 20, 120, 121 European Central Bank 42, 98, 138, 139, 183, 243, 244 European Commission 184, 289 European Monetary System 184 European Parliament 184, 328n6 European Union (EU) 194, 220, 226, 228, 273, 287 Eurostat 250 Eurozone 158, 183, 243, 250 creation of 129 crisis 41–2, 139, 301 indebtedness in 184 exchange rates fixed 18 flexible 18 forward 73 Exchange Traded Funds (ETFs) 99 synthetic 99 exchange-traded funds 280 Exchequer Partnerships 158, 159 extended family 78 Exxon Mobil 96, 101, 120, 134, 161, 163, 164, 189, 196 F Facebook 81, 162–3, 166, 167, 185, 196 ‘fair value’ 125–6, 191 fallacy of composition 89 Fama, Eugene 69 family support 79 Fannie Mae 75, 91, 135, 152, 230, 317–18n5 Farkas, Lee 152, 293 FBI 131 febezzle (‘functionally equivalent bezzle’) 127, 128, 132, 136, 176, 177, 190 Federal Deposit Insurance Corporation (FDIC) 25, 135, 247 Federal Reserve Bank of Kansas City symposium (Jackson Hole, Wyoming, 2005) 56–7, 58, 73, 79, 102, 181, 236, 256, 280 Federal Reserve Bank of New York 57, 183, 232, 242, 243 Federal Reserve Board 5, 41, 56, 57, 58, 134, 183, 231, 240, 243, 245, 247 Federal Reserve System 13, 40, 90, 98, 150, 183, 245 Federated Department Stores 204 fee structures 204 Ferguson, Charles 236 Feynman, Richard P. 276, 327n3 Fidelity 109, 199, 200, 213 finance sector a bias to action 203–8 control of risk 6, 7 economic significance 6 excess in the industry 6 export contribution 265 greedy individualism 24 growth of 1–2, 33 heavy criticism of 233 as just another business 5 labour force 263 lack of sanction application 7 lobbying 230, 302, 306 major role in politics 4 management of household financial affairs 6 matching of borrowers and lenders 6, 7 past and current attitudes in 23–4 payments system 6, 7, 25, 281 profitability 132–40, 134 qualitative assessment 265 recurrent crises 35, 307 regarded as having unique status 4–5 remuneration 54, 112 role of 143 search 144 sense of personal entitlement 24, 300 share in GDP 264–5 skills 15 stewardship 144 structural reform 7 taxation 266–7 work incentives 7 workers in finance 6–7, 125 finance theory 5 Finance Watch 328n6 financial advisers 197, 199, 291 Financial Conduct Authority 230, 237, 261 Financial Products Group 293 financial sector, regulation of see regulation Financial Services Authority 243, 247, 303 Financial Services Compensation Scheme 260 Financial Times 68, 115 financialisation 4–7, 36, 45, 72, 163, 165, 172, 259 and complexity 276, 278 conflation of roles of agent and trader 198 and the conglomeration 133 direct impact of 176 effect on corporate behaviour 78 and emergence of large asset management companies 200 emphasis on monetary policy 241 in Germany 169 and hedge funds 289 and housing 149 national and international 39 and risk 55 and secondary markets 170 and social security 255 Summers supports 57 transition from agency to trading 84 two main componenents of 16 Fink, Larry 200 First Boston 200 First Data Corporation 186 First World War 221 fiscal arbitrage 122, 123, 223 FISIM (financial services indirectly measured) 264 Fitch rating agency 313n6 Fitzgerald, Scott: The Great Gatsby 17, 297 FitzPatrick, Sean 156, 293–4 Five Star Movement 306 fixed commissions 29 fixed interest, currency and commodities (FICC) 22, 107, 110, 111, 118, 125, 160, 191, 194, 288 fixed-interest securities 190, 193 Flaubert, Gustave: Sentimental Education 80 Florida land boom (1920s) 201 Forbes magazine 204, 231 Ford, Henry 45, 70, 71 foreign exchange transactions speculators in 18–19 value of 2 Fortune magazine 23 ‘four horsemen’ 167, 168 Fox, Justin 70 fractional reserve banking 88 France corporatism 303–4 defeat of Sarkozy 248, 249 downgraded bonds 248, 249, 250 housing 149, 174 ‘trente glorieuses’ 36 Frankfurt financial centre 26 Freddie Mac 75, 135 free market 18, 59, 238, 247, 302 Frick, Henry Clay 44 Friedman, Milton 60, 63 Free to Choose 56 front running 28 FrontNational 306 Frost, Robert: ‘Provide, Provide’ 252 FT Alphaville 16 Fuld, Dick 24, 32, 72–3, 75, 231, 293 full employment 241 fund managers 66, 86, 108, 115, 206, 209, 212 future of finance 297–308 futures 19 G G8 and G20 economic summits 220 Galbraith, J.K. 127, 201 Galton, Francis xi gambling 130–31, 289 close regulation of 71, 72 Lloyd’s coffee house 71–2 lottery 65, 66, 68, 72 Gates, Bill 174, 268 Gaussian copula 22 GEC 48, 51 GEICO 107 Geithner, Timothy 57–8, 73, 75–6, 92, 104, 183, 230, 232, 239, 276, 306, 307 Geithner doctrine 271 Gemeinschaft 17, 61, 255 General Electric 46, 196 General Motors 45, 49 general share price indexes 98 Generali 27 Generally Accepted Accounting Principles (GAAP) 193 Gensler, Gary 288 Germany corporatism 303, 304 ‘economic miracle’ 36 housing 149, 174 indebtedness to 183–4 Landesbanken 169 Mittelstand 52, 168, 169, 170, 171, 172 role of Bundesbank 243 social market economy 219 state pensions 253 Gesellschaft 17, 61, 255 Gingrich, Newt 230 Glass-Steagall Act (1933) 25, 28, 33 Glaxo 96 global financial crisis (2007–9) and bank assets 91 bankers’ cognitive dissonance 102 begins in the USA 41 causes of 194, 220, 271 collapse of asset-backed securities market 21 collapse of sub-prime mortgages 109 costs of 285 and derivative contracts 192 and diversification 32 emergency measures 285–6 Gaussian copula 22 and liquidity 188, 278, 286 misallocation of housing finance 148 most culpable figures 293 unprecedented public intervention 41 the worst financial crisis since the Great Depression 15 globalisation 13 of capital flows 176, 180 of financial markets 17 and income inequality 53–4 pressure on regulatory structures 14 ‘gnomes of Zurich’ 18 gold standard 13, 18, 36, 181, 241 Golden Dawn 306 Goldman Sachs 1, 14, 31, 55, 57, 59, 63, 104–5, 114, 115, 117, 118, 120, 135, 143, 158, 160, 164, 232, 233, 250, 258, 266, 282, 283, 284, 288, 294, 300, 306 Code of Business and Ethics 118 Goldsmith, Oliver: The Deserted Village 49 goodwill 31, 258–9 Goodwin, Fred 14, 34, 149, 156, 169, 231, 293 Google 80, 83, 162, 167, 196 Gould, Jay 44 government assets and liabilities 000 government bonds 17, 42, 86, 155, 178, 208, 222, 290 government debt 128, 178, 190, 203, 245, 250, 251 government spending 253 Graham, Ben 176 Grasso, Dick 49 Great Depression 12, 15, 25, 36, 57, 218, 221, 225, 258, 308 ‘Great Moderation, the’ 40, 57, 104 Greece accounting manipulation 158, 250 adoption of a common currency 41 government debt 42, 128 refinancing of Greek credit 42 Greenspan, Alan 57, 63, 104, 119, 181, 245, 276 and Ayn Rand 79, 240 and ‘Black Monday’ 242 chairman of the Federal Reserve Board 56, 58, 181, 240–41, 242 and Fed priorities 247–8 and the Markowitz model 68–9 and mortgage defaults 97 and risk 73 testimony to Congress 67–8, 240 ‘Greenspan doctrine’ 56, 60, 67, 68, 71, 87, 101, 249 ‘Greenspan put, the’ 242, 249 Grillo, Bepep 306 Grimaldis of Monaco 123 gross domestic product (GDP) 251, 256, 264–5, 265, 266 gross national income (GNI) 265–6 gross value added (GVA) 265 group insurance 76–7 Grubman, Jack 293 H Haldane, Andrew 139, 264 Halifax Building Society 31, 32, 140, 164, 258–9 becomes a public company 124 competition for the ‘talent’ 193–4 ‘the Edge’ established in wholesale financial markets 114 and fixed-interest securities 190, 193 Group Treasury 106, 107, 111, 129 origins 106 rescued by the British government 124 response to changing times (1990s) 129 takes over the Bank of Scotland 124, 125 the world’s largest mortgage lender 106 worthless windfall shares 127–8 Hamamatsu Photonics 168 Hambrecht & Quist 167 Hambros Bank 158 Hanson 45, 46–7 ‘hard’ commodities 17 Harding, David 111–12, 124 Hartlepool nuclear power station, northeast England 158 Harvard University 5, 14–15 Harvey-Jones, Sir John 51 Hawkins, Sir Henry 61, 64, 116 Hayek, Friedrich 225 HBoS 32, 91, 124, 125, 135 healthcare 77, 78, 79, 253, 257–8 hedge fund managers 23, 99, 109, 282 Hedge Fund Research 323n9 hedge funds 27, 98–9, 110, 191, 194, 284, 289, 323n9 hedge fund centre, Mayfair, London 263 Helyar, John 46, 164 Henderson, David 58 ‘hidden champions’ 168 high-frequency trading 2, 111, 280, 305 Hill, Lord 322n14 Hope, Bob 160 Hornby, Andy 14 horse-racing 72, 116 House of Commons library 115 House of Lords 283 House of Morgan 25, 35 Household International 34–5 housing 148–54, 290 causes of crisis in housing finance 153 collapse of thrifts 150 equity release 54 house prices (US) 41, 43, 174, 259 houses as physical assets 146–7 low-cost 79 mortgage defaults 97 owner-occupied housing stock 53, 149, 151 specialist lenders 150 HSBC 1, 24, 34–5, 286, 328n22 Hubler, ‘Howie’ 130 Hurricane Katrina (2005) 79, 256 I Ibsen, Henrik: An Enemy of the People 285 Iceland: bank and compensation scheme collapse 260 ICI 45, 46–8, 51, 78 Iksil, Bruno 35, 130 ‘I’ll be gone, you’ll be gone’ culture 125, 128, 129, 131, 133, 152, 156, 204, 273 imperialism 13, 218 income distribution 52–4, 53 Independent Commission on Banking 139, 287 India, economic growth in 53 inflation 36, 54, 178, 241–2, 258 information asymmetry 60, 74, 76, 251, 317n2 information technology 18, 19–20, 31, 168, 185 infrastructure, property and 154–60 initial public offering (IPO) 113 Inside Job (film) 236 insurance companies 16, 27, 29, 120, 197, 199, 208, 213, 264 Intel 29, 167 interest rates and inflation 241, 242 long-term 251 intergenerational accounting 258 intermediation 80–105 bad intermediaries 81–2 competition 271 direct/indirect 82, 83 and diversification 96 facilitating 7 and the internet 81 leverage 100–105 managed 83, 201, 212–13 the role of the middleman 80–99 total costs of 207 transparent 83, 84, 201–2, 203 International Financial Reporting Standards (IFRS) 193 International Labour Organization (ILO) 263 International Monetary Fund (IMF) 13–14, 38, 39, 56, 58, 139, 220, 302 international reply coupons 131 International Swaps and Derivatives Association (ISDA) 61, 119, 193 internet 182, 183, 185 connectedness 81, 83 and intermediation 81 Interstate Commerce Commission 233, 237 investment banking FICC trading 107 global expansion of American banks 33 investment trusts 26, 27 relationships 16 within commercial banks 22 investment banks boutique 205 ‘dark pools’ 29 economists in 248–9 legal partnerships 30 modern objectives 197 and rating agencies 249 and search 197 investment channel 26, 148, 174, 175, 195–213 a bias to action 203–8 fails to meet the needs of businesses and households 213 investable assets 202–3, 203 the role of the asset manager 208–13 simplification needed 213 and sovereign wealth funds 253 stewardship 195–203, 203 investment companies 26, 27, 96, 177, 197, 199, 200, 201, 202 investment funds closed-end (managed) 212 open-ended (transparent) 212 Investor B 108 investors allocation of risk 57, 60, 73 and credit ratings 21 foreign 39 institutional 23, 28, 46 large 98 and leverage 101 long-term 94 losses of 43 private 28 property 99 retail 66 small 30, 99 sophisticated 23 Ireland bank workers’ strike (1970) 182 collapse of banking system (2008) 42, 138, 182 Isaacson, Walter 71 Ishmael, Stacy-Marie 16 Israel defence forces 171 high-technology start-up sector 117 It’s a Wonderful Life (film) 12–13 ITT 45 J Japan credit expansion 98 economic growth 36, 39 imagined competitive threat from 221 and quantitative easing 245 speculative bubble (late 1980s) 38–9, 280 jobbers 25, 28, 29–30 Jobs, Steve 70, 71, 162, 196 Johnson, Simon 302 Jordan Marsh department store 46, 90 J.P.


pages: 316 words: 117,228

The Code of Capital: How the Law Creates Wealth and Inequality by Katharina Pistor

Andrei Shleifer, Asian financial crisis, asset-backed security, barriers to entry, Bear Stearns, Bernie Madoff, Big Tech, bilateral investment treaty, bitcoin, blockchain, Bretton Woods, business cycle, business process, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collateralized debt obligation, colonial rule, conceptual framework, Corn Laws, corporate governance, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, digital rights, Donald Trump, double helix, driverless car, Edward Glaeser, Ethereum, ethereum blockchain, facts on the ground, financial innovation, financial intermediation, fixed income, Francis Fukuyama: the end of history, full employment, global reserve currency, Gregor Mendel, Hernando de Soto, income inequality, initial coin offering, intangible asset, investor state dispute settlement, invisible hand, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, land reform, land tenure, London Interbank Offered Rate, Long Term Capital Management, means of production, money market fund, moral hazard, offshore financial centre, phenotype, Ponzi scheme, power law, price mechanism, price stability, profit maximization, railway mania, regulatory arbitrage, reserve currency, Robert Solow, Ronald Coase, Satoshi Nakamoto, secular stagnation, self-driving car, seminal paper, shareholder value, Silicon Valley, smart contracts, software patent, sovereign wealth fund, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, trade route, Tragedy of the Commons, transaction costs, Wolfgang Streeck

Almost everyone suffered severe financial distress in the financial crisis, not caused by NC2 alone, but by the business practices for which NC2 was emblematic. New Century filed for bankruptcy already in the spring of 2007. Bear Stearns was forced into a shotgun marriage with JP Morgan Chase in the spring of 2008, as discussed in chapter 3. And Citigroup received several capital 84 c h a P te r 4 injections, first from the sovereign wealth funds of foreign nations (Qatar and Singapore in particular) and eventually from the US government.15 So much for the basic structure of NC2, which is more complex than the trusts we encountered earlier, but the basic structure is still the same. But what about the assets in the pool? Here too we can see remarkable advances in the coding strategies that were meant to enhance the marketability of these assets.

Note that Fannie Mae appears here as the buyer of securitized assets, not as the securitizer, a role that it had played earlier and would assume again after the crisis. NC2’s second most senior tranche found interest among leading financial intermediaries from the United States and elsewhere, including a subsidiary of JP Morgan Chase (Chase Security Lendings Asset m i nti n g d e Bt 85 Management), China’s sovereign wealth fund (the China Investment Corporation, or CIC), and six other investment funds. The third and fourth most senior tranches were acquired by a mix of domestic and foreign banks and investment funds that included, among others, Federal Home Loan Bank of Chicago (US), Fidelity (US), Société Générale (France), and Bayerische Landesbank (a German bank owned by the state of Bavaria).

By 2004, the total volume had increased to $7.2 billion, of which 34 percent were subprime, and by 2005 had reached $18.4 billion with 45 percent subprime. 14. Adam J. Levitin and Susan M. Wachter, “Explaining the Housing Bubble,” Georgetown Law Journal 100, no. 4 (2012):1177–1258, p. 1192. 15. On the role of foreign sovereign wealth funds in stabilizing the global financial system in the fall of 2007, see Katharina Pistor, “Global Network Finance: Institutional Innovation in the Global Financial Market Place,” Journal of Comparative Economics 37, no. 4 (2009):552–567. 16. See FCIC, Financial Crisis Inquiry Report, p. 116 and documents uploaded to the commission’s web page. 17.


pages: 1,373 words: 300,577

The Quest: Energy, Security, and the Remaking of the Modern World by Daniel Yergin

"Hurricane Katrina" Superdome, "World Economic Forum" Davos, accelerated depreciation, addicted to oil, Alan Greenspan, Albert Einstein, An Inconvenient Truth, Asian financial crisis, Ayatollah Khomeini, banking crisis, Berlin Wall, bioinformatics, book value, borderless world, BRICs, business climate, California energy crisis, carbon credits, carbon footprint, carbon tax, Carl Icahn, Carmen Reinhart, clean tech, Climategate, Climatic Research Unit, colonial rule, Colonization of Mars, corporate governance, cuban missile crisis, data acquisition, decarbonisation, Deng Xiaoping, Dissolution of the Soviet Union, diversification, diversified portfolio, electricity market, Elon Musk, energy security, energy transition, Exxon Valdez, facts on the ground, Fall of the Berlin Wall, fear of failure, financial innovation, flex fuel, Ford Model T, geopolitical risk, global supply chain, global village, Great Leap Forward, Greenspan put, high net worth, high-speed rail, hydraulic fracturing, income inequality, index fund, informal economy, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), It's morning again in America, James Watt: steam engine, John Deuss, John von Neumann, Kenneth Rogoff, life extension, Long Term Capital Management, Malacca Straits, market design, means of production, megacity, megaproject, Menlo Park, Mikhail Gorbachev, military-industrial complex, Mohammed Bouazizi, mutually assured destruction, new economy, no-fly zone, Norman Macrae, North Sea oil, nuclear winter, off grid, oil rush, oil shale / tar sands, oil shock, oil-for-food scandal, Paul Samuelson, peak oil, Piper Alpha, price mechanism, purchasing power parity, rent-seeking, rising living standards, Robert Metcalfe, Robert Shiller, Robert Solow, rolling blackouts, Ronald Coase, Ronald Reagan, Sand Hill Road, Savings and loan crisis, seminal paper, shareholder value, Shenzhen special economic zone , Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, smart grid, smart meter, South China Sea, sovereign wealth fund, special economic zone, Stuxnet, Suez crisis 1956, technology bubble, the built environment, The Nature of the Firm, the new new thing, trade route, transaction costs, unemployed young men, University of East Anglia, uranium enrichment, vertical integration, William Langewiesche, Yom Kippur War

Domestic businesses became less competitive in the face of the rising tide of cheaper imports and increasingly embedded inflation. Jobs were lost and businesses couldn’t survive. All of this came to be known as Dutch disease. A partial cure for the disease is to segregate some of these earnings. The sovereign wealth funds that are now such important features of the global economy were invented, in part, as preventative medicine—to absorb this sudden and/or large flow of revenues and prevent it from flooding into the economy and thus, by so doing, insulate the country from the Dutch disease. The second, even more debilitating ailment of the petro-state is a seemingly incurable fiscal rigidity, which leads to more and more government spending—what has been called “the reversed Midas touch.”

You get corruption, inflation, Dutch disease, you name it.”4 While these are the general characteristics that define a petro-state, there are wide variations. The dependence on oil and gas of a small Persian Gulf country is obvious, but its population is also small, which reduces pressures. And it can insulate itself from volatile oil prices through the diversified portfolio of its sovereign wealth fund. A large country like Nigeria that depends heavily on oil and natural gas for government revenues and for its GDP has much less flexibility. Spending is very difficult to rein in. There is also a matter of degree. With 139 million people and a highly developed educational system, Russia possesses a large, diversified industrial economy.

Thus for investors—whether running hedge funds or pension funds, or retail investors—the commodity play was not just about oil itself, but about the booming economies that were using more and more oil.10 TRADING PLACES And now there were a lot more people in the oil market—the paper barrel part of the market—investing with no intention nor any need of ever taking delivery of the physical commodity. There were pension funds and hedge funds and sovereign wealth funds. There were the “massive passives”—the commodity index funds, heavily weighted to oil and with all the derivative trading around them. There were also exchange-traded funds; there were high net-worth individuals; and there were all sorts of other investors and traders, some of them in for the long term, and some of them very short term.


pages: 859 words: 204,092

When China Rules the World: The End of the Western World and the Rise of the Middle Kingdom by Martin Jacques

Admiral Zheng, An Inconvenient Truth, Asian financial crisis, Bear Stearns, Berlin Wall, Bob Geldof, Bretton Woods, BRICs, British Empire, classic study, credit crunch, Dava Sobel, deindustrialization, Deng Xiaoping, deskilling, discovery of the americas, Doha Development Round, energy security, European colonialism, failed state, Fall of the Berlin Wall, flying shuttle, Francis Fukuyama: the end of history, global reserve currency, global supply chain, Great Leap Forward, illegal immigration, income per capita, invention of gunpowder, James Watt: steam engine, joint-stock company, Kenneth Rogoff, land reform, land tenure, lateral thinking, Malacca Straits, Martin Wolf, Meghnad Desai, Naomi Klein, Nelson Mandela, new economy, New Urbanism, one-China policy, open economy, Pearl River Delta, pension reform, price stability, purchasing power parity, reserve currency, rising living standards, Ronald Reagan, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, spinning jenny, Spread Networks laid a new fibre optics cable between New York and Chicago, the scientific method, Thomas L Friedman, trade liberalization, urban planning, Washington Consensus, Westphalian system, Xiaogang Anhui farmers, zero-sum game

After declining for over two decades, commodity prices began to increase around the turn of the century, driven by buoyant economic growth in the developing world, above all from China, until the onset of a global recession reversed this trend, at least in the short run.4 Meanwhile, the stellar economic performance of the East Asian economies, with their resulting huge trade surpluses, has enormously swollen their foreign exchange reserves. A proportion of these have been invested, notably in the case of China and Singapore, in state-controlled sovereign wealth funds whose purpose is to seek profitable investments in other countries, including the West. Commodity-producing countries, notably the oil-rich states in the Middle East, have similarly invested part of their newly expanded income in such funds. Sovereign wealth funds acquired powerful new leverage as a result of the credit crunch, commanding resources which the major Western financial institutions palpably lacked.5 The meltdown of some of Wall Street’s largest financial institutions in September 2008 underlined the shift in economic power from the West, with some of the fallen giants seeking support from sovereign wealth funds and the US government stepping in to save the mortgage titans Freddie Mac and Fannie Mae partly in order to reassure countries like China, which had invested huge sums of money in them: if they had withdrawn these, it would almost certainly have precipitated a collapse in the value of the dollar.

Sovereign wealth funds acquired powerful new leverage as a result of the credit crunch, commanding resources which the major Western financial institutions palpably lacked.5 The meltdown of some of Wall Street’s largest financial institutions in September 2008 underlined the shift in economic power from the West, with some of the fallen giants seeking support from sovereign wealth funds and the US government stepping in to save the mortgage titans Freddie Mac and Fannie Mae partly in order to reassure countries like China, which had invested huge sums of money in them: if they had withdrawn these, it would almost certainly have precipitated a collapse in the value of the dollar. The financial crisis has graphically illustrated the disparity between an East Asia cash-rich from decades of surpluses and a United States cash-poor following many years of deficits.

It is not difficult to imagine what some of these points of difference might be: growing competition and conflict over the sources of energy supplies - in Angola or Venezuela, or wherever; an intensifying dispute over the expanding strategic partnership between the United States and India; Chinese firms, awash with cash, threatening to take over American firms and provoking a hostile reaction (as happened in the case of the oil firm Unocal); the Chinese sovereign wealth fund, its coffers filled with the country’s huge trade surplus, seeking to acquire a significant stake in US firms that are regarded as of strategic importance;166 and a pattern of growing skirmishes over the militarization of space.167 Moreover, China being culturally so different from the United States, in a way that was not nearly as true of the USSR, only adds to the possibility of mutual misunderstanding and resentment.


pages: 484 words: 136,735

Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis by Anatole Kaletsky

"World Economic Forum" Davos, Alan Greenspan, bank run, banking crisis, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Black Swan, bond market vigilante , bonus culture, Bretton Woods, BRICs, business cycle, buy and hold, Carmen Reinhart, classic study, cognitive dissonance, collapse of Lehman Brothers, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, currency manipulation / currency intervention, currency risk, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, eat what you kill, Edward Glaeser, electricity market, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, F. W. de Klerk, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, foreign exchange controls, full employment, geopolitical risk, George Akerlof, global rebalancing, Goodhart's law, Great Leap Forward, Hyman Minsky, income inequality, information asymmetry, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, long and variable lags, Long Term Capital Management, low interest rates, mandelbrot fractal, market design, market fundamentalism, Martin Wolf, military-industrial complex, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, Nelson Mandela, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, oil shock, paradox of thrift, Pareto efficiency, Paul Samuelson, Paul Volcker talking about ATMs, peak oil, pets.com, Ponzi scheme, post-industrial society, price stability, profit maximization, profit motive, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, rising living standards, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, seminal paper, shareholder value, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, statistical model, systems thinking, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, Vilfredo Pareto, Washington Consensus, zero-sum game

U.S. growth in the second quarter had just been revised upwards from 1.2 percent to 1.8 percent13 and the biggest worry was no longer the credit crunch but the threat of inflation caused by overly rapid growth in China, India, and other emerging nations. The credit crunch was turning out to be less damaging than generally expected for several reasons. One was the continuing growth of Asia and the seemingly inexhaustible supply of excess savings in that part of the world. These savings were made available by the Sovereign Wealth Funds (SWFs) of Abu Dhabi, Singapore, Korea, China, and other countries to Western financial institutions that needed to rebuild their capital after their initial subprime losses—which helped maintain financial stability throughout the first twelve months of the subprime crisis. Another favorable factor, almost unnoticed by politicians and media commentators, was that the U.S. economy was displaying its usual flexibility in responding to the property bust.

The real significance of the rescue, which rapidly turned into paralyzing shock and awe for financial markets, was what it did to the shareholder stakes in Fannie and Freddie. These stakes were rendered essentially worthless—including some $20 billion of new capital subscribed just a few months earlier by long-term shareholders. Among these confiscated shareholders were several foreign governments and Sovereign Wealth Funds. They had provided badly needed capital to U.S. financial institutions throughout the credit crunch and had invested in Fannie and Freddie shares with the U.S. Treasury’s active encouragement and on the basis of a public statement by their regulator, James Lockhart of the Federal Housing Finance Agency, that they had sufficient capital and that their cash needs were adequately covered until at least the end of 2009.28 It later emerged that Paulson, to find a legal justification for his seizure, put intense political pressure on Lockhart to reverse his ruling and declare that Fannie and Freddie were in danger of insolvency, just two months after the FHFA analysis had found them to be adequately capitalized.

The GSE seizure thus raised a Sword of Damocles over every U.S. financial institution that might conceivably need to raise any new capital anytime in the foreseeable future—first and foremost Lehman, but also Merrill Lynch, AIG, Morgan Stanley, and Citigroup. Following the GSE rescue, it was out of the question for American banks to raise new capital from the governments or sovereign wealth funds in Abu Dhabi, Singapore, or Saudi Arabia, regardless of how hard the U.S. treasury secretary, or even the president himself, might rattle the begging bowl. Amazingly, this unintended consequence of the GSE seizure seemed never to receive a moment’s consideration in the Treasury or the Fed.30 As a result, the GSE seizure effectively demolished the first of the two possible lines of defense discussed at the beginning of this chapter for banks facing a loss of confidence.


pages: 345 words: 100,989

The Pyramid of Lies: Lex Greensill and the Billion-Dollar Scandal by Duncan Mavin

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Adam Neumann (WeWork), air freight, banking crisis, Bernie Madoff, Big Tech, Boeing 737 MAX, Boris Johnson, Brexit referendum, British Empire, carbon footprint, coronavirus, corporate governance, COVID-19, Credit Default Swap, democratizing finance, Donald Trump, Eyjafjallajökull, financial engineering, fixed income, global pandemic, global supply chain, Gordon Gekko, Greensill Capital, high net worth, Kickstarter, lockdown, Long Term Capital Management, low interest rates, Masayoshi Son, means of production, Menlo Park, mittelstand, move fast and break things, NetJets, Network effects, Ponzi scheme, private military company, proprietary trading, remote working, rewilding, Rishi Sunak, rolodex, Silicon Valley, skunkworks, SoftBank, sovereign wealth fund, supply chain finance, Tim Haywood, Vision Fund, WeWork, work culture

Greensill, the document points out, was backed by giant, global investors. Investors could get their money back with just a few days’ notice. What could possibly go wrong? IN INTERVIEW AFTER interview, Credit Suisse executives were always clear that the funds were only ever sold to qualified investors – conjuring up the image of sophisticated pension funds or sovereign wealth funds with armies of accountants and experts managing money on behalf of an entire company or country. Or super-wealthy individuals who can afford to hire the best advisers, and who ought to know what they’re getting into. Some of the investors in the Credit Suisse funds even took a long hard look at Greensill itself, spending months combing over its accounts and business practices before committing to the funds.

It’s a rule of high finance that if one big financial firm does a deal, others will probably assume that their rivals did their work properly and follow suit. Masayoshi Son, the CEO of giant Japanese conglomerate SoftBank, had launched the $100 billion Vision Fund in 2017. He staked about $28 billion of SoftBank’s own money; Saudi Arabia’s sovereign wealth fund put up another $35 billion and about $15 billion came from Mubadala Investment Company, Abu Dhabi’s wealth fund. The rest came from a collection of businesses and major global investors. Within a few months, the Vision Fund became the most powerful technology investor in the world. At its head was a former Deutsche Bank executive named Rajeev Misra.

By October 2019, the global business elite were flocking back in their thousands, attending the so-called ‘Davos in the desert’ finance summit in Riyadh and showing up with the aim of striking big deals. Lex had good reason to join the parade of bankers to the Gulf. For starters, the Saudi sovereign wealth fund, known as the Public Investment Fund (PIF), was the single largest investor in SoftBank’s Vision Fund. That stake also meant Saudi Arabia was effectively a major shareholder in Greensill too. There were also potentially lucrative projects to work on. MBS’s modernization plan for Saudi involves huge infrastructure spending – including a vast new, futuristic city that would feature high-speed trains and skyscrapers on a scale that dwarfs the tallest buildings in New York or London.


pages: 234 words: 63,149

Every Nation for Itself: Winners and Losers in a G-Zero World by Ian Bremmer

airport security, banking crisis, barriers to entry, Berlin Wall, blood diamond, Bretton Woods, BRICs, capital controls, clean water, creative destruction, Deng Xiaoping, Doha Development Round, energy security, European colonialism, failed state, global rebalancing, global supply chain, Global Witness, income inequality, informal economy, information security, Intergovernmental Panel on Climate Change (IPCC), Julian Assange, Kickstarter, Martin Wolf, mass immigration, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, Nelson Mandela, Nixon shock, Nixon triggered the end of the Bretton Woods system, no-fly zone, nuclear winter, Parag Khanna, purchasing power parity, reserve currency, Ronald Reagan, smart grid, South China Sea, sovereign wealth fund, special economic zone, Stuxnet, trade route, uranium enrichment, Washington Consensus, WikiLeaks, Yom Kippur War

The use of national oil companies allows the leadership to ensure that China’s long-term energy needs are met, in part by arming these firms with the financial resources and political influence they need to secure contracts with the governments of commodity-producing countries. Other state-owned enterprises and politically loyal national champions bolster the state’s ability to direct resources and create jobs to reinforce stability. State-run banks and sovereign wealth funds help ensure that capital is directed to support these and other projects. A growing number of Chinese companies have become much more competitive and now see foreign companies not as potentially useful partners but as rivals for local market share, and they’re using political connections within the bureaucracy to craft investment rules and regulations that favor local firms at the expense of their foreign competitors.

With every nation for itself, the next wave of would-be nuclear powers will see that—and may decide that they too can safely ignore demands from established powers. COMPANIES AND THE COMPETITIVE EDGE The G-Zero will provide many different kinds of companies and institutions with important advantages. First, well-managed and well-positioned state-owned enterprises, politically loyal national champions, favored banks, and sovereign wealth funds will continue to profit from the competitive boost their governments can provide them. Stories of Chinese and Russian policymakers finding creative ways to tip the commercial playing field to favor their favorites, both at home and abroad, have become well known, but we’re also seeing this trend in emerging-market democracies.

., 121 NGOs, 135 Nigeria, 48, 72, 177, 182 Nile, 106 Nixon, Richard, 44, 49–50 Noda, Yoshihiko, 20 North Africa, 18, 48, 136, 139, 175, 187 North Atlantic Treaty Organization (NATO), 17, 19, 30, 117, 133–34, 192 North Korea, 70, 91, 123, 125, 152, 154, 165, 208n nuclear program of, 15, 57, 58–59, 124, 158, 161 Norway, in Arctic Council, 96–97 Nuclear Non-Proliferation Treaty (NPT), 57–59 Obama, Barack, 8–9, 11, 64, 65, 100, 113, 190, 202n oil, 3, 22, 23, 30–31, 37, 47–49, 58, 61, 114, 116, 117, 120, 125–26, 127, 141–42, 147, 160, 181–82 in Arctic, 97 OPEC’s embargos of, 48–49, 50 as priced in dollars, 81–82 oilseeds, 100 Oman, 71 Organization of the Petroleum Exporting Countries (OPEC), 48–49, 50, 100 Paine, Thomas, 185 Pakistan, 14, 57, 70, 115, 161, 182, 183 food riots in, 98 India’s conflict with, 25, 70, 152, 158, 165–66 U.S. drone attacks in, 111 Palestinians, 17, 25, 136, 158 Pan Am Flight 103, 139 Panetta, Leon, 73 PayPal, 75 Peace Corps, 90–91 Pearl Harbor, 187 People’s Action Party, Singapore, 121 People’s Liberation Army, 146 Peru, 177 Petrobras, 125–26 Pew Research Center, 13 Philippines, 23, 51, 70, 114, 129, 194 pivot states, 115–20, 136, 140–41, 155, 165, 177, 178–79 Poland, 55 pollution, 104–5 population growth, 104 Portugal, 17 power grids, 169, 171 protectionism, 77–79 protectors, 128–30 Prussia, 167 Putin, Vladimir, 24, 54, 82, 137, 141, 182 Qatar, 48, 71 Rapaport, 132 Raytheon, 129 Reagan, Ronald, 65 “Red Dragon Rising: The Coming War with China” (board game), 170–71 referees, 133–35 regional development banks, 38 Research in Motion (RIM), 33 Resolution 1973, 192 Roach, Stephen, 12 rogue states, 123–25, 138–39 Roosevelt, Franklin, 42–43 Rosneft, 127 Royal Dutch Shell, 97 Rudd, Kevin, 203n Russia, 24, 28, 30, 54, 55, 69, 73, 77, 84, 102, 121, 122, 125, 141, 168, 169, 170, 177, 183, 203n in Arctic Council, 96, 97 climate change and, 94 default on debt in, 37 energy exported by, 30 Georgia’s war with, 32, 141 grain exports banned by, 102 Internet in, 88, 89, 91, 92 nuclear program of, 59 oil prices and, 141 Peace Corps unwelcome in, 90–91 state capitalism in, 78 suspicions of U.S. in, 91 Ukraine’s ties with, 54, 137–38, 141 water security in, 105 Russian Empire, 167, 182 Rwanda, 32, 106 Sarkozy, Nicolas, 9, 38 Sata, Michael, 119 Saudi Arabia, 26, 30, 33, 48, 67, 69, 71, 114, 128, 155, 182 foreign land purchased by, 102 grain production in, 104 Internet in, 92 local hegemony of, 175–76 oil of, 114 state capitalism in, 78 Schäuble, Wolfgang, 18 Schengen Agreement, 18, 176 Schularick, Moritz, 158 Scowcroft, Brent, 163 September 11, 2001, terrorist attacks of, 13, 32, 64, 188 Serageldin, Ismail, 104 shadow states, 136–38 Shanghai Cooperation Organization, 122 Shaw, George Bernard, 37 Shi Lang, 23 Siemens, 127 Sierra Leone, 130 Singapore, 51, 71, 120, 121–22, 194 Singh, Manmohan, 26 smart grids, 72, 73 Social Security, 12, 189 Somalia, 14, 183 Sony, 75 Soreq Nuclear Research Center, 207n South Africa, 10, 26, 28, 72, 131, 177 biofuel production in, 100 South Asia, water scarcity in, 104 South China Sea, 23, 129 Southeast Asia, 59, 102 urbanization in, 99 Southern African Development Community, 120 South Korea, 15, 51, 55, 70, 71, 114, 129, 165, 173, 208n foreign land purchased by, 102 U.S. beef banned by, 103 sovereign wealth funds, 125 Soviet Union, 39, 44, 45, 47, 52, 53, 54, 72–73, 138, 168, 173, 186 coup attempt in, 92 efforts at reform in, 179–80 nuclear program of, 57 post–World War II reconstruction needed in, 39–40 shifting borders of, 182 Spain, 17, 169 separatist movements in, 181 Spiegel, Der, 8 Spielberg, Steven, 119 Splinternet, 90 Standard Chartered Bank, 3 State Development & Investment Corporation (SDIC), 129, 140 state-owned companies, 78–79, 119, 125, 139–40, 160 in China, 59, 61, 86, 144, 148 Stoltenberg, Jens, 9 Strategic Arms Reduction Treaty (2010), 59 Strategy & Tactics, 170–71 Strauss-Kahn, Dominique, 27 Stuxnet, 56, 72–73 Sudan, 32, 106, 119 Sweden, in Arctic Council, 96–97 Syria, 48, 69, 112, 117, 123, 175, 183 Taiwan, 51, 114, 129, 172–73 as exposed state, 136 Tanzania, 106 tariffs, 79 Tata Group, 128 TD-SCDMA, 86 tech bubble, 64 telecommunications standards, 33, 83–94 terrorism, 3, 70, 93, 116, 128, 170, 183 Texas, 47, 48 Thailand, 51, 71, 114, 124, 168–69, 194 collapse of currency in, 37 multinationals in, 80 water security in, 105 3G mobile phone standard, 86 Three Gorges Dam, 105 Tiananmen Square, 53, 59, 148, 163 Time, 75 trade, global, 68, 70–71, 76–80, 178, 193–95 protectionist trend in, 77–79 trade balances, 32 trade routes, 15, 24, 59 Trans-Pacific Partnership, 71 Treasury Department, U.S., 38 Tunisia, 19, 69, 112, 175 Turkey, 3, 25, 26, 55, 69, 76, 141, 148, 155, 161, 166, 179, 187 as pivot state, 117 Turkmenistan, 54 Twitter, 91 Uganda, 72, 106 Ukraine, 54, 141, 177 as shadow state, 137–38 United Arab Emirates, 26, 48, 71 United Nations, 44, 89, 97, 104, 131 Food and Agriculture Organization, 100, 103 General Assembly of, 21, 44 Security Council of, 3, 25, 44, 57, 192 World Food Program of, 103 United States, 16, 21, 25, 30, 39, 44, 47, 50, 122, 148–49, 170, 182 in Arctic Council, 96–97 as Asian power, 70–71 beef production in, 103, 105 biofuels produced in, 100 United States (cont.)


pages: 403 words: 105,550

The Key Man: The True Story of How the Global Elite Was Duped by a Capitalist Fairy Tale by Simon Clark, Will Louch

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, An Inconvenient Truth, anti-communist, Berlin Wall, Bernie Madoff, British Empire, clean water, collapse of Lehman Brothers, colonial rule, coronavirus, corporate governance, COVID-19, dark triade / dark tetrad, do well by doing good, Donald Trump, fake news, forensic accounting, high net worth, impact investing, income inequality, Jeffrey Epstein, Kickstarter, load shedding, low cost airline, Mahatma Gandhi, megacity, Menlo Park, Michael Milken, Mohammed Bouazizi, Nelson Mandela, offshore financial centre, planetary scale, plutocrats, Ponzi scheme, profit maximization, rolling blackouts, Ronald Reagan, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, SoftBank, sovereign wealth fund, Suez crisis 1956, TED Talk, The Fortune at the Bottom of the Pyramid, trade route, Virgin Galactic, WikiLeaks, young professional

The American private equity firm had expanded Care by refurbishing old hospitals and opening new ones throughout India. Advent hired the investment bank Moelis & Co. to manage an auction for Care. The Moelis bankers invited hospital operators, private equity firms, and sovereign wealth funds to make offers, and a fierce bidding war ensued. Abraaj was pitted against the American private equity firm TPG and the Singaporean sovereign wealth fund Temasek. Thomson Medical, a hospital operator in Singapore, also competed. Khawar was eager to win. He wanted Care’s hospitals and doctors to form the backbone of the Abraaj healthcare fund. His plan was to expand Care internationally, across Asia and Africa.

“Countries like Libya, Yemen, Syria, Iraq and Iran will require more than $500 billion in the next two decades,” Kito wrote to Arif in an email in May 2016. “The need is for a Marshall Plan 2.0—a plan that recognises the key role that private sector equity has. “Motivated capital will have to be explored and developed. Governments, Sovereign Wealth Funds, Multilateral Financial Institutions, and Ultra High Net Worth individuals are searching for means to move from aid to sustainable funding of socially valuable initiatives. In addition, there is also faith based funding. Palestine represents an intersection between Christianity and Islam.

Weeks before Memon was due to retire, after serving his country for more than thirty years, he was unceremoniously transferred from his prestigious position as chief of the Federal Investigation Agency. He resigned in protest. A spokesman for Prime Minister Khan declined to comment on Memon. The new source who had contacted us by email said that Arif was working with the prime minister and his finance minister, Asad Umar, to create a sovereign wealth fund. The fund, called Sarmaya, would control Pakistan’s state-owned companies, and Arif and other former Abraaj employees were being considered as executives for the fund—positions that would give them great influence in Pakistan. A spokesman for the government gave a curt response when we called to ask what Arif and the politicians were working on.


pages: 432 words: 106,612

Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever by Robin Wigglesworth

Albert Einstein, algorithmic trading, asset allocation, Bear Stearns, behavioural economics, Benoit Mandelbrot, Big Tech, Black Monday: stock market crash in 1987, Blitzscaling, Brownian motion, buy and hold, California gold rush, capital asset pricing model, Carl Icahn, cloud computing, commoditize, coronavirus, corporate governance, corporate raider, COVID-19, data science, diversification, diversified portfolio, Donald Trump, Elon Musk, Eugene Fama: efficient market hypothesis, fear index, financial engineering, fixed income, Glass-Steagall Act, Henri Poincaré, index fund, industrial robot, invention of the wheel, Japanese asset price bubble, Jeff Bezos, Johannes Kepler, John Bogle, John von Neumann, Kenneth Arrow, lockdown, Louis Bachelier, machine readable, money market fund, Myron Scholes, New Journalism, passive investing, Paul Samuelson, Paul Volcker talking about ATMs, Performance of Mutual Funds in the Period, Peter Thiel, pre–internet, RAND corporation, random walk, risk-adjusted returns, road to serfdom, Robert Shiller, rolodex, seminal paper, Sharpe ratio, short selling, Silicon Valley, sovereign wealth fund, subprime mortgage crisis, the scientific method, transaction costs, uptick rule, Upton Sinclair, Vanguard fund

The Washington Post may have eschewed the embryonic index funds that had cropped up by the mid-1970s, but today those funds are gobbling up vast chunks of the investment industry. The public universe of index funds stood at almost $16 trilllion by the end of 2020, according to Morningstar, a prominent data provider on the investment industry. But many big pension plans and sovereign wealth funds also have huge internal index-tracking strategies, or pay an investment group to do it for them outside of a formal fund structure. BlackRock, the world’s biggest money manager, estimated in 2017 that there was another $6.8 trillion in nonpublic passive equity strategies, managed internally or by the likes of BlackRock.

Moreover, just as BlackRock was preparing to unveil the deal, its financing suddenly looked dicey. Part of the acquisition would be paid for in BlackRock shares. But Barclays needed a big chunk of cash as well to avert a government bailout, so Fink had stitched together a multibillion-dollar financing package by calling on many of BlackRock’s clients. The Qatari sovereign wealth fund was supposed to stump up $3 billion, but at the last minute—after Fink had already secured the approval of his board—the Qataris prevaricated. It appeared that a local potentate was keen to get in on the deal personally. But Fink wanted a bunch of strong institutional investors to support the deal, not individuals, no matter how rich or royal they were.

So on June 10, Fink suddenly found himself with just twenty-four hours to raise the $3 billion—a massive task at a time when many were still reeling from the financial crisis—to save the acquisition. That Wednesday, Fink ensconced himself at BlackRock’s headquarters and called in the favors of a lifetime. A call to the China Investment Corporation, the country’s sovereign wealth fund, led to a $1 billion commitment within an hour.2 But he had to hit up a panoply of other potential investors until 4 a.m. that night, before returning to the office at 7:30 a.m. to continue working the phones up until when the deal was supposed to be made public. It worked. At 8:20 p.m. in New York on June 11, 2009, BlackRock announced that it had struck an agreement to buy BGI from Barclays in a deal valued at the time at $13.5 billion, through a combination of cash and the UK bank acquiring a 20 percent stake in BlackRock.


pages: 288 words: 76,343

The Plundered Planet: Why We Must--And How We Can--Manage Nature for Global Prosperity by Paul Collier

agricultural Revolution, Berlin Wall, business climate, carbon tax, Doha Development Round, energy security, food miles, G4S, Global Witness, information asymmetry, Kenneth Arrow, megacity, new economy, offshore financial centre, oil shock, price elasticity of demand, profit maximization, rent-seeking, Ronald Coase, Scramble for Africa, search costs, sovereign wealth fund, stem cell, Stewart Brand, Tragedy of the Commons

When the oil arrives it is expected to generate revenues of between 4 and 5 percent of GDP, so the government hastily spent around four times the revenues that it anticipated. However, more prudent governments take the advice seriously because it approximates quite closely what the Norwegian government has been doing with its oil revenues. Revenues from natural assets are placed into a special public fund known as the Sovereign Wealth Fund, which is earmarked for future generations and invested in international capital markets. Although stock markets are very volatile, overall the system has served Norway well: according to the 2009 Human Development Index it offers the best quality of life in the world. Unsurprisingly, it has become a model for those governments of low-income countries which wish to behave responsibly.

But there are limits to how volatile that domestic investment can be without making the country unstable. So during boom time much of the savings will need to be parked abroad temporarily in safe, liquid financial assets. The role of those savings abroad is to smooth the investment process. Rather than a Sovereign Wealth Fund the country needs a Sovereign Liquidity Fund of short-term assets to buffer the shocks to revenue. How far should such buffering go? Simulations based on the past volatility of commodity prices suggest that in order fully to smooth out the highs and the lows, and spending versus saving, a very large Liquidity Fund would be needed.

See also carbon emissions Liberia, 55, 69 Libya, 121–22, 218 The Life You Can Save (Singer), 24 light bulbs, 188 liquidity funds, 118–19 lobby groups and lobbying and ethanol, 223–24 fishing lobbies, 163, 170 and public spending, 135 lobsters, 154, 202–3 logistics and modern agriculture, 216–17 low-income countries and absorption problem, 133 and boom times, 115 and discovering natural assets, 74 and economic policy, 61 and free-rider problem, 192 and global industrial output, 185 and governance, 47 and Hotelling Rule, 107 and human development, 109 and implementation of public investments, 136–38 and international aid, 146 and need for capital, 110–14 and Norwegian model, 128 and peasant agriculture, 213 and plunder of natural assets, 125 and revenue sources, 100–101 and savings rate, 119–20 and tax policy, 100 See also developing countries luck, 20, 71, 196–97 Madagascar, 218 maize, 222–23 Malawi, 223 Malaysia, 48, 93, 94, 137 mankind, extinction of, 16 man-made assets, 28, 66, 99, 201 manufacturing, 180 Marie Antoinette, Queen, 221 Mexico, 6 Middle East, 32, 50, 193 middle-income countries and industry, 185, 197 and investments, 133, 137 and trade restrictions, 193 and vulnerability to plunder, 6 modern, birth of, 7 Mongolia, 89 monopolies, 69–70, 74, 219 Mugabe, Robert, 199, 218 Mumbai, India, 139 national identity, 31 national income accounting, 120–21 nationalism, 243 nationalization of resource extraction, 92–94 national parks, 166 nation states, 27, 237 natural assets, defining features of, 160 NaturalResourceCharter.org, 234 nature and agriculture, 8 man’s relationship with, 7 ownership of, 4, 16–23, 29, 168, 194 special status of, 10, 15, 26 vulnerability of, 15–16 need, Utilitarian principle of, 24, 25, 28, 31 Newsweek, 132 Niger Delta, 140 Nigeria banks in, 149 and capital flight, 144 and Cement Armada, 141, 144 construction in, 147, 148 corruption in, 37, 128–30 exports, 101 and inflated population figures, 198 and infrastructure, 140–41 Lagos, 139, 140, 141 oil of, 37, 41, 47, 101, 119–20, 122, 139–40 population shifts in, 138 and public distribution of revenues, 143 savings rate of, 121, 123 and taxation, 89–90 nitrates, 106 Nokia, 18 nonagricultural commodities, 42, 45 nongovernmental organizations (NGOs), 8, 231–32, 233 nonrenewable natural assets and African countries, 95 and boom times, 115 and custody principle, 155–56, 157 and ethics of depletion, 98–99, 230 and Hotelling Rule, 104, 155 and Permanent Income, 102 prices of, 104–7 renewable assets contrasted with, 157, 161 revenues from, 99 and sustainability, 98, 100–102, 154 See also specific assets, including coal and oil North America, 3, 91 North Atlantic Treaty Organization (NATO), 225 North Korea, 242 North Sea, 48, 93 Norway Arctic border of, 162 investment model of, 109, 113–14, 117–18, 128, 143 oil in, 38, 47, 48, 93, 109 and Sovereign Wealth Fund, 109 and state-owned oil company, 93–94 nuclear power, 181, 194 Obama, Barack, 238, 239, 240 Obasanjo, Olusegun, 129, 130 oceans, 167, 168–69. See also fisheries OECD countries and fishing, 163 and governance of natural assets, 7 prospecting of, 67–68 and subsoil assets, 63, 65, 66 and the world economy, 6 oil and Angola, 20, 41, 67, 122 in the Arctic, 29–30, 34, 162 and bio-fuels, 226 and bottom billion countries, 67, 68 and Britain, 65 and Cameroon, 81 demand for, 194 and France, 182 and Ghana, 108 and Indonesia, 93 and Kuwait, 32 and Malaysia, 93 and Mexico, 6 nationalization of, 93–94 and Nigeria, 41, 47, 101, 119–20, 139–40 and Norway, 38, 47, 48, 93, 109 oil booms, xiii, 41–42 potential exhaustion of, 106 price of, 194 returns on, 88 and Sierra Leone, 126 and technology, 106, 194 Olken, Benjamin, 59 opportunism, 29–30 organic food, 16, 213–14 Organisation for Economic Co-operation and Development (OECD), 82, 164, 225.


pages: 318 words: 77,223

The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse by Mohamed A. El-Erian

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, balance sheet recession, bank run, barriers to entry, Bear Stearns, behavioural economics, Black Monday: stock market crash in 1987, break the buck, Bretton Woods, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, collapse of Lehman Brothers, corporate governance, currency peg, disruptive innovation, driverless car, Erik Brynjolfsson, eurozone crisis, fear index, financial engineering, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, fixed income, Flash crash, forward guidance, friendly fire, full employment, future of work, geopolitical risk, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, income inequality, inflation targeting, Jeff Bezos, Kenneth Rogoff, Khan Academy, liquidity trap, low interest rates, Martin Wolf, megacity, Mexican peso crisis / tequila crisis, moral hazard, mortgage debt, Norman Mailer, oil shale / tar sands, price stability, principal–agent problem, quantitative easing, risk tolerance, risk-adjusted returns, risk/return, Second Machine Age, secular stagnation, sharing economy, Sheryl Sandberg, sovereign wealth fund, The Great Moderation, The Wisdom of Crowds, too big to fail, University of East Anglia, yield curve, zero-sum game

So it goes with efforts to make the financial system safer since the financial crisis.”2 This development is accentuating a growing imbalance between the shrinking intermediaries in the marketplace (the broker-dealers) and the growing number of end users (asset managers of both the traditional and nontraditional ilk, as well as sovereign wealth funds, pension managers, insurance companies, etc.). It is a durable structural change that, in addition to the liquidity implications discussed in the next chapter, will make market volatility more common, together with prolonged price overshoots, price contagion, and then sudden and sharp reversals.

As such, the intermediation capacity that sits at the core of the established market system and lubricates its functioning has been materially shrunk. Not so for those that access it. The last few years have seen a meaningful growth in the size and complexity of end users, be they asset managers, hedge funds, pensions, insurance companies, or sovereign wealth funds. Yet, having to go through a diminished middle, the pipes that link them have done more than fail to keep up in relative terms; they have actually contracted. Figure 10. Intermediaries and end users Two factors amplify the consequences of this growing imbalance, which is particularly acute for certain asset classes that lack inherent depth (such as emerging-market corporates and high-yield bonds) as well as products that many investors seem to believe are always highly liquid at acceptable prices (from ETF structures to TIPs).

Despite analytical progress, the focus on enlarging the scope of private-public partnerships continues to lag. The potential is definitely there. As an example, just think of, on the one hand, severely underfunded infrastructure investment needs and, on the other hand, the large pool of long-term capital looking for long-dated opportunities (be they sovereign wealth funds, insurance companies, or pensions). It is a gap that is especially glaring given that a part of this pool is also seeking to have socially beneficial impacts. Yet too little has been done by governments to offer a matching menu of partnership options, and this despite the fact that, from roads to city parking facilities, there are encouraging operational examples.


pages: 151 words: 38,153

With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don't Pay Enough by Peter Barnes

adjacent possible, Alfred Russel Wallace, banks create money, basic income, Buckminster Fuller, carbon tax, collective bargaining, computerized trading, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, diversified portfolio, driverless car, en.wikipedia.org, Fractional reserve banking, full employment, Glass-Steagall Act, hydraulic fracturing, income inequality, It's morning again in America, Jaron Lanier, Jevons paradox, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, land reform, Mark Zuckerberg, Money creation, Network effects, oil shale / tar sands, Paul Samuelson, power law, profit maximization, quantitative easing, rent-seeking, Ronald Coase, Ronald Reagan, Silicon Valley, sovereign wealth fund, Stuart Kauffman, the map is not the territory, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Upton Sinclair, Vilfredo Pareto, wealth creators, winner-take-all economy

Lanier thinks the Siren Servers should pay for our personal information and mind time, though he doesn’t say how.13 One possibility is to charge tiny fees for every ad click and put that money into the dividend pot. Other countries are experimenting, too. Dozens have created what are generically called sovereign wealth funds, which together own more than $6 trillion in assets. The largest of these, in Norway, has assets in excess of $1 million per Norwegian.14 If it paid dividends of 4 percent, everyone in Norway would receive about $40,000 a year. That, no doubt, seems excessive to Norwegians, so the fund pays 4 percent to their government instead.

See also Medicare; Social Security achievements of, 87–88 lessons of, 40–42 shared wealth dividends and, 124–125 universality and, 40–41 Social Security, 20, 38–40 as deferred wage, 27 dividends connected to, 87–88 growth of, 41–42 individual/employer contributions to, 84 privatization of, 21 Social Security Act, 38–40 South Africa, 131 Sovereign wealth funds, 129 Spectrum use, 94 Sports industry, 126 Springsteen, Bruce, 13 Stiglitz, Joseph, 55–56 Stocks and bonds. See also Universal stock ownership employee stock ownership plans (ESOPs), 81–82 potential revenue from transaction fees, 143 stock offers, 46 Student loans, 21 Suarez Industries, 26 Sugarscape, 31 Sulfur dioxide emissions, 99 Surplus production capacity, 7 Sweden, 19, 113 Switzerland, 129 Systems, defined, 10 T Taxation absurd tax (Smith), 52 carbon taxing, 113–115 of co-owned wealth, 64 financial transaction taxes, 143 negative income tax, 80–81 as political war zone, 85 redistributory schemes and, 86 rent and, 51 value added taxes (VATs), 140–141 Tax credits, 77 Tax cuts, 21 Republicans and, 22 Teachers, 23–24 Tea Party, 110, 111 Theobald, Robert, 80 Timber, rent from, 145 Tobin, James, 80 Tocqueville, Alexis de, 16 Townsend, Francis, 132–133 Townsend Plan, 133–134 Trademarks, rent from, 144 Transformative ideas, 127 Turner, Lord Adair, 91–92 U Unemployment insurance, 19 job training and, 25 Roosevelt, Franklin D. and, 38–39 Unions.


pages: 434 words: 114,583

Faster, Higher, Farther: How One of the World's Largest Automakers Committed a Massive and Stunning Fraud by Jack Ewing

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", 1960s counterculture, Asilomar, asset-backed security, Bear Stearns, Berlin Wall, business logic, cognitive dissonance, collapse of Lehman Brothers, corporate governance, crossover SUV, Fall of the Berlin Wall, financial engineering, Ford Model T, full employment, hiring and firing, independent contractor, Kaizen: continuous improvement, McMansion, military-industrial complex, self-driving car, short selling, short squeeze, Silicon Valley, sovereign wealth fund, Steve Jobs, subprime mortgage crisis

But it wasn’t just speculators who were unhappy with Porsche’s financial sleight of hand. Volkswagen’s largest outside shareholder was Norges Bank Investment Management (NBIM), which administers Norway’s oil riches on behalf of the country’s citizens. By some measures, NBIM, an arm of the country’s central bank, is the largest sovereign wealth fund in the world. In October 2009, the fund addressed a bluntly worded letter to Ferdinand Piëch and the Volkswagen supervisory board expressing dissatisfaction about the terms of Volkswagen’s acquisition of Porsche. The deal “was designed to suit the needs of the Porsche controlling families at the expense of Volkswagen and its non-controlling owners,” wrote Anne Kvam, the Norway fund’s global head of corporate governance, and Ola Peter Krohn Gjessing, a senior analyst.

The board members listened impassively from a stage. With less than 11 percent of Volkswagen’s voting shares in the hands of outsiders, they could easily ignore such criticism. The families as well as the state of Lower Saxony stood behind management. So did the company’s other major shareholder, the sovereign wealth fund of Qatar. Together, they crushed a motion by dissident shareholders to remove Pötsch as chairman of the supervisory board on the grounds that he had been chief financial officer when the wrongdoing was taking place. Speaking at the meeting, Müller continued to give the impression that the fraud was perpetrated by a small number of employees.

(The other family members are Louise Kiesling, a niece of Ferdinand Piëch; Hans Michel Piëch, a brother of Ferdinand; Wolfgang Porsche, a cousin of Ferdinand and spokesman for the Porsche family; and Ferdinand Oliver Porsche, Wolfgang’s brother.) Annika Falkengren, a Swedish banker, is the only shareholder representative on the Volkswagen supervisory board who is not affiliated with the families, Lower Saxony, or the sovereign wealth fund of Qatar. The other ten members of the supervisory board are worker representatives, in line with German law. There is a shortage of outside voices, and no apparent will for reform. It would be a tragedy if, eight decades after the brick walls of the Volkswagenwerk rose on the banks of the Mittelland Canal to build Ferdinand Porsche’s “people’s car,” his descendants were the ones ultimately responsible for the Volkswagen’s demise.


pages: 700 words: 201,953

The Social Life of Money by Nigel Dodd

"hyperreality Baudrillard"~20 OR "Baudrillard hyperreality", accounting loophole / creative accounting, bank run, banking crisis, banks create money, behavioural economics, Bernie Madoff, bitcoin, Bitcoin Ponzi scheme, blockchain, borderless world, Bretton Woods, BRICs, business cycle, capital controls, capitalist realism, cashless society, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, commoditize, computer age, conceptual framework, credit crunch, cross-subsidies, currency risk, David Graeber, debt deflation, dematerialisation, disintermediation, Dogecoin, emotional labour, eurozone crisis, fiat currency, financial engineering, financial exclusion, financial innovation, Financial Instability Hypothesis, financial repression, floating exchange rates, Fractional reserve banking, gentrification, German hyperinflation, Goldman Sachs: Vampire Squid, Herbert Marcuse, Hyman Minsky, illegal immigration, informal economy, interest rate swap, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, Kickstarter, Kula ring, laissez-faire capitalism, land reform, late capitalism, liberal capitalism, liquidity trap, litecoin, London Interbank Offered Rate, M-Pesa, Marshall McLuhan, means of production, mental accounting, microcredit, Minsky moment, mobile money, Modern Monetary Theory, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, National Debt Clock, Neal Stephenson, negative equity, new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, Occupy movement, offshore financial centre, paradox of thrift, payday loans, Peace of Westphalia, peer-to-peer, peer-to-peer lending, Ponzi scheme, post scarcity, post-Fordism, Post-Keynesian economics, postnationalism / post nation state, predatory finance, price mechanism, price stability, quantitative easing, quantitative trading / quantitative finance, remote working, rent-seeking, reserve currency, Richard Thaler, risk free rate, Robert Shiller, Satoshi Nakamoto, scientific management, Scientific racism, seigniorage, Skype, Slavoj Žižek, South Sea Bubble, sovereign wealth fund, special drawing rights, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, Veblen good, Wave and Pay, Westphalian system, WikiLeaks, Wolfgang Streeck, yield curve, zero-coupon bond

These forms include “the apparent authority exercised by global market forces, by private institutions engaged in the setting of international standards, by human rights and environmental non-governmental organizations, by transnational religious movements, and even by mafia and mercenary armies in some instances” (Hall and Bierstecker 2002: 4). Of key relevance to the discussion here is the notion of market authority, which in a monetary context includes banks and financial corporations, sovereign wealth funds, and various nonstate regulatory institutions. Sovereign wealth funds (SWFs) are especially interesting. These are special investment funds whose government-owned assets include international assets (Truman 2010: 10). The IMF lists five basic objectives of SWFs: stabilizing funds to insulate the budget from price swings; building wealth for future generations; managing foreign exchange reserves; building up development funds; and maintaining pension reserve funds (IMF 2008).

Moreover, the state played a crucial role in that history—just as it continues doing so today.27 Third, Marx’s analysis of the role of the “modern bankocracy” opens up an analytical space in which finance can be understood in relation to a particular kind of accumulation, more akin to mercantilism and rent seeking than more conventional forms of capitalist production.28 Financial derivatives did not exist in Marx’s day. Nor did hedge funds or sovereign wealth funds. Nonetheless, his analysis of primitive accumulation provides a powerfully suggestive means of framing these forms of financial capitalism (McNally 2009; Ekman 2012). Although Marx’s arguments soon became outdated empirically, in theoretical terms his analysis of money and finance, and especially the distinction between them, are as resonant today as they ever were.

., Edward Elgar Publishing: 173–222. Ingham, G. (2004b). The Nature of Money, Cambridge, U.K., Polity Press. International Monetary Fund (IMF) (2006). “Global Financial Stability Report: Market Developments and Issues.” Washington, DC, International Monetary Fund. International Monetary Fund (IMF) (2008). Sovereign Wealth Funds—A Work Agenda, IMF Monetary and Capital Markets and Policy Development Review Departments, Washington, DC, International Monetary Fund. Isaac, B. (1993). “Retrospective on the Formalist–Substantivist Debate.” Research in Economic Anthropology, B. Isaac, Ed. Greenwich, CT, JAI Press: 213–33.


pages: 304 words: 80,965

What They Do With Your Money: How the Financial System Fails Us, and How to Fix It by Stephen Davis, Jon Lukomnik, David Pitt-Watson

activist fund / activist shareholder / activist investor, Admiral Zheng, banking crisis, Basel III, Bear Stearns, behavioural economics, Bernie Madoff, Black Swan, buy and hold, Carl Icahn, centralized clearinghouse, clean water, compensation consultant, computerized trading, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, crowdsourcing, David Brooks, Dissolution of the Soviet Union, diversification, diversified portfolio, en.wikipedia.org, financial engineering, financial innovation, financial intermediation, fixed income, Flash crash, Glass-Steagall Act, income inequality, index fund, information asymmetry, invisible hand, John Bogle, Kenneth Arrow, Kickstarter, light touch regulation, London Whale, Long Term Capital Management, moral hazard, Myron Scholes, Northern Rock, passive investing, Paul Volcker talking about ATMs, payment for order flow, performance metric, Ponzi scheme, post-work, principal–agent problem, rent-seeking, Ronald Coase, seminal paper, shareholder value, Silicon Valley, South Sea Bubble, sovereign wealth fund, statistical model, Steve Jobs, the market place, The Wealth of Nations by Adam Smith, transaction costs, Upton Sinclair, value at risk, WikiLeaks

Here are suggestions for how to reverse that trend. Tim MacDonald of the Capital Institute has proposed a different form of ownership for long-term investors. In a back-to-the-future synthesis of modern financial engineering and old-fashioned direct ownership, he would have pension funds, endowments, insurance companies, sovereign wealth funds, and other large long-term investors curtail their public market investments, getting away from what he calls the tyranny of the trading tape. MacDonald’s idea, which he calls “evergreen direct investing,” is that an investor would make a direct investment into a company. Over time, the pension fund’s investment morphs from equity into debt, providing longterm cash flows after the period of high risk and need for growth capital has passed.

After twenty years, a saver contributing every year to a well-governed fund would be about 30 percent better off than someone stuck in one that was poorly governed.5 Indications that accountability improves results are slowly accumulating. The Cooper Review, a 2010 government inquiry in Australia, also projected substantial benefits when funds have better governance.6 Scholars have found similar results in sovereign wealth funds.7 And Morningstar’s test of its own stewardship rankings of more than forty US fund companies found a correlation between the governance of mutual funds and their performance over five years.8 As Oxford University’s Gordon L. Clark brutally puts it in reference to both defined benefit and defined contribution plans: “Poor organizational systems combined with a palpable lack of expertise makes many pension funds a soft target for unscrupulous financial service providers.”9 Why should good governance improve investment returns?

Super System Review Final Report—Part One Overview and Recommendations (Super System Review, June 30, 2010), www.afr.com/rw/2009-2014/AFR/2010/07/05/Photos/0d280174-87d8-11df-bbd0-8f855dd2fda9_SSR%20Final%20Report%20Part%201.pdf, section 6.1. 7. Kathryn L. Dewenter, Xi Han, and Paul H. Malatesta, “Firm Values and Sovereign Wealth Fund Investments,” Journal of Financial Economics 98, no. 2 (November 2010): 256–78. 8. Lauren Pavlenko Lutton, Katie Rushkewicz, Kailin Liu, and Xin Ling, Morningstar 2011 Mutual Fund Stewardship Grade Research Paper (Morningstar Fund Research, March 2011), http://corporate.morningstar.com/us/documents/methodologydocuments/MethodologyPapers/StewardshipGradeMethodology.pdf. 9.


pages: 262 words: 83,548

The End of Growth by Jeff Rubin

Alan Greenspan, Anthropocene, Ayatollah Khomeini, Bakken shale, banking crisis, Bear Stearns, Berlin Wall, British Empire, business cycle, call centre, carbon credits, carbon footprint, carbon tax, collateralized debt obligation, collective bargaining, Credit Default Swap, credit default swaps / collateralized debt obligations, deal flow, decarbonisation, deglobalization, Easter island, energy security, eurozone crisis, Exxon Valdez, Eyjafjallajökull, Fall of the Berlin Wall, fiat currency, flex fuel, Ford Model T, full employment, ghettoisation, Glass-Steagall Act, global supply chain, Hans Island, happiness index / gross national happiness, housing crisis, hydraulic fracturing, illegal immigration, income per capita, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, Jevons paradox, Kickstarter, low interest rates, McMansion, megaproject, Monroe Doctrine, moral hazard, new economy, Occupy movement, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, proprietary trading, quantitative easing, race to the bottom, reserve currency, rolling blackouts, Ronald Reagan, South China Sea, sovereign wealth fund, subprime mortgage crisis, The Chicago School, The Death and Life of Great American Cities, Thomas Malthus, Thorstein Veblen, too big to fail, traumatic brain injury, uranium enrichment, urban planning, urban sprawl, women in the workforce, working poor, Yom Kippur War, zero-sum game

I spent nearly twenty years as chief economist of CIBC World Markets, a major Canadian investment bank with clients and operations around the world. It was certainly a good way to earn a living. Global investors are constantly grappling with changing financial conditions, which puts the services of a chief economist in high demand. One week you’re advising sovereign wealth funds in exotic locales such as Kuwait or Singapore, and the next you’re back in North America telling heavyweight pension funds how economic events will impact stocks, bonds and currencies. On other days, you’re visiting global financial capitals and eating at nice restaurants with powerful portfolio managers and high-ranking government officials.

And if the answer is yes, what will that mean for supply contracts inked by deposed rulers? New regimes born in the aftermath of the Arab Spring may be less inclined to supply oil to customers in Europe or North America. Production contracts could instead be granted to energy-hungry countries such as China and India, both of which have massive sovereign wealth funds looking for opportunities to invest in energy. No matter what form political change may take, the region’s history makes it abundantly clear that, for world energy markets, social upheaval invariably leads to less supply. OPEC CAPACITY IS TAPPED OUT Events taking place above the ground aren’t the only thing you should worry about in the Middle East.

Few countries are in better shape in this regard than Russia, which is using the clout of its massive oil and gas reserves to extend its influence across Europe. The security that comes from a steady stream of petrodollars also allows Venezuela to thumb its nose at the United States and stoke anti-American sentiment across Latin America. The rise of sovereign wealth funds and state-owned oil companies can also be traced to the money that triple-digit oil prices have sent coursing into the global petro-economy. In the coming years, even more of the world’s petroleum supply will be controlled by state-run actors. Companies such as Saudi Aramco, Rosneft, Indian Oil, Sinopec and PetroChina already rank among the heavyweights of the world oil industry.


pages: 327 words: 84,627

The Green New Deal: Why the Fossil Fuel Civilization Will Collapse by 2028, and the Bold Economic Plan to Save Life on Earth by Jeremy Rifkin

"World Economic Forum" Davos, 1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, American Society of Civil Engineers: Report Card, autonomous vehicles, Bernie Sanders, Big Tech, bike sharing, blockchain, book value, borderless world, business cycle, business process, carbon footprint, carbon tax, circular economy, collective bargaining, corporate governance, corporate social responsibility, creative destruction, decarbonisation, digital rights, do well by doing good, electricity market, en.wikipedia.org, energy transition, failed state, general purpose technology, ghettoisation, green new deal, Greta Thunberg, high-speed rail, hydrogen economy, impact investing, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, it's over 9,000, Joseph Schumpeter, means of production, megacity, megaproject, military-industrial complex, Network effects, new economy, off grid, off-the-grid, oil shale / tar sands, peak oil, planetary scale, prudent man rule, remunicipalization, renewable energy credits, rewilding, Ronald Reagan, shareholder value, sharing economy, Sidewalk Labs, Silicon Valley, Skype, smart cities, smart grid, sovereign wealth fund, Steven Levy, subprime mortgage crisis, the built environment, The Wealth of Nations by Adam Smith, Tim Cook: Apple, trade route, union organizing, urban planning, vertical integration, warehouse automation, women in the workforce, zero-sum game

The Irish Parliament passed a bill forcing the Ireland Strategic Investment Fund, which oversees the investment of €8.9 billion ($10.4 billion) of government funds, to divest the estimated €318 million the country is investing in the global fossil fuel industry.44 Just eight months later, in March 2019, Norway sent tremors across the financial community when its government announced a recommendation that its sovereign wealth fund divest from all upstream oil and gas producers. Norway is Western Europe’s biggest producer of petroleum, and its sovereign wealth fund is the largest in the world.45 The message was clear: Norway is beginning to get out! In countries where national governments have either turned a deaf ear or dragged their heels on establishing protocols for divesting from fossil fuels, public employee unions have taken on the mission of unilaterally announcing divestment of their members’ pension funds.

Most of the oil that is left will remain forever in the ground. It’s not just the Emirates at risk. It’s also carbon-rich countries around the world whose economies are so utterly dependent on the extraction, refining, and sale of oil, gas, and coal. To say that the world’s banks, insurance companies, sovereign wealth funds, and private equity funds are worried would be an understatement. In 2018, the World Bank issued a report titled The Changing Wealth of Nations 2018: Building a Sustainable Future, which laid out a somber analysis of what’s in store for carbon-rich nations. The World Bank pointed out that while private-sector investors and companies in the fossil fuel sector can always divest and reinvest in other more profitable and sustainable enterprises, carbon-rich sovereign nations tied to territorial boundaries are far more constrained and far less agile.


pages: 278 words: 82,771

Built on a Lie: The Rise and Fall of Neil Woodford and the Fate of Middle England’s Money by Owen Walker

activist fund / activist shareholder / activist investor, bank run, banking crisis, barriers to entry, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Brexit referendum, British Empire, buy and hold, call centre, carbon footprint, clean water, coronavirus, corporate governance, COVID-19, fixed income, G4S, Kickstarter, knowledge economy, liquidity trap, lockdown, mass affluent, popular capitalism, profit motive, regulatory arbitrage, shareholder value, short selling, Silicon Valley, sovereign wealth fund, stem cell, Steve Jobs, Winter of Discontent

Other key constituents were the wealth managers and other investment groups that offered funds of funds: vehicles whereby they created their own products that invested in a range of underlying funds. One surprising client that was keen to sign up was the Abu Dhabi Investment Authority, one of the world’s biggest sovereign wealth funds. It had first got in touch with Deer a couple of years earlier about investing in Woodford’s Invesco Perpetual funds, but ended up investing £200 million into the new business instead. In most cases, Deer and Dale knew within minutes of arriving that selling the Woodford funds was a foregone conclusion.

The terminal trajectory of Woodford’s business had not gone unnoticed by the clients he depended on most – many of whom were unnerved by the revelations about the desperate measures the stock picker was taking to rebalance his funds. In early March, Woodford and Newman were summoned to the Middle East to meet the managers of the Abu Dhabi Investment Authority, one of the biggest sovereign wealth funds in the world. The ADIA had been an early backer of Woodford’s new business five years earlier, committing £200 million. Woodford ran the money in a vehicle called the West Fund. ADIA was unable to invest in unquoted companies, so the fund was structured in a similar way to the St James’s Place mandate, which mirrored Equity Income but with the unlisted and small companies stripped out.

It was on course to crash out of the FTSE 250 index of mid-size British companies. The spate of write-downs had only made matters worse. Benevolent AI, the fund’s largest holding, was the latest to suffer a horrific devaluation. A year earlier its value was set at £1.5 billion, but when Temasek, the Singaporean sovereign wealth fund, injected more cash into the business, the investment triggered its value to halve. The trust also had a weighty overdraft hanging round its neck. While the amount it owed to Northern Trust was slowly coming down, the trust was restricted to borrowing only 20 per cent of its assets. This meant that every time one of its holdings was devalued – or Woodford committed further cash to companies – more of the overdraft needed to be paid back.


pages: 199 words: 48,162

Capital Allocators: How the World’s Elite Money Managers Lead and Invest by Ted Seides

Albert Einstein, asset allocation, behavioural economics, business cycle, coronavirus, COVID-19, crowdsourcing, data science, deliberate practice, diversification, Everything should be made as simple as possible, fake news, family office, fixed income, high net worth, hindsight bias, impact investing, implied volatility, impulse control, index fund, Kaizen: continuous improvement, Lean Startup, loss aversion, Paradox of Choice, passive investing, Ralph Waldo Emerson, risk tolerance, Sharpe ratio, sovereign wealth fund, tail risk, The Wisdom of Crowds, Toyota Production System, zero-sum game

When overseeing their business, they make choices like those of business executives. When producing their product, they make capital allocation decisions like CIOs, picking investments and constructing portfolios. CIOs sit at the top of the food chain. Endowments and foundations, high net worth individuals, family offices, corporate and public pension funds, and sovereign wealth funds are end owners of capital. CIOs lead their investment operations. End owners of capital frequently staff their investment team with a small number of professionals. The team occasionally invests directly in securities or deals, and more frequently allocates capital to the products run by money managers.

For Chris to hire an investment manager, his team needs to send out the same government-mandated RFP (Request for Proposal) that the public works staff uses to hire a contractor to oversee construction of a highway. Endowments have investment committees that report to the trustees of the academic institution. Its members often are knowledgeable and aligned in purpose. Foundations may have a similar set up. Sovereign wealth funds are government-owned pools created to serve their citizens for the long term. While the long duration of capital and consistency of mission is helpful, the potential issues for geopolitical concern and conflict are not. CIOs and their investment teams do the day-to-day work in setting the agenda and implementing the strategy.


pages: 469 words: 132,438

Taming the Sun: Innovations to Harness Solar Energy and Power the Planet by Varun Sivaram

"World Economic Forum" Davos, accelerated depreciation, addicted to oil, Albert Einstein, An Inconvenient Truth, asset light, asset-backed security, autonomous vehicles, bitcoin, blockchain, carbon footprint, carbon tax, clean tech, collateralized debt obligation, Colonization of Mars, currency risk, decarbonisation, deep learning, demand response, disruptive innovation, distributed generation, diversified portfolio, Donald Trump, electricity market, Elon Musk, energy security, energy transition, financial engineering, financial innovation, fixed income, gigafactory, global supply chain, global village, Google Earth, hive mind, hydrogen economy, index fund, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), Internet of things, low interest rates, M-Pesa, market clearing, market design, Masayoshi Son, mass immigration, megacity, Michael Shellenberger, mobile money, Negawatt, ocean acidification, off grid, off-the-grid, oil shock, peer-to-peer lending, performance metric, renewable energy transition, Richard Feynman, ride hailing / ride sharing, rolling blackouts, Ronald Reagan, Silicon Valley, Silicon Valley startup, smart grid, smart meter, SoftBank, Solyndra, sovereign wealth fund, Ted Nordhaus, Tesla Model S, time value of money, undersea cable, vertical integration, wikimedia commons

The Climate Policy Initiative (CPI) projects, however, that without new sources of capital, India will miss its 2022 funding target by roughly 30 percent.32 The only investors with pockets deep enough to bankroll the next phase of solar’s growth are institutional investors. These investors include pension funds, insurance funds, and sovereign wealth funds, and they collectively manage over $100 trillion.33 For them, the few trillion dollars needed for solar to explode on the world energy scene is small change. The problem is that currently only 1 percent of that gargantuan sum is invested in infrastructure globally, and even less supports low-carbon infrastructure.

And institutional investors often employ too few staff to justify conducting extensive diligence on individual projects, each of which may require only tens of millions of dollars of investment. Despite the challenges, institutional investors are not uninterested in investing in renewable energy. In fact, some are getting creative in finding investment opportunities in the sector. For example, Abu Dhabi’s sovereign wealth fund invested hundreds of millions of dollars in Renew Power, India’s biggest solar company. And investors from the University of California’s endowment to the New Zealand pension fund have pooled resources to invest in clean energy companies around the world.36,37 By and large, though, these promising investments are drops in the bucket—nowhere near the trillions that will be needed to scale up solar.

That’s because the world’s largest investors are hungry for new opportunities to invest in infrastructure—so much so that from 2013 to 2017, the number of institutional investors holding infrastructure assets more than doubled.9 Investors that are even more active, such as private equity funds, are also looking for stable infrastructure investments (witness a $40 billion partnership in 2017 between the Public Investment Fund, a Saudi Arabian sovereign wealth fund, and Blackstone, a private equity investor, that is structured for long-term infrastructure holdings.10) Infrastructure investors seek opportunities to park their capital and harvest reliable income for several years or even decades without having to worry about reinvesting their money in new assets.


pages: 293 words: 88,490

The End of Theory: Financial Crises, the Failure of Economics, and the Sweep of Human Interaction by Richard Bookstaber

asset allocation, bank run, Bear Stearns, behavioural economics, bitcoin, business cycle, butterfly effect, buy and hold, capital asset pricing model, cellular automata, collateralized debt obligation, conceptual framework, constrained optimization, Craig Reynolds: boids flock, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, dark matter, data science, disintermediation, Edward Lorenz: Chaos theory, epigenetics, feminist movement, financial engineering, financial innovation, fixed income, Flash crash, geopolitical risk, Henri Poincaré, impact investing, information asymmetry, invisible hand, Isaac Newton, John Conway, John Meriwether, John von Neumann, Joseph Schumpeter, Long Term Capital Management, margin call, market clearing, market microstructure, money market fund, Paul Samuelson, Pierre-Simon Laplace, Piper Alpha, Ponzi scheme, quantitative trading / quantitative finance, railway mania, Ralph Waldo Emerson, Richard Feynman, risk/return, Robert Solow, Saturday Night Live, self-driving car, seminal paper, sovereign wealth fund, the map is not the territory, The Predators' Ball, the scientific method, Thomas Kuhn: the structure of scientific revolutions, too big to fail, transaction costs, tulip mania, Turing machine, Turing test, yield curve

Large securities lenders often lend securities to the bank/dealer and also reinvest the cash in the form of secured funding that they provide to the bank/dealer.15 Institutional Investors. The institutional investors encompass a wide swath of agents, ranging from asset managers to pension funds, sovereign wealth funds, and insurance companies. As we will see in the next chapter, these agents are critical for providing liquidity to the market. Because of their tendency to become embroiled in forced selling, and thus to have a special role in fostering crises, we have hedge funds as a specific agent type, but hedge funds really are a special class of institutional investor that can borrow money to put on leveraged positions, take on short positions, and enter into illiquid and unusual investment opportunities.16 So they have a lot of freedom, though that freedom can lead to peril.

There are some short-term liquidity suppliers, such as hedge funds and other speculators, though sometimes they end up falling into the liquidity demand group. If the liquidity demand is very high, the deep pockets to take the other side belong to investors who have a longer time frame—the asset managers, pension funds, and sovereign wealth funds. Between the two is the market maker. The market maker is the transaction intermediary, the broker, moving the price based on the liquidity demander’s needs in order to attract the appropriate amount of liquidity supply. Market makers trade with a very short horizon. They don’t want to take on risk; they want to buy in one instant and off-load their position in the next.

A bit strange, isn’t it, considering that asset owners are the source of vast amounts of capital? Everything starts with the asset owners. They include retail investors like you, but on a larger scale they are institutions such as global pension funds with oceans of capital under management. In some countries there is a centralized pension fund, called a sovereign wealth fund, such as Norway’s government pension fund with assets of $850 billion, or the Abu Dhabi Investment Authority with some $800 billion. Such funds are behemoths, but they hold their citizens’ savings; in a financial sense, they are you and me. The hedge funds, money managers, and banks all feed off these asset owners.


pages: 733 words: 179,391

Adaptive Markets: Financial Evolution at the Speed of Thought by Andrew W. Lo

Alan Greenspan, Albert Einstein, Alfred Russel Wallace, algorithmic trading, Andrei Shleifer, Arthur Eddington, Asian financial crisis, asset allocation, asset-backed security, backtesting, bank run, barriers to entry, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, bitcoin, Bob Litterman, Bonfire of the Vanities, bonus culture, break the buck, Brexit referendum, Brownian motion, business cycle, business process, butterfly effect, buy and hold, capital asset pricing model, Captain Sullenberger Hudson, carbon tax, Carmen Reinhart, collapse of Lehman Brothers, collateralized debt obligation, commoditize, computerized trading, confounding variable, corporate governance, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, Daniel Kahneman / Amos Tversky, delayed gratification, democratizing finance, Diane Coyle, diversification, diversified portfolio, do well by doing good, double helix, easy for humans, difficult for computers, equity risk premium, Ernest Rutherford, Eugene Fama: efficient market hypothesis, experimental economics, experimental subject, Fall of the Berlin Wall, financial deregulation, financial engineering, financial innovation, financial intermediation, fixed income, Flash crash, Fractional reserve banking, framing effect, Glass-Steagall Act, global macro, Gordon Gekko, greed is good, Hans Rosling, Henri Poincaré, high net worth, housing crisis, incomplete markets, index fund, information security, interest rate derivative, invention of the telegraph, Isaac Newton, it's over 9,000, James Watt: steam engine, Jeff Hawkins, Jim Simons, job satisfaction, John Bogle, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, language acquisition, London Interbank Offered Rate, Long Term Capital Management, longitudinal study, loss aversion, Louis Pasteur, mandelbrot fractal, margin call, Mark Zuckerberg, market fundamentalism, martingale, megaproject, merger arbitrage, meta-analysis, Milgram experiment, mirror neurons, money market fund, moral hazard, Myron Scholes, Neil Armstrong, Nick Leeson, old-boy network, One Laptop per Child (OLPC), out of africa, p-value, PalmPilot, paper trading, passive investing, Paul Lévy, Paul Samuelson, Paul Volcker talking about ATMs, Phillips curve, Ponzi scheme, predatory finance, prediction markets, price discovery process, profit maximization, profit motive, proprietary trading, public intellectual, quantitative hedge fund, quantitative trading / quantitative finance, RAND corporation, random walk, randomized controlled trial, Renaissance Technologies, Richard Feynman, Richard Feynman: Challenger O-ring, risk tolerance, Robert Shiller, Robert Solow, Sam Peltzman, Savings and loan crisis, seminal paper, Shai Danziger, short selling, sovereign wealth fund, Stanford marshmallow experiment, Stanford prison experiment, statistical arbitrage, Steven Pinker, stochastic process, stocks for the long run, subprime mortgage crisis, survivorship bias, systematic bias, Thales and the olive presses, The Great Moderation, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Thomas Malthus, Thorstein Veblen, Tobin tax, too big to fail, transaction costs, Triangle Shirtwaist Factory, ultimatum game, uptick rule, Upton Sinclair, US Airways Flight 1549, Walter Mischel, Watson beat the top human players on Jeopardy!, WikiLeaks, Yogi Berra, zero-sum game

The California Public Employees’ Retirement System—a single fund that routinely invests in fixed-income securities of all types—manages $305 billion in assets as of August 2016. But there’s no reason to be limited to domestic sources of capital; we could go abroad, since finance and cancer are both international. The Oljefondet, the Norwegian sovereign wealth fund, has a value of $855 billion as of June 2016, and currently holds over 2 percent of all European stocks. Nobody really knows how large China’s sovereign wealth fund is, but it’s estimated to be in the hundreds of billions of dollars as well, and China has a very big stake in developing cancer therapeutics, given the size and age of its population. There’s more than enough investment capital available for a cancer megafund, provided we structure the financing correctly.

During bad times, hedge funds are the “canary in the coal mine”; they’re the first to suffer from any kind of financial dislocation. Watching the hedge fund industry can give us tremendous insight into what’s happening to the market environment. Hedge funds innovate rapidly, and because they tend to be highly leveraged, they have a disproportionate impact on markets. Central banks and sovereign wealth funds, insurance companies, and pension funds invest in hedge funds alongside high net worth individuals. How well these large institutions fare affects the financial lives of the everyday consumer, people who are just a single step away in the financial ecology. You may not be interested in hedge funds, but hedge funds may be interested in you.

Krugman’s response was, “These days, Americans make a living selling each other houses, paid for with money borrowed from the Chinese.”1 We were dramatically successful in bringing into the mortgage market new species of large investors that had never previously participated in these kinds of securities before: pension funds, mutual funds, sovereign wealth funds, endowments, and hedge funds. This didn’t happen by accident. All of this money was channeled through a large number of mortgage brokers who had a financial incentive to originate new mortgages. The tremendous amounts of money pumped into U.S. residential real estate over a relatively short period of time caused a huge boom in the housing industry, which built homes for all the buyers newly qualified for loans.


pages: 391 words: 102,301

Zero-Sum Future: American Power in an Age of Anxiety by Gideon Rachman

"World Economic Forum" Davos, Alan Greenspan, Asian financial crisis, bank run, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Bretton Woods, BRICs, capital controls, carbon tax, centre right, clean water, collapse of Lehman Brothers, colonial rule, currency manipulation / currency intervention, deindustrialization, Deng Xiaoping, Doha Development Round, energy security, failed state, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, Glass-Steagall Act, global reserve currency, Global Witness, Golden arches theory, Great Leap Forward, greed is good, Greenspan put, Hernando de Soto, illegal immigration, income inequality, invisible hand, It's morning again in America, Jeff Bezos, laissez-faire capitalism, Live Aid, low interest rates, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, moral hazard, mutually assured destruction, Naomi Klein, Nelson Mandela, offshore financial centre, Oklahoma City bombing, open borders, open economy, Peace of Westphalia, peak oil, pension reform, plutocrats, popular capitalism, price stability, RAND corporation, reserve currency, rising living standards, road to serfdom, Ronald Reagan, Savings and loan crisis, shareholder value, Sinatra Doctrine, sovereign wealth fund, special economic zone, Steve Jobs, Stewart Brand, Tax Reform Act of 1986, The Chicago School, The Great Moderation, The Myth of the Rational Market, Thomas Malthus, Timothy McVeigh, trickle-down economics, Washington Consensus, Winter of Discontent, zero-sum game

As the political analyst Ian Bremmer noted in 2009, “Governments, not private shareholders, already own the world’s largest oil companies and control three-quarters of the world’s energy reserves.”35 By contrast, privately owned Western “multinationals produce just 10 percent of the world’s oil and hold just three percent of its reserves.”36 Sovereign wealth funds (SWFs), which make strategic investments on behalf of cash-rich governments, are also increasingly big players in the global economy. What the NIC report called “the transfer of wealth and economic power from West to East” means that the biggest SWFs are controlled by oil-rich nations, particularly in the Persian Gulf, and by Asian nations such as China.

But China’s growing importance as a market, customer, and source of cash is already increasing its global influence. The Beijing government’s willingness to extend aid to African nations without imposing the political conditions that Western nations liked to insist on has made China a favored partner for a range of African governments from Zimbabwe to Sudan and Angola. The largest sovereign wealth funds, which mobilize the capital of nations for overseas investment, are almost all controlled by undemocratic countries. (The sole exception is the Norwegian fund.) As a result, an America that is already struggling with the military and financial burdens of global leadership will find itself increasingly checked in global politics, in ways that have become unfamiliar over the past generation.

., 90, 222 Siberia, 240, 274 Sinatra Doctrine, 64–65 Singapore, 60, 137–40, 143, 213 Singh, Manmohan, 15, 54, 79–83, 102–3, 116, 225, 243 Single European Act (1986), 49–51 Smith, Adam, 2, 17, 82, 113, 192 Smoot-Hawley tariffs, 267 socialism, 15–16, 30, 64, 81 British, 35, 36, 38, 49 in France, 46–49 Solana, Javier, 151 Solidarity, 66, 67 Somalia, 132, 209, 210, 256–57, 273 South Africa, 69–70, 176, 193, 244–45, 246, 262 South Korea, 6, 18, 60, 82, 142, 143, 159, 186, 187, 195, 273 sovereign wealth funds (SWFs), 193, 247 Soviet bloc, 6, 102 collapse of, 17, 18, 35–36, 58–59, 63–71, 76, 128 Soviet Union, 7, 34, 41, 87, 88, 167, 183, 233, 279, 285 Brezhnev Doctrine and, 64, 67 China compared with, 59–61 collapse of, 4, 11, 15, 19, 21, 43, 54, 69–70, 84, 85, 88, 90, 93, 100, 102, 105, 164, 261, 282 Fukuyama’s study of, 99–100 Gorbachev’s reforms in, 15, 16, 25, 27, 42, 53–61, 68, 100, 297n Nehru’s visit to, 81 Soviet bloc collapse and, 58–59, 61, 65–66 U.S. competition with, 131, 282, 284, 291 Spain, Spanish, 8, 72, 147, 165, 188, 235, 270 global government and, 219, 221, 226, 228 Spence, Jonathan, 23–24 Sri Lanka, 223, 231, 274 Stalin, Joseph, 27, 236, 237 Starbucks, 155, 261 State Department, U.S., 99, 100, 117, 188 State of Emergency (Buchanan), 260 Steinberg, James, 5, 129 Stiglitz, Joseph, 157, 159, 160, 314n stock market, 83, 218 in Japan, 18–19, 88–89 U.S., 2–3, 4, 40, 96–97, 107, 110, 165 Strauss-Kahn, Dominique, 152, 219 Sudan, 195, 205, 223, 226, 227, 231, 246, 247, 248, 275, 289 Sullivan, Andrew, 280 Summers, Larry, 7, 117–18, 156, 184 Suskind, Ron, 168 Sweden, 150, 156 Switzerland, 96, 101, 269 Taiwan, 60, 82, 136–37, 143, 186, 237, 249 Talbott, Strobe, 126, 217, 304n Taliban, 167, 239, 252 tariffs, 74, 75, 77, 83, 265, 266, 267 taxes, 49, 94, 109, 115, 216, 236, 267 cuts in, 17, 32, 35, 38, 39, 74, 75, 83, 116 Tax Reform Act (1986), 38 Tbilisi, 233, 234 Tea Party movement, 268 technology, 27, 56, 87, 111, 118–28, 131, 174, 203, 271 climate change and, 203, 204, 286–87 global warming and, 125–26 gloomy predictions and, 125, 204, 206 India and, 6, 81, 84–85, 141 peace and, 5–6, 126 U.S., 93, 95, 118–26, 165, 167, 184, 187, 261 see also information technology television, 119, 124, 135, 234–37, 285 Tennyson, Alfred, Lord, 225 Tequila crisis (1994), 77 terror, war on, 96, 165, 198, 199, 211, 212, 244, 245 terrorism, 36, 161–62, 166, 174, 198, 199, 210, 220, 257, 258, 259, 280 nuclear proliferation and, 211–12 in Pakistan, 211, 212, 251, 252, 256, 313n see also 9/11 Tett, Gillian, 123 Texas A&M, 179–81 Thailand, 6, 60, 142, 143, 159–60 Thatcher, Margaret, 16–17, 29–36, 39–52, 54, 69, 74, 89, 114, 136, 191, 279 Falklands War and, 34, 43, 76 France and, 45–46, 48, 49 Hayek and, 118 as “iron lady,” 34, 42, 45 M.


pages: 363 words: 101,082

Earth Wars: The Battle for Global Resources by Geoff Hiscock

Admiral Zheng, Asian financial crisis, Bakken shale, Bernie Madoff, BRICs, butterfly effect, carbon tax, clean tech, clean water, corporate governance, demographic dividend, Deng Xiaoping, Edward Lorenz: Chaos theory, energy security, energy transition, eurozone crisis, Exxon Valdez, flex fuel, Ford Model T, geopolitical risk, global rebalancing, global supply chain, Great Leap Forward, high-speed rail, hydraulic fracturing, Long Term Capital Management, Malacca Straits, Masayoshi Son, Masdar, mass immigration, megacity, megaproject, Menlo Park, Mohammed Bouazizi, new economy, oil shale / tar sands, oil shock, Panamax, Pearl River Delta, purchasing power parity, Ralph Waldo Emerson, RAND corporation, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, smart grid, SoftBank, Solyndra, South China Sea, sovereign wealth fund, special economic zone, spice trade, trade route, uranium enrichment, urban decay, WikiLeaks, working-age population, Yom Kippur War

Outside of the Middle East, some of the biggest Chinese investments have been in Africa in the shape of roads, railways, ports, storage, and other logistics. A fourth Chinese company, Sinochem, paid more than $3 billion to Norway’s Statoil in 2010 for a 40 percent stake in Brazil’s Peregrino oilfield. China’s sovereign wealth fund, the China Investment Corporation (CIC), has bought other big oil and gas assets in Canada, Russia, and Kazakhstan. Pipelines Open New Markets Chinese oil companies also are investing in transnational oil pipelines to bring in supplies from Central Asia, Southeast Asia, and Russia. An example is the 1,830-km Central Asian gas pipeline, which opened in December 2009 and runs from Turkmenistan through Uzbekistan and Kazakhstan to China’s Xinjiang province.

In the Asia Society report, Rosen and Hanemann identified 230 Chinese investments in the United States between 2003 and 2010 worth about $11.7 billion, split between 109 greenfield projects and 121 acquisitions. They included such big-ticket investments as Tianjin Pipe’s 2009 decision to spend $1 billion to build a greenfield steel pipe plant in Corpus Christi, Texas, and the purchase of a 15 percent stake in Virginia power utility AES by sovereign wealth fund China Investment Corporation for $1.58 billion in 2010. Since then, CNOOC has agreed to spend $3.5 billion on U.S. shale assets and Sinopec has signed up for a $2.5 billion investment. Among the world’s other big emerging energy players, Brazil’s Petrobras has made a number of U.S. investments, including a Texas refinery and stakes in several oil fields in the Gulf of Mexico.

Russia’s Gazprom is interested in being involved in future projects after 2014. China and India are substantial buyers of Qatari gas, but as yet, no Chinese or Indian energy companies have taken equity in any of the QatarGas and RasGas projects. India’s ONGC Videsh signed up in 2005 to explore for oil in a Qatari offshore block but relinquished it in 2008. Qatar’s sovereign wealth fund, the Qatar Investment Authority, took a stake in the Industrial and Commercial Bank of China (ICBC) at the time of its initial public share offer in 2006, and ICBC subsequently set up a branch in the Qatari capital Doha. In July 2007, Qatar Petroleum began sending natural gas via a pipeline to the United Arab Emirates and from October 2008 to Oman.


pages: 537 words: 149,628

Ghost Fleet: A Novel of the Next World War by P. W. Singer, August Cole

3D printing, Admiral Zheng, air gap, augmented reality, British Empire, digital map, energy security, Firefox, glass ceiling, global reserve currency, Google Earth, Google Glasses, IFF: identification friend or foe, Just-in-time delivery, low earth orbit, Maui Hawaii, military-industrial complex, MITM: man-in-the-middle, new economy, old-boy network, operational security, RAND corporation, reserve currency, RFID, Silicon Valley, Silicon Valley startup, South China Sea, sovereign wealth fund, space junk, stealth mode startup, three-masted sailing ship, trade route, Virgin Galactic, Wall-E, We are Anonymous. We are Legion, WikiLeaks, zero day, zero-sum game

Also see http://grafiti.mobi/dig-graffiti-applications-and-tools-for-smes-and-users/. 146 first-generation Google Glass: “Google Glass: What It Does,” Google, accessed August 20, 2014, http://www.google.com/glass/start/what-it-does/. 148 passed the SIG Sauer P226 pistol: “Pistols — P226,” SIG Sauer, accessed August 20, 2014, http://www.sigsauer.com/catalogproductlist/pistols-p226.aspx. 151 The Versatrax 300: “Versatrax 300,” Inuktun, accessed July 24, 2014, http://www.inuktun.com/crawler-vehicles/versatrax-300.html. 156 old Defense Production Act: “The Defense Production Act of 1950, As Amended,” Department of Defense, accessed August 20, 2014, http://www.acq.osd.mil/mibp/dpac/final__defense_production_act_091030.pdf. 157 representing a sovereign wealth fund: “Sovereign Wealth Funds — Frequently Asked Questions,” February 27, 2008, European Commission, accessed August 20, 2014, http://europa.eu/rapid/press-release_MEMO-08-126_en.htm?locale=en. 157 stepped out for a coffee break: Kay Mathews, “Photo: Sam Walton’s Office in Walmart Visitor Center, Bentonville, Ark.,” Digital Journal, June 4, 2011, accessed August 20, 2014, http://www.digitaljournal.com/image/88949. 163 graphene was light and strong: “The Story of Graphene,” University of Manchester, accessed August 20, 2014, http://www.graphene.manchester.ac.uk/explore/the-story-of-graphene/. 163 also known as a 3-D printer: Bob Tita, “How 3-D Printing Works,” Wall Street Journal, June 10, 2013, accessed August 20, 2014, http://online.wsj.com/news/articles/SB10001424127887323716304578483062211388072. 164 a manufacturing revolution: “3D printing: Second Industrial Revolution Is Under Way,” New Scientist, accessed August 20, 2014, http://www.newscientist.com/special/3D-printing. 165 just spoken Klingon: Klingon Pocket Dictionary, Klingonska Akademien, accessed August 20, 2014, http://klingonska.org/dict/. 166 “Russian Foundation for Advanced Research Projects”: “Putin Seeks to Create Russian DARPA Equivalent,” Global Security Newswire, June 21, 2012, accessed August 20, 2014, http://www.nti.org/gsn/article/putin-seeks-create-darpa-equivalent/. 167 the electronic ink used: Jason Koebler, “This E-Tattoo Uses Conventional Chips, No Nanotech Required,” Motherboard, April 4, 2014, accessed August 20, 2014, http://motherboard.vice.com/read/this-e-tattoo-uses-conventional-chips-no-nanotech-required. 167 Dmitri Shostakovich’s Fifth Symphony: “Shostakovich’s Symphony No. 5,” Keeping Score, accessed August 20, 2014, http://www.pbs.org/keepingscore/shostakovich-symphony-5.html. 169 Iliahi Elementary School: “About Iliahi,” Iliahi Elementary School, accessed August 20, 2014, https://sites.google.com/a/dragons.k12.hi.us/iliahiel/. 173 community development units: “Provincial Reconstruction Teams (PRTs),” Department of State, accessed August 20, 2014, http://www.state.gov/p/nea/ci/iz/c21830.htm; fictional unit. 174 Directorate Z-8K assault helicopters: “Product Information — Z8 Helicopter,” Changhe Aircraft Industries Group, accessed August 20, 2014, http://www.changhe.com/english/ecpxx/ecpxx.htm. 174 “It was always a risk”: Charles J.

“Legally defined individual?” Tilden retorted. “Mr. Colby, you know that’s bunk and you know that Sam would want to help the country any way he could.” Before he could reply, another voice broke in. A Swiss-German accent. One of the institutional investors, in this case representing a sovereign wealth fund from Qatar that had bought a 17 percent position when the share price collapsed after America lost Hawaii. “Madame, I appreciate this company’s quaint practice of letting anyone speak at these forums, but you simply fail to understand the multinational nature of this enterprise now. The global shareholder base must come first.

The Directorate has rigged our corporate network with enough tripwires and viruses that we might lose control of the company if they don’t like the way I part my hair.” “Then what do we have to lose?” said Lee-Ann. “I’m calling a vote.” There was no loss of life at Lee-Ann’s Revolt, as it would become known nationwide once the viz of the meeting leaked out, but it was nonetheless momentous. The voting bloc of sovereign wealth funds proved unable to stop the small investor pool once it was mobilized. And by the end of the meeting, shareholders were no longer voting about whether to resist U.S. government rationing schemes. Instead, Wal-Mart declared war on the Directorate. The color drained from Colby’s face as he stared out at the thousands of cheering people in the company auditorium.


pages: 202 words: 58,823

Willful: How We Choose What We Do by Richard Robb

activist fund / activist shareholder / activist investor, Alvin Roth, Asian financial crisis, asset-backed security, Bear Stearns, behavioural economics, Bernie Madoff, Brexit referendum, capital asset pricing model, cognitive bias, collapse of Lehman Brothers, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, delayed gratification, diversification, diversified portfolio, effective altruism, endowment effect, Eratosthenes, experimental subject, family office, George Akerlof, index fund, information asymmetry, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, lake wobegon effect, loss aversion, market bubble, market clearing, money market fund, Paradox of Choice, Pareto efficiency, Paul Samuelson, Peter Singer: altruism, Philippa Foot, principal–agent problem, profit maximization, profit motive, Richard Thaler, search costs, Silicon Valley, sovereign wealth fund, survivorship bias, the scientific method, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, trolley problem, ultimatum game

To realize these returns, an investor must act out of character on an informed hunch. For-itself trading falls beyond, and so reveals a limit to, market efficiency. Institutional Investing Let’s start by taking a look at credit markets that are the domain of public and private pension funds, sovereign wealth funds, insurance companies, university endowments, and other institutional investors. How can a hierarchical group undertake a leap that hinges on personal beliefs formed on the front lines? And having taken the leap, how can it hang on through signs of trouble? From a trading standpoint, institutions differ from individuals in two ways: their resources give them access to esoteric and illiquid markets, and they have governance structures that prevent individuals from misusing resources.

., 211–212n12 Rotten Kid Theorem, 108–110, 125 Russell, Bertrand, 62 salience, 29 Sartre, Jean-Paul, 128–129 satisficing, 42–43 Saul of Tarsus, 63 Schopenhauer, Arthur, 5, 161, 209n5 Schwartz, Barry, 172 scientific knowledge, 61 scientific method, 49–50, 53 search costs, 9 Searle, John, 141–142 Securities and Exchange Commission (SEC), 16 selfish altruism, 104, 105–106, 109, 123, 125, 135 Seligman, Martin, 202 Sen, Amartya, 169 Shafir, Eldar, 174 Shane (film), 169 Sharpe, William, 65 short-term trading, 78 Siddhartha Gautama, 63 Simon, Herbert, 42 Singer, Peter, 110 Smith, Adam, 73, 82, 112, 171 Smith, Al, 211–212n12 Smith, Barbara Herrnstein, 47 social cost, 28–29, 133 social norms, 104, 106–108, 123 social relations, 28 rational choice explanations of, 104 Sodom and Gomorrah, 117–118 “soft selling,” 170 sovereign wealth funds, 74 speed limits, 138–140 spite, 126–127 spontaneity, 19–20, 202 altruistic, 28–29, 114–115, 119, 203 in spite, 127 stable preferences, 33, 115, 147, 207, 208 status symbols, 31 staying in the game, 179–181 stock-picking, 64–66 Strangers Drowning (MacFarquhar), 214n6 strategic competition, 125 structured credit, 15, 93 Strulovici, Bruno H., 217n1 Sturges, Preston, 7 subprime mortgages, 96–97 substitution effect, 187 survivor bias, 180 Taylor, Michael, 133 terrorism, 126 Thaler, Richard, 33–34 Thanet Offshore Wind, 83–90 Thus Spoke Zarathustra (Nietzsche), 43 tit-for-tat, in repeated games, 105 transaction costs, 64, 70, 78 transitivity of preferences, 158–159 Treatise of Human Nature (Hume), 209n5 “tricky profit,” 18–21 trolley problem, 133, 135–137 tulipmania, 212n1 Tversky, Amos, 168, 174 Twain, Mark, 60 ultimatum game, 107–108, 207 uncertainty, about future, 25, 153, 181–185 unique events, 70–71, 72–73, 74, 94 United Kingdom, 181 Energy Ministry of, 88 unemployment, 186 unemployment benefits, 188 university endowments, 74 University of Chicago, 8–9 unobserved care, 108, 112–113, 124, 125–126 utilitarianism, 135–136, 197–198 utility, 5–6, 18, 153–154, 196 vaccination, 58–59 values, 190–191 Van Gogh, Vincent, 79 Veblen, Thorstein, 167 veil of ignorance, 136 vengeance, 125, 126 venture capital, 27, 91–92, 100 Vestas Wind Systems, 84–88 video games, 180 Viner, Jacob, 219n2 Vogt, John, 117 wages, 154, 186, 187–188 waiting in line, 179 walk-a-thons, 178 “warm glow effect,” 114 wealth effect, 187 Wellington (Arthur Wellesley), Duke of, 71 Whitman, Walt, 50 The Will to Power (Nietzsche), 209n5 Williams, Bernard, 7 wind energy, 82–90 work-sports, 191–192 The World as Will and Idea (Schopenhauer), 209n5 Yavapai Indians, 133 Zarnowski, Frank, 191 Zeckhauser, Richard, 70–72 zero risk bias, 24


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Don't Be Evil: How Big Tech Betrayed Its Founding Principles--And All of US by Rana Foroohar

"Susan Fowler" uber, "World Economic Forum" Davos, accounting loophole / creative accounting, Airbnb, Alan Greenspan, algorithmic bias, algorithmic management, AltaVista, Andy Rubin, autonomous vehicles, banking crisis, barriers to entry, behavioural economics, Bernie Madoff, Bernie Sanders, Big Tech, bitcoin, Black Lives Matter, book scanning, Brewster Kahle, Burning Man, call centre, Cambridge Analytica, cashless society, clean tech, cloud computing, cognitive dissonance, Colonization of Mars, computer age, corporate governance, creative destruction, Credit Default Swap, cryptocurrency, data is the new oil, data science, deal flow, death of newspapers, decentralized internet, Deng Xiaoping, digital divide, digital rights, disinformation, disintermediation, don't be evil, Donald Trump, drone strike, Edward Snowden, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Etonian, Evgeny Morozov, fake news, Filter Bubble, financial engineering, future of work, Future Shock, game design, gig economy, global supply chain, Gordon Gekko, Great Leap Forward, greed is good, income inequality, independent contractor, informal economy, information asymmetry, intangible asset, Internet Archive, Internet of things, invisible hand, Jaron Lanier, Jeff Bezos, job automation, job satisfaction, junk bonds, Kenneth Rogoff, life extension, light touch regulation, low interest rates, Lyft, Mark Zuckerberg, Marshall McLuhan, Martin Wolf, Menlo Park, military-industrial complex, move fast and break things, Network effects, new economy, offshore financial centre, PageRank, patent troll, Paul Volcker talking about ATMs, paypal mafia, Peter Thiel, pets.com, price discrimination, profit maximization, race to the bottom, recommendation engine, ride hailing / ride sharing, Robert Bork, Sand Hill Road, search engine result page, self-driving car, shareholder value, sharing economy, Sheryl Sandberg, Shoshana Zuboff, side hustle, Sidewalk Labs, Silicon Valley, Silicon Valley startup, smart cities, Snapchat, SoftBank, South China Sea, sovereign wealth fund, Steve Bannon, Steve Jobs, Steven Levy, stock buybacks, subscription business, supply-chain management, surveillance capitalism, TaskRabbit, tech billionaire, tech worker, TED Talk, Telecommunications Act of 1996, The Chicago School, the long tail, the new new thing, Tim Cook: Apple, too big to fail, Travis Kalanick, trickle-down economics, Uber and Lyft, Uber for X, uber lyft, Upton Sinclair, warehouse robotics, WeWork, WikiLeaks, zero-sum game

In a classic case of what’s been dubbed “the foie gras effect,” the company burned through so much money and reached such sky-high valuations that it became, perhaps like one of its users, too rich and fat for its own good. Jawbone had to turn to the Kuwait Investment Authority for cash just to stay afloat, never a good sign, given that sovereign wealth funds are not exactly the smart money in Silicon Valley.20 They tend to come in big but late, offering loads of cash when others will not, or when start-ups want to inflate their valuations prior to an IPO. Indeed, many of the Big Tech platform firms that took money from the Middle East have come to regret it.

Meanwhile, a 50 percent levy on digital revenue could likewise plug the majority of an American infrastructure spending gap estimated to be $135 billion by 2022.6 That seems more than a fair exchange for allowing the data collectors free access to the country’s most valuable resource. If data is a resource, then perhaps we need a sovereign wealth fund for it. Taxing data extractors cannot, however, be a get-out-of-jail-free card that allows them to run roughshod over individual privacy or civil liberty. For users of platform technology, transparency could be increased with “opt-in” provisions that allow them more control over how their data is used (as is the case with the EU’s General Data Protection Regulation, and the even tougher proposals in California).

Corporations also contributed spare workers to public schemes that benefited the larger economy. In the United States, Cornell law professor Saule Omarova and colleague Robert Hockett have proposed a new National Investment Authority—a hybrid of the New Deal–era Reconstruction Finance Corporation, a modern sovereign wealth fund, and a private equity firm—that would develop and implement a national strategy to remake the real economy for the digital age. “The proposal is framed in terms of financing public infrastructure, but it is much broader and more ambitious than simply new roads,” says Omarova. “We envision it along the lines of the latter-day New Deal approach to financing transformative, large-scale, publicly beneficial projects that would create sustainable jobs and help the country regain its competitive edge—but without exacerbating inequality and excesses of private power.


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How to Talk to a Science Denier: Conversations With Flat Earthers, Climate Deniers, and Others Who Defy Reason by Lee McIntyre

2021 United States Capitol attack, Affordable Care Act / Obamacare, Alfred Russel Wallace, An Inconvenient Truth, Boris Johnson, carbon credits, carbon tax, Climategate, cognitive bias, cognitive dissonance, coronavirus, correlation does not imply causation, COVID-19, crisis actor, different worldview, disinformation, Donald Trump, Dunning–Kruger effect, en.wikipedia.org, Eratosthenes, experimental subject, fake news, false flag, green new deal, Higgs boson, Intergovernmental Panel on Climate Change (IPCC), lockdown, Mark Zuckerberg, Michael Shellenberger, obamacare, off-the-grid, Paris climate accords, post-truth, precautionary principle, Recombinant DNA, Richard Feynman, scientific mainstream, selection bias, social distancing, sovereign wealth fund, stem cell, Steven Levy, the scientific method, University of East Anglia, Upton Sinclair, Virgin Galactic, WikiLeaks

Even though Nasheed was ousted in a coup in 2012, one of his main strategies to address climate change has survived, as the Maldives has embarked on a plan to save for its future. Skeptical that the world’s other nations will do enough to rescue them, the Maldivian government is putting aside a significant portion of its annual $2 billion tourist revenue into a sovereign wealth fund to buy a new home somewhere in the world, against the day when the entire nation will have to relocate.68 We left Boston at eleven p.m. for the overnight flight to Dubai, where we had a seven-hour layover before the next flight to Malé, capital of the Maldives. Malé is one of the densest cities in the world, with nearly a quarter million people crammed into just over two square miles.

The huge sand piles at water’s edge made me think of the history of the Back Bay in Boston (near where I live) and other land-reclamation efforts. But will this one last? Hulhumalé is a stopgap, built for the temporary relief of those who will be displaced from lower-lying islands due to climate change in the coming years. It is an insurance policy. But will it be enough? The funneling of so many tourist dollars to the sovereign wealth fund suggests not, as someday even Hulhumalé will likely be overtaken by water. At that point, the residents will have to escape to Sri Lanka, India, Australia, China, or the United States as climate refugees, unless they are able to find a nation that will sell them enough land to reconstitute the Maldives elsewhere.

Now, I will not lie to you: Hadahaa is a wonderful resort. It is one of those islands that are owned and operated by a hotel, where a visitor is treated to first-class service and some of the most beautiful sights you will ever see in your life. We were among those couples paying a shocking amount toward taxes for the sovereign wealth fund—and we also offset the entirety of our trip with carbon credits when we got back—so all of the money went to a good environmental cause. But I was there to work. My goal was to understand not just the physical but also the cultural effects of climate change, so I needed to be there firsthand.


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Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa by Dambisa Moyo

affirmative action, Asian financial crisis, belling the cat, Bob Geldof, Bretton Woods, business cycle, buy and hold, colonial rule, correlation does not imply causation, credit crunch, diversification, diversified portfolio, en.wikipedia.org, European colonialism, failed state, financial engineering, financial innovation, financial intermediation, Hernando de Soto, income inequality, information asymmetry, invisible hand, Live Aid, low interest rates, M-Pesa, market fundamentalism, Mexican peso crisis / tequila crisis, microcredit, moral hazard, Multics, Ponzi scheme, rent-seeking, risk free rate, Ronald Reagan, seminal paper, sovereign wealth fund, The Chicago School, trade liberalization, transaction costs, trickle-down economics, Washington Consensus, Yom Kippur War

Recently, the Russian gas giant Gazprom offered to invest up to US$2.5 billion to develop Nigeria’s natural-gas reserves, and in May 2008 Japan hosted the Fourth Tokyo International Conference on African Development, where forty-five African leaders and ministers were wooed, with much the same elixir – trade, aid, debt relief and infrastructure.12 Also in May 2008, Turkey signed mutual trade agreements with thirty-five African countries (including Burkina Faso, Cameroon, Ethiopia, Ghana, Kenya, Liberia, Nigeria, Senegal, South Africa and Tanzania), offering to trade under tax incentives and with government support.13 More generally, the World Bank’s President, Robert Zoellick, has urged Sovereign Wealth Funds (whose assets are estimated to be at least US$3 trillion) to invest 1 per cent of their proceeds in equity investment in Africa. Many of them have already done so. The pattern is clear. From whatever perspective, it’s a win-win proposition. For Africa’s investors they have money to put to work (China’s reserves topped US$1 trillion in 2007), and they have economic growth they need to sustain.

D. 46 Heavily Indebted Poorest Country debt relief programme (HIPC) 53 HIV–AIDS pandemic 4–5, 7, 71–2 Hu Jintao 104, 108 Human Development Report (1994) 52 Hungary 85–6 IMF (International Monetary Fund) aid warning 47 appointment of Irwin Blumenthal 53 debt crisis 18–19 and foreign capital 63 inception 11–13 and Malawi 55–6 and ‘nit-picking’ 108–9 Structural Adjustment Facilities 21 In Search of Prosperity (Rodrik) 34 India 112, 117, 123, 132, 134, 137–8 India–Africa Forum 112, 123 Indonesia 34, 56 Industrial and Commercial Bank (China) 106 inflation 61–5 innovation 139–40 International Bank for Reconstruction and Development see World Bank International Development Association (IDA) 37–8 International Development and Food Assistance Act (US 1975) 16 International Peace Research Institute (Stockholm) 59 International Remittance Network 136 International Trade Organization 11 investment bonds 77–83, 87–96 borrowing costs 84–5 credit ratings 78, 83, 87–8 emerging markets 79–81, 85 portfolio diversification 80–82 Ireland 37, 125 Israel 134 Italy 125 Ivory Coast 109–10 Jamaica 136 Japan 99, 102–3, 112, 125 Johannesburg Stock Exchange 4 John Paul II, Pope 26 joint liability 129 Jubilee Debt Campaign 26 Kagame, President Paul 27–8, 148–9 Kanbur, Ravi 54 Kariba dam 15 Kenya and EBA 118 and exports 62 favourable view of China 109 fragile democracy 72 HIV prevalence rates 3 and long-term debt 87–8 money transfer systems 136 population 124 and rampant corruption 48 stake in the economy 152 trade-oriented commodity-driven economy 146 turbulent elections 2008 33 Keynes, John Maynard 11 Kibaki, Mwai 33 Kiva 130 Kurtzman, Joel 51 Lambsdorff, Graf 51 Landes, David 33–4, 147 least-developed countries (LDC) 123 Lensink, R. 136 Lesotho 118 life expectancy 5 Lin Yifu, Justin 153 Live Aid 26 Lumumba, Patrice 14 Lundin, Lukas 98 M-Pesa (money transfer system) 136 Mahajan, Vijay 132 McLiesh, Caralee 101 McNamara, Robert 16, 17 maize scandal (Malawi) 56 Malawi 55–6, 106, 117, 145 Mali 71–2, 94, 109–10, 116 Maren, Michael 60 Markit (data/index firm) 91 Marshall, George C. 12 Marshall Plan 12–13, 35–8 Mauritania 120 Mauritius 34, 89 Maystadt, Philippe 107 Mengistu Haile Mariam 14, 23 Mexico 18, 82, 84, 117, 132, 144, 151 micro-finance 126–32, 140 middle class 57–8 Millennium Challenge Corporation aid campaign (US) 40, 56 Millennium Development Goals (MDG) 45, 96–7 Mkapa, President Benjamin 26 Mobutu Sese Seko, President 14, 22–3, 48, 53, 108 Monterrey Consensus 2002 74 Moody’s Investors Service 83 morality 150 ‘More Aid for the Poorest’ (UK white paper) 16 mosquito net producer (example) 44–5, 114, 122, 130–31 Mozambique 117, 134 Mugabe, Grace 146 Mugabe, Robert 108, 146–7 Mwanawasa, President Levy 53 Mystery of Capital, The (de Soto) 137–8 Na’m, Moisés 107 Namibia 89, 93 ‘negative corruption’ 57; see also corruption Netherlands 63 New York City 151; see also United States New Zealand 121 Nicaragua 151 Nigeria and AGOA duty-free benefits 118 aid from World Bank 107–8 assets looted 48 banking sector 4 beneficiary of FDI 105 and the bond index 92 and corruption 23 cotton revenues 116 favourable view of China 109 humanitarian catastrophe 26 independence 71 and long-term credit ratings 88 Maiduguri money find 137 many tribes 32 natural-gas reserves development 112 rebuilding colonial-era railway 106 remittances 133 ‘No Donor Money, No Loans’ policy 128 North, Douglass 41 Norway 73 ODA (official aid) 25 Odinga, Raila 33 oil 17–18, 48–9, 82, 105–6, 108–9, 120 oil crisis 1979 17–18 Olson, Mancur 41 Olympics 2008 108 Organization of Economic Cooperation and Development (OECD) 115 Oxfam 117 Pakistan 34, 124 Pan-African Infrastructure Development Fund (PAIDF) 95 Paris Club of creditors 108 PEPFAR (AIDS Relief) 7 Peru 151 Peters Projection Map 121 Pew Report 2007 109 Philippines, the 135 PIMCO (bond investment organization) 91 Poland 8–6 Ponzi schemes 130 ‘positive’ corruption 56, 59; see also corruption Private Equity investments 4–5 programme aid 21 Protestantism 31 Przeworski, Adam 43 Raiffeisen, Friedrich 131 Rajan, Raghuram G. 142 Ramalho, Rita 101 Ramesh, Jairam 123 Reagan, Ronald 20, 22 Reichel, R. 46 remittances 133–6 Resource Flows to Africa (UN) 133 Revolutionary United Front (Sierra Leone) 59 Rodrik, Dani 34 Rosenstein-Rodan, Paul 39 Ruiz-Arranz, Marta 136 Russia 84, 87, 112 Rwanda 27, 32, 148 Sachs, Jeffrey 96–7 Sani Abacha, President 48 São Tomé and Principe 106 savings 137–40 Schulze-Delitzsch, Herman 131 Scottish Banks 139–40 Second Conference of Chinese and African Entrepreneurs 114 securitization 96 Sen, Amartya 42 Senegal 109–10 Short, Clare 56 Sierra Leone 59 Singapore 152 Singh, Manmohan 123 small/medium enterprises (SMEs) 125 social capital 58–9 Somalia 60, 118, 133 South Africa abandoning foreign aid 144 and AGOA duty-free benefits 118 and bond issues 89, 92–3 and credit league tables 82 1997 stock market fall 84 not reliant on aid 150 and PAIDF 95 remittances 133 setting an example 78 South Korea 45, 82, 87 Sovereign Wealth Funds 112 Spain 86 Spatafora, N. 133 stabilization programme 20 Standard & Poor’s rating agency 83, 87–8 Standard Bank 106 sterilization 64–5 stock market liquidity 4 Structural Adjustment Facilities 20–21 Subramanian, Arvind 142 subsidies 115–16 Sudan 105–6, 108, 120 sugar production 116–17 Svensson, J. 39, 52 Swaziland 5, 106 Sweden 73 Tanzam Railway 103–4 Tanzania 26, 56, 97, 103–4, 110, 124, 131 taxation 52, 66 Thailand 57 Thatcher, Margaret 20, 67 Togo 94, 116 Tokyo International Conference on African Development 112 Toxopeus, H. 136 trade 17, 19–21, 38–40, 62, 64, 112, 114, 117–24 Transparency International 51, 56, 71 Turkey 93, 112, 117 Uganda aid-fuelled corruption 53 and bonds 65, 97 favourable view of China 109 and HIV–AIDS 71 improved economic growth 101 plunderers and despots 108 population 124 remittances 134 trade-oriented commodity-driven economy 146 UN Conference on Trade and Development (UNCTAD) 102 United Kingdom 108, 120 United Nations Development Programme (UNDP) 25 United Nations Human Development Report 5 United States and African Growth and Opportunity Act 118 aid history 12–17, 40 bond comparisons 80 diplomatic ties with Zimbabwe 108 Energy Information Administration 103 Food For Peace budget 45 freer trade access for African countries 149 influence compared to China 109–10 and Malawi 56 public’s desire on aid 74 Soft Banks 139 and subsidies 115–16 trading partner status 119 2006 foreign aid 99–100 US Farm Security and Rural Investment Act 2005 115 USSR 14, 19, 24 Venezuela 86 venture capital (VC) 139 Wade, President Abdoulaye 149 Washington Consensus 21–2 Wealth and Poverty of Nations, The (Landes) 33–4, 147 Weber, Max 31 Weder, Beatrice 52 Wen Jibao 104, 114 West African Economic and Monetary Union 88 What makes Democracies endure?


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Sabotage: The Financial System's Nasty Business by Anastasia Nesvetailova, Ronen Palan

Alan Greenspan, algorithmic trading, bank run, banking crisis, barriers to entry, Basel III, Bear Stearns, Bernie Sanders, big-box store, bitcoin, Black-Scholes formula, blockchain, Blythe Masters, bonus culture, Bretton Woods, business process, collateralized debt obligation, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, critique of consumerism, cryptocurrency, currency risk, democratizing finance, digital capitalism, distributed ledger, diversification, Double Irish / Dutch Sandwich, en.wikipedia.org, Eugene Fama: efficient market hypothesis, financial engineering, financial innovation, financial intermediation, financial repression, fixed income, gig economy, Glass-Steagall Act, global macro, Gordon Gekko, high net worth, Hyman Minsky, independent contractor, information asymmetry, initial coin offering, interest rate derivative, interest rate swap, Joseph Schumpeter, junk bonds, Kenneth Arrow, litecoin, London Interbank Offered Rate, London Whale, Long Term Capital Management, margin call, market fundamentalism, Michael Milken, mortgage debt, new economy, Northern Rock, offshore financial centre, Paul Samuelson, peer-to-peer lending, plutocrats, Ponzi scheme, Post-Keynesian economics, price mechanism, regulatory arbitrage, rent-seeking, reserve currency, Ross Ulbricht, shareholder value, short selling, smart contracts, sovereign wealth fund, Thorstein Veblen, too big to fail

SEC: Securities and Exchange Commission (USA). TBTF: Too big to fail. INTRODUCTION EVERYONE WANTS TO BE LIKE GOLDMAN In June 2016, in the wake of the fallen Gaddafi regime, the Libyan authorities sued Goldman Sachs for nine trades the bank advised on and then executed for the Libyan sovereign wealth fund between January and April 2008. The new Libyan government claimed that Goldman Sachs gained more than $200m in profits from the trade, whereas the Libyans lost almost all their investment. It would transpire during court proceedings that Goldman paid for prostitutes, private jets and five-star hotels to win the business from a Libyan investment fund.

., Civilization and Capitalism, 15th–18th Century, vol. 3: Perspective of the World, University of California Press, Berkeley, 1992. Braudel, F., Civilization & Capitalism 15th–18th Century, vol. 2: The Wheels of Commerce, new edn, Weidenfeld and Nicolson, 2002. Bray, C., ‘Goldman Sachs didn’t trick Libyan fund’, The New York Times, 14 October 2016, www.nytimes.com/2016/10/15/business/dealbook/goldman-sachs-libya-sovereign-wealth-fund.html. Brewer, E., and J. Jagtiani, ‘How Much Did Banks Pay to Become Too-Big-To-Fail and to Become Systemically Important?’ Journal of Financial Services Research, vol. 43, 2013, pp. 1–35, https://doi.org/10.1007/s10693-011-0119-6. Bristow, T., ‘Four hotels, an £8m firm, all gone – one Norfolk hotelier’s battle with RBS’, Eastern Daily Press, 21 March 2018, www.edp24.co.uk/business/hotelier-david-easter-rbs-grg-turnaround-norfolk-1-5443669.


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The Currency Cold War: Cash and Cryptography, Hash Rates and Hegemony by David G. W. Birch

"World Economic Forum" Davos, Alan Greenspan, algorithmic management, AlphaGo, bank run, Big Tech, bitcoin, blockchain, Bretton Woods, BRICs, British Empire, business cycle, capital controls, cashless society, central bank independence, COVID-19, cross-border payments, cryptocurrency, Diane Coyle, disintermediation, distributed ledger, Donald Trump, driverless car, Elon Musk, Ethereum, ethereum blockchain, facts on the ground, fault tolerance, fiat currency, financial exclusion, financial innovation, financial intermediation, floating exchange rates, forward guidance, Fractional reserve banking, global reserve currency, global supply chain, global village, Hyman Minsky, information security, initial coin offering, Internet of things, Jaron Lanier, Kenneth Rogoff, knowledge economy, M-Pesa, Mark Zuckerberg, market clearing, market design, Marshall McLuhan, mobile money, Money creation, money: store of value / unit of account / medium of exchange, moral hazard, Network effects, new economy, Northern Rock, one-China policy, Overton Window, PalmPilot, pattern recognition, Pingit, QR code, quantum cryptography, race to the bottom, railway mania, ransomware, Real Time Gross Settlement, reserve currency, Satoshi Nakamoto, seigniorage, Silicon Valley, smart contracts, social distancing, sovereign wealth fund, special drawing rights, subscription business, the payments system, too big to fail, transaction costs, Vitalik Buterin, Washington Consensus

While it would still depend on fiat currencies to keep it stable, as Coppola highlights, this does not mean central banks could control it, because buying and selling assets to keep Libra’s value stable would be at a scale to move markets. This could influence government policy, as attempts to control Libra might result in the reserve dumping a currency. After all, Singapore’s sovereign wealth fund (the money sitting behind the Singapore dollar) is less than half a trillion dollars. Alipay (which may itself become one of a handful of global trillion dollar companies) and Tencent are sitting on 150 billion dollars to service a billion people; Libra is targeting more than twice that many.

This is not the only possible course for a currency war (Rickards 2012). There are far more insidious scenarios in which currencies are used as weapons – and not in a metaphorical sense – to cause economic harm to others. These attacks involve not only states and central banks, but also terrorists, criminals and investment banks using sovereign wealth funds, cyberattacks, sabotage and covert actions of a kind not discussed around the Davos dinner tables. States, of course, play a key role. Former IMF chief economist Kenneth Rogoff has said that the competition to (at the very least) reduce the influence of the dollar as Prime currency will come from state-sponsored assets.


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The Billionaire's Apprentice: The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund by Anita Raghavan

"World Economic Forum" Davos, airport security, Asian financial crisis, asset allocation, Bear Stearns, Bernie Madoff, Boeing 747, British Empire, business intelligence, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, delayed gratification, estate planning, Etonian, glass ceiling, high net worth, junk bonds, kremlinology, Larry Ellison, locking in a profit, Long Term Capital Management, Marc Andreessen, mass immigration, McMansion, medical residency, Menlo Park, new economy, old-boy network, Ponzi scheme, risk tolerance, rolodex, Ronald Reagan, short selling, Silicon Valley, sovereign wealth fund, stem cell, technology bubble, too big to fail

What most investors didn’t know was that behind closed doors the company was quietly hatching an innovative plan that would enable it to build the chip factories without a big cash outlay. Instead of footing the bill all on its own, AMD looked to find a deep-pocketed investor—perhaps a cash-rich sovereign wealth fund—that could bankroll the plants. The supersecret initiative was code-named Asset-Lite. The moniker reflected the notion that once the deal was done, AMD would own fewer factories, or assets, because the facilities would be spun off. Kumar began briefing Rajaratnam regularly on the Asset-Lite strategy.

In September, she and her mother were invited to the clambake at Rajaratnam’s Greenwich estate, where Kenny Rogers sang his hit “The Gambler” (“You got to know when to hold ’em, know when to fold ’em, know when to walk away and know when to run”). It was a favorite of Rajaratnam’s and he had Rogers sing it over and over again. Rajaratnam believed that through Ruiz, Chiesi came to learn of AMD’s bid to spin off its facility to make computer chips and create a joint venture that would be 50 percent owned by a Middle Eastern sovereign wealth fund. “Your value to me is a little bit diminished,” he told Kumar. Then he pressed Kumar to see Ruiz and tell him to stop the purported pillow talk. Lest Kumar be confused into thinking that Raj was trying to save Ruiz’s marriage, he made it clear to Kumar that his issue was that Chiesi was freely sprinkling Ruiz’s secrets to everyone who would listen on Wall Street.

There was always a risk that as markets turned south, skittish investors would start to pull money out of Galleon and move it into safer investments. In February, Rajaratnam hired Ayad Alhadi, a seasoned marketer whom he hoped would help Galleon unlock the millions of dollars sitting in the Middle East among the sovereign wealth funds of the region’s oil-rich countries. He was also in talks with Rajat Gupta to head Galleon International, a Pan-Asian emerging markets hedge fund, and help Galleon tap into new investors. Gupta was one of the few players in the corporate world who could be described as truly global. He was connected in India in a way that Rajaratnam, an outsider, a Sri Lankan Tamil, could never be, despite all the billions to his name.


pages: 411 words: 114,717

Breakout Nations: In Pursuit of the Next Economic Miracles by Ruchir Sharma

"World Economic Forum" Davos, 3D printing, affirmative action, Alan Greenspan, Albert Einstein, American energy revolution, anti-communist, Asian financial crisis, banking crisis, Berlin Wall, book value, BRICs, British Empire, business climate, business cycle, business process, business process outsourcing, call centre, capital controls, Carmen Reinhart, central bank independence, centre right, cloud computing, collective bargaining, colonial rule, commodity super cycle, corporate governance, creative destruction, crony capitalism, deindustrialization, demographic dividend, Deng Xiaoping, eurozone crisis, financial engineering, Gini coefficient, global macro, global supply chain, Goodhart's law, high-speed rail, housing crisis, income inequality, indoor plumbing, inflation targeting, informal economy, junk bonds, Kenneth Rogoff, knowledge economy, labor-force participation, land reform, low interest rates, M-Pesa, Mahatma Gandhi, Marc Andreessen, market bubble, Masayoshi Son, mass immigration, megacity, Mexican peso crisis / tequila crisis, middle-income trap, Nelson Mandela, new economy, no-fly zone, oil shale / tar sands, oil shock, open economy, Peter Thiel, planetary scale, public intellectual, quantitative easing, reserve currency, Robert Gordon, rolling blackouts, Shenzhen was a fishing village, Silicon Valley, software is eating the world, sovereign wealth fund, The Great Moderation, Thomas L Friedman, trade liberalization, Tyler Cowen, Watson beat the top human players on Jeopardy!, working-age population, zero-sum game

The first rule for a successful oil-rich state is “Thou shalt not steal.” Over the past decade an estimated $400 billion in profits from Nigerian oil has simply disappeared into the pockets of politicians and businessmen, a huge loss in a nation with an annual GDP of $250 billion. To stem the flow Jonathan has created a sovereign-wealth fund that operates according to the Santiago Principles, an international standard designed to ensure that these increasingly popular investment vehicles are professionally managed and do not become political and personal slush funds for those in power. That may not guarantee that oil money does not end up in the wrong pockets, but it reflects honest intentions.

When oil prices collapsed in the 1980s, the ensuing financial crises forced many Gulf nations to get a grip on spending. By the middle of the last decade, 70 percent of the oil revenue was going into savings, or to pay down debt, and today financial management remains top notch. Virtually every state in the Gulf has adopted the model established by Norway, which has a hugely successful sovereign-wealth fund to reinvest its oil profits. While some researchers have suggested these funds were a kind of fad in the Gulf, an attempt to look at least as modern as the neighbors, they continue to achieve their basic purpose: to manage money strategically and honestly in the long-term interest of the state.

What’s less well known is that most of these countries are essentially run by consultants: in the typical oil company the board of directors and the CEO will be drawn from the royal family, but the president and everyone below him will be British, Indian, or Lebanese. Essentially the system is employing foreign talent to generate a trust fund for the locals as oil and petrochemical companies in the region churn out profits—which have contributed to an estimated $2 trillion in reserves—much of it now held in sovereign-wealth funds. These funds, in turn, invest outside the Gulf for the same reasons foreign investors avoid the Gulf: murky rules, opaque books, too few world-class companies. Local individual investors, however, are another story. This population holds enough wealth to create major bubbles in the Gulf stock markets.


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The Establishment: And How They Get Away With It by Owen Jones

anti-communist, Asian financial crisis, autism spectrum disorder, bank run, battle of ideas, Big bang: deregulation of the City of London, bonus culture, Boris Johnson, Bretton Woods, British Empire, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, centre right, citizen journalism, collapse of Lehman Brothers, collective bargaining, disinformation, don't be evil, Edward Snowden, Etonian, eurozone crisis, falling living standards, Francis Fukuyama: the end of history, full employment, G4S, glass ceiling, hiring and firing, housing crisis, inflation targeting, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, James Dyson, Jon Ronson, laissez-faire capitalism, land bank, light touch regulation, low interest rates, market fundamentalism, mass immigration, Monroe Doctrine, Mont Pelerin Society, moral hazard, Neil Kinnock, night-watchman state, Nixon triggered the end of the Bretton Woods system, Northern Rock, Occupy movement, offshore financial centre, old-boy network, open borders, Overton Window, plutocrats, popular capitalism, post-war consensus, profit motive, quantitative easing, race to the bottom, rent control, road to serfdom, Ronald Reagan, shareholder value, short selling, sovereign wealth fund, stakhanovite, statistical model, subprime mortgage crisis, Suez crisis 1956, The Wealth of Nations by Adam Smith, transfer pricing, Tyler Cowen, union organizing, unpaid internship, Washington Consensus, We are all Keynesians now, wealth creators, Winter of Discontent

As vice-chairman and non-executive director of Sunderland Association Football Club, he made £75,000 for twelve to fifteen days’ work a year. He was also paid handsomely for speeches to law firms and tax specialists: Cameron McKenna LLP handed over £14,000 for an evening talk, while Global Arc, a network of pension funds, sovereign wealth funds and asset managers, paid him the same sum for a single speech. Oxford Analytica, which boasted of advising ‘corporate and government executives’, paid him £18,000 for two days’ work; VantagePoint, a self-described ‘leading investor in energy innovation and efficiency’, paid him nearly £100,000 for four days’ work.

Before the Egyptian Revolution in early 2011, Mandelson had approached Hosni Mubarak’s government to offer his services. He also became close to the dictatorship of Kazakhstan, condemned by the human-rights organization Amnesty International for its widespread use of torture. In 2010, Mandelson attended two events organized by the regime’s sovereign wealth fund, one in Kazakhstan itself. But it was the godfather of New Labour himself, Tony Blair, who benefited most profitably from ingratiating himself with the Kazakh dictator President Nursultan Nazarbayev. Blair, who once used the appalling human-rights record of dictatorships as justification for UK military intervention, was being paid up to $13 million a year from 2011 onwards to advise the regime.

‘It is disappointing that so much has been reserved for international funds and speculators, taking away from all individual applicants in the UK,’ complained Malcolm Hurlston, the chairman of the Esop Centre, which advocates workers’ shareholding schemes.18 Two-thirds of the company was bought up by City institutions; big winners included sovereign wealth funds, including foreign dictatorships such as Kuwait. One investor was Lansdowne Partners, one of the biggest hedge funds in the world, which made £18 million on the first day of the Royal Mail’s flotation on the London Stock Exchange: one of Lansdowne’s senior employees was Peter Davies, the best man of the Chancellor of the Exchequer.


Basic Income: A Radical Proposal for a Free Society and a Sane Economy by Philippe van Parijs, Yannick Vanderborght

Airbnb, Albert Einstein, basic income, Berlin Wall, Bertrand Russell: In Praise of Idleness, carbon tax, centre right, collective bargaining, cryptocurrency, David Graeber, declining real wages, degrowth, diversified portfolio, Edward Snowden, eurozone crisis, Fall of the Berlin Wall, feminist movement, full employment, future of work, George Akerlof, Herbert Marcuse, illegal immigration, income per capita, informal economy, Jeremy Corbyn, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, Marshall McLuhan, means of production, minimum wage unemployment, Money creation, open borders, Paul Samuelson, pension reform, Post-Keynesian economics, precariat, price mechanism, profit motive, purchasing power parity, quantitative easing, race to the bottom, road to serfdom, Robert Solow, Rutger Bregman, Second Machine Age, secular stagnation, selection bias, sharing economy, sovereign wealth fund, systematic bias, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, universal basic income, urban planning, urban renewal, War on Poverty, working poor

They take from money which, by constitutional mandate, belongs to all and allows each individual to determine how to spend some of his or her share. What could be more capitalistic?”105 Is it surprising that the Alaska dividend scheme has not been emulated elsewhere? Perhaps. Â�There are now over fifty countries with sovereign wealth funds similar to the Alaska Permanent Fund. Yet, despite variÂ�ous proposals, Alaska’s dividend scheme remains unique so far. Transnational Network: From EuÂ�rope to the Earth What had been happening in EuÂ�rope in the meanwhile? Not very much. With some delay, the exceptionally lively American debate of the late 1960s and early 1970s did produce a modest echo in some EuÂ�roÂ�pean countries.

A fund invested in a sufficiently diversified portfolio would help protect the sustainability of the payment. 39. Cummine (2011: 16–17) suspects that “managerial elitism” may explain this lack of enthusiasm: “Exaggerating the downside of dividends serves as a useful justificatory tool for current SWF [Sovereign Wealth Fund] arrangements where significant national savings stay Â�under the direct and relatively autonomous control of financial manÂ�agÂ�ers.” Contrary to what is sometimes asserted, Â�there is no basic income paid out of an oil fund in the gulf states, only generous conditional benefits reserved for their citizens. 40.

Crocker, Geoffrey. 2014. The Economic Necessity of Basic Income. Bristol: Technology Market Strategies. CSC (Confédération des syndicats chrétiens). 2002. “Dans quelle mesure mon revenu est-il juste?” Syndicaliste CSC 560, January 25. Cummine, Angela L. 2011. “Overcoming Dividend Skepticism: Why the World’s Sovereign Wealth Funds Are Not Paying Basic Income Dividends.” Basic Income Studies 6(1): 1–18. Cunha, Jesse M. 2014. “Testing Paternalism: Cash versus In-Â�Kind Transfers.” American Economic Journal: Applied Economics 6(2): 195–230. Cunliffe, John, and Guido Erreygers. 2001. “The Enigmatic Legacy of Charles Fourier: Joseph Charlier and Basic Income.”


pages: 238 words: 73,121

Does Capitalism Have a Future? by Immanuel Wallerstein, Randall Collins, Michael Mann, Georgi Derluguian, Craig Calhoun, Stephen Hoye, Audible Studios

affirmative action, blood diamond, Bretton Woods, BRICs, British Empire, business cycle, butterfly effect, company town, creative destruction, deindustrialization, demographic transition, Deng Xiaoping, discovery of the americas, distributed generation, Dr. Strangelove, eurozone crisis, fiat currency, financial engineering, full employment, gentrification, Gini coefficient, global village, hydraulic fracturing, income inequality, Isaac Newton, job automation, joint-stock company, Joseph Schumpeter, junk bonds, land tenure, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, loose coupling, low skilled workers, market bubble, market fundamentalism, mass immigration, means of production, mega-rich, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, offshore financial centre, oil shale / tar sands, Ponzi scheme, postindustrial economy, reserve currency, Ronald Reagan, shareholder value, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, Suez crisis 1956, too big to fail, transaction costs, vertical integration, Washington Consensus, WikiLeaks

Seeking to manage economic difficulties in the 1970s, the United States and other core capitalist countries brought the Bretton Woods monetary system to an end, replacing the stabilization of backing by precious metals with floating, infinitely tradable fiat currencies. After the 1973 Arab-Israeli war OPEC oil producers restricted supply, vastly multiplying their returns from a world deeply dependent on petroleum, and then channeled much of the money into sovereign wealth funds. But financialization was at its most extreme in the world’s long-standing core capitalist economies (and weaker economies yoked to them, for example by membership in the European Union or asymmetrical commodity trade). And while it was led by big capital it also drew in ordinary citizens who saw their incomes stagnate but continued high levels of spending by relying on credit.

The dense interconnections and rapid flows of global capitalism and global media made it seem immediately obvious that the crisis was simply global. This was half fact and half illusion, or perhaps a distortion based on perspective. The roiling of capital markets did have far-flung effects. Plunging asset prices damaged sovereign wealth funds in Abu Dhabi and nearly bankrupted its neighboring emirate, Dubai. Exacerbated unemployment—especially among youth—may have helped to spark the so-called Arab Spring (though clearly the economic crisis can be no more than part of a more complex story). Stock markets in Shanghai, Tokyo, and Johannesburg sank with those in New York and London, though they regained ground much faster.


pages: 264 words: 76,643

The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations by David Pilling

Airbnb, Alan Greenspan, banking crisis, Bernie Sanders, Big bang: deregulation of the City of London, Branko Milanovic, call centre, carbon tax, centre right, clean tech, clean water, collapse of Lehman Brothers, collateralized debt obligation, commoditize, Credit Default Swap, credit default swaps / collateralized debt obligations, dark matter, Deng Xiaoping, Diane Coyle, Donald Trump, double entry bookkeeping, Easter island, Erik Brynjolfsson, falling living standards, financial deregulation, financial engineering, financial intermediation, financial repression, Gini coefficient, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Google Hangouts, Great Leap Forward, Hans Rosling, happiness index / gross national happiness, Higgs boson, high-speed rail, income inequality, income per capita, informal economy, invisible hand, Jeremy Corbyn, job satisfaction, Mahatma Gandhi, Mahbub ul Haq, market fundamentalism, Martin Wolf, means of production, military-industrial complex, Monkeys Reject Unequal Pay, mortgage debt, off grid, old-boy network, Panopticon Jeremy Bentham, peak oil, performance metric, pez dispenser, profit motive, purchasing power parity, race to the bottom, rent-seeking, Robert Gordon, Ronald Reagan, Rory Sutherland, science of happiness, shareholder value, sharing economy, Simon Kuznets, sovereign wealth fund, TED Talk, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, Tragedy of the Commons, transaction costs, transfer pricing, trickle-down economics, urban sprawl, women in the workforce, World Values Survey

For the first twenty years, Oslo reinvested its growing oil revenues back into the oil industry itself and spent money on developing the country. But by the early 1990s, with oil revenues surpassing all expectations and forecast to continue for decades more, the government started planning for the future. It set up the Petroleum Fund of Norway, a sovereign wealth fund to hold savings for future generations. In 1996 the first oil money was transferred to the fund. Just twenty years later, what is more commonly known as the Oil Fund has become the biggest of its kind in the world, with holdings of around $875 billion.29 It invests what it likes to call “the people’s money” in three classes of assets—equity, bonds, and property, all outside Norway.

The account of Viken comes from “Discover How Norway Saved Its Vanishing Forests,” BBC, November 4, 2015: www.bbc.co.uk. 28. Tore Skroppa, “State of Forest Genetic Resource in Norway,” March 2012, p. iii: www.skogoglandskap.no/​filearchive. 29. Its formal name, changed in 2006, is actually the Government Pension Fund Global, a slightly confusing name given that it is not really a pension fund but a sovereign wealth fund. CHAPTER 12: THE LORD OF HAPPINESS 1. In 1975 pounds. 2. “Jeremy Bentham Makes Surprise Visit to UCL Council,” UCL News, July 10, 2013: www.ucl.ac.uk. 3. Jeremy Bentham, An Introduction to the Principles of Morals and Legislation, 1789. 4. William Davies, The Happiness Industry, Verso, 2015, p. 10. 5.


pages: 352 words: 80,030

The New Silk Roads: The Present and Future of the World by Peter Frankopan

"World Economic Forum" Davos, active measures, Berlin Wall, Big Tech, bitcoin, blockchain, Boris Johnson, cashless society, clean water, cryptocurrency, Deng Xiaoping, don't be evil, Donald Trump, Ethereum, ethereum blockchain, F. W. de Klerk, failed state, fake news, Fall of the Berlin Wall, global supply chain, high-speed rail, illegal immigration, income inequality, invisible hand, land reform, Londongrad, low interest rates, Mark Zuckerberg, mass incarceration, Meghnad Desai, Nelson Mandela, Paris climate accords, purchasing power parity, ransomware, Rubik’s Cube, smart cities, South China Sea, sovereign wealth fund, Steve Bannon, trade route, trickle-down economics, UNCLOS, urban planning, WikiLeaks, zero-sum game

In some cases, the dramatic fall in gas, oil and commodity prices during 2015 was the catalyst for a process of professionalisation, of clearing out poor practices and stamping down on corruption. Expectations had to be quickly reduced in Kazakhstan, for example, which is heavily dependent on sales of fossil fuels, as the price of oil fell from $115 to $33 per barrel in the space of eighteen months. This led to a squeeze on the sovereign wealth fund that was raided in order to help meet government obligations – with the result that assets fell by nearly 20 per cent in just over a year.113 Inevitably, this led not only to a recalibration of projected spending, but also to a clampdown on those who had done too well in times of plenty – men like Mukhtar Ablyazov, former chairman of BTA Bank, who is being pursued for the embezzlement of $4bn through courtrooms from Kazakhstan to Knightsbridge.114 A similar sobering process had begun in Russia following the slump in prices.

Policy Frameworks to Support Regional and Global Integration, July 2018. 110Jason Holland, ‘Turkmenistan opens US$2.25 billion airport with 1,100sq m of duty free and retail space’, The Moodie Davitt Report, 14 October 2016. 111Озодлик, ‘Бердымухамедов вызвал к себе руководство компании, строившей ашхабадский аэропорт из-за дефекта здания’, 13 January 2017. 112Альтернативные новости Туркменистана, ‘Ниже уровня толчка. В Гумдаге полиция занялась туалетами и мусорными свалками’, 21 May 2018. 113Attracta Mooney, ‘Kazakh sovereign wealth fund is latest victim of oil price fall’, Financial Times, 8 January 2016. 114Edward Robinson, ‘Bank’s $4 Billion Fraud Allegations Return to London Courtroom’, Bloomberg, 20 November 2017. 115Max Seddon, Lionel Barber and Kathrin Hille, ‘Elvira Nabiullina shuts down Russia’s banking “banditry”’, Financial Times, 19 October 2016. 116BNE Intellinews, ‘Taliban pledge protection as construction starts on Afghan part of TAPI pipeline’, 26 February 2018. 117Bruce Pannier, ‘Why Didn’t Turkmen, Uzbek Leaders Mention “Line D” To China?’


pages: 232 words: 76,830

Dreams of Leaving and Remaining by James Meek

"World Economic Forum" Davos, Affordable Care Act / Obamacare, agricultural Revolution, anti-communist, bank run, Boris Johnson, Brexit referendum, centre right, Corn Laws, corporate governance, Donald Trump, Elon Musk, Etonian, full employment, global supply chain, illegal immigration, Jeff Bezos, Jeremy Corbyn, Leo Hollis, low skilled workers, Martin Wolf, mega-rich, Neil Kinnock, North Sea oil, Northern Rock, obamacare, offshore financial centre, race to the bottom, Ronald Reagan, savings glut, Shenzhen special economic zone , Skype, sovereign wealth fund, special economic zone, Stephen Hawking, working-age population

Stitzer eventually walked away with £40 million in pay, pension and cashed-in shares when he left Cadbury after the company was swallowed up by another multinational, but at the time the Somerdale decision was taken the board was coming under fierce pressure from Cadbury’s big shareholders, particularly the hedge fund partner Nelson Peltz and his Qatar sovereign wealth fund investors, to deliver fatter returns on their investment. I contacted the three executive directors and eleven directors – Sir John Sunderland, Roger Carr, Rick Braddock, Ellen Marram, Guy Elliott, Rosemary Thorne, David Thompson, Sanjiv Ahuja, Wolfgang Berndt, Lord Patten and Raymond Viault.

Scaled up to the global level you have a system which, in its search for short-term efficiency and capital yield, restricts the power much of humanity has to consume what it produces. Multinational manufacturers of consumer goods cut their costs to the bone, sweating their wage and pension bill and buying up robots to deliver yield to the pension funds and sovereign wealth funds and hedge funds and wealthy families that own them; but who then will be able to afford the consumer goods? Those people who work for the other guy? But the other guy is doing the same thing. And robots don’t eat chocolate. Epilogue: Robin Hood The Robin Hood myth is the first and often the only political-economic fable we learn.


pages: 209 words: 80,086

The Global Auction: The Broken Promises of Education, Jobs, and Incomes by Phillip Brown, Hugh Lauder, David Ashton

active measures, affirmative action, An Inconvenient Truth, barriers to entry, Branko Milanovic, BRICs, business process, business process outsourcing, call centre, classic study, collective bargaining, corporate governance, creative destruction, credit crunch, David Ricardo: comparative advantage, deindustrialization, deskilling, disruptive innovation, Dutch auction, Ford Model T, Frederick Winslow Taylor, full employment, future of work, glass ceiling, global supply chain, Great Leap Forward, immigration reform, income inequality, industrial cluster, industrial robot, intangible asset, job automation, Jon Ronson, Joseph Schumpeter, knowledge economy, knowledge worker, low skilled workers, manufacturing employment, market bubble, market design, meritocracy, neoliberal agenda, new economy, Paul Samuelson, pensions crisis, post-industrial society, profit maximization, purchasing power parity, QWERTY keyboard, race to the bottom, Richard Florida, Ronald Reagan, shared worldview, shareholder value, Silicon Valley, sovereign wealth fund, stem cell, tacit knowledge, tech worker, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, transaction costs, trickle-down economics, vertical integration, winner-take-all economy, working poor, zero-sum game

The China 42 The Global Auction Investment Corporation has, for example, bought stakes in Blackstone and Morgan Stanley. The financial crisis has accelerated this process, and China’s access to the technologies and expertise it requires, as Anthony Leung, managing director of Blackstone Group Greater China, has suggested, is “a one-time-in-100-years chance for China’s Sovereign Wealth Funds to invest in good companies and acquire more shares.” It also gives Chinese companies a strategic opportunity to take “stakes in advanced overseas companies so that Chinese companies can learn how to move from the low end of the production chain to the high end.”32 Germany is a particular focus for China, and here their interest appears to be in the Mittlestand engineering companies.

They also targeted major R&D investments in fields offering potential for employment growth, including green technologies. Although these attempts will not always succeed, they highlight an active role for the state, aimed at exploiting the global market to rapidly upgrade the Chinese economy. New forms of state capitalism also emerged, including the growth of sovereign wealth funds used by countries including China, Singapore, and the Gulf states to buy into Western companies or to launch national champions, akin to General Motors in the 1950s. They recognized varieties of capitalism that do not correspond to the Anglo-Saxon hands-free variant. In many ways, there is nothing new about the way China has exploited the global economy to achieve rapid modernization, as Japan, Taiwan, South Korea, and Singapore all attempted to govern the market in pursuit of rapid economic growth.21 We have also shown that it was Western corporations seeking to take advantage of new markets that gave emerging economies the opportunity for high-end growth, as it is difficult to stop knowledge from being passed on to competitors.


pages: 280 words: 79,029

Smart Money: How High-Stakes Financial Innovation Is Reshaping Our WorldÑFor the Better by Andrew Palmer

Affordable Care Act / Obamacare, Alan Greenspan, algorithmic trading, Andrei Shleifer, asset-backed security, availability heuristic, bank run, banking crisis, behavioural economics, Black Monday: stock market crash in 1987, Black-Scholes formula, bonus culture, break the buck, Bretton Woods, call centre, Carmen Reinhart, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, computerized trading, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, David Graeber, diversification, diversified portfolio, Edmond Halley, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, eurozone crisis, family office, financial deregulation, financial engineering, financial innovation, fixed income, Flash crash, Google Glasses, Gordon Gekko, high net worth, housing crisis, Hyman Minsky, impact investing, implied volatility, income inequality, index fund, information asymmetry, Innovator's Dilemma, interest rate swap, Kenneth Rogoff, Kickstarter, late fees, London Interbank Offered Rate, Long Term Capital Management, longitudinal study, loss aversion, low interest rates, margin call, Mark Zuckerberg, McMansion, Minsky moment, money market fund, mortgage debt, mortgage tax deduction, Myron Scholes, negative equity, Network effects, Northern Rock, obamacare, payday loans, peer-to-peer lending, Peter Thiel, principal–agent problem, profit maximization, quantitative trading / quantitative finance, railway mania, randomized controlled trial, Richard Feynman, Richard Thaler, risk tolerance, risk-adjusted returns, Robert Shiller, Savings and loan crisis, short selling, Silicon Valley, Silicon Valley startup, Skype, South Sea Bubble, sovereign wealth fund, statistical model, subprime mortgage crisis, tail risk, Thales of Miletus, the long tail, transaction costs, Tunguska event, unbanked and underbanked, underbanked, Vanguard fund, web application

After the 1930s (a decade now lauded for its postcrisis regulatory overhaul), US banks were required by their regulators to use credit ratings to assess the creditworthiness of the fixed-income instruments they invest in; international rules still use ratings to determine the amount of equity banks have to use to fund these assets. Investment firms use credit ratings to specify what types of fixed-income products they can invest in, and the biggest pools of capital—pension funds, sovereign-wealth funds, and the like—are often confined to “investment-grade securities,” which carry a higher rating. You can see why Andrew Lo wants to do whatever he can to win over the ratings agencies: they open the door to the largest amounts of money. To add another level of protection, Lo also thinks there might be room for a third party to come in and offer a guarantee, so that if the drugs in the megafund fail to deliver enough income, the guarantor will make up the shortfall.

Hang around the industry long enough, and you’re bound to hear someone talk grandly about the “democratization of finance.” But the platforms also offer a way for big investors to get direct access to unsecured consumer-credit products. Institutional investors now account for more than two-thirds of loan volumes on Lending Club; insurers and sovereign-wealth funds have assigned pots as big as $100 million. Securitizations have already occurred: a hedge fund called Eaglewood Capital that was set up to invest in Lending Club loans bundled some of them into a securitized offering in the autumn of 2013. SoFi, another peer-to-peer lender specializing in student loans, won an investment-grade rating for a securitization from Standard & Poor’s in July 2014.


pages: 253 words: 79,214

The Money Machine: How the City Works by Philip Coggan

activist fund / activist shareholder / activist investor, algorithmic trading, asset-backed security, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, bond market vigilante , bonus culture, Bretton Woods, call centre, capital controls, carried interest, central bank independence, collateralized debt obligation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, disintermediation, diversification, diversified portfolio, Edward Lloyd's coffeehouse, endowment effect, financial deregulation, financial independence, floating exchange rates, foreign exchange controls, Glass-Steagall Act, guns versus butter model, Hyman Minsky, index fund, intangible asset, interest rate swap, inverted yield curve, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", joint-stock company, junk bonds, labour market flexibility, large denomination, London Interbank Offered Rate, Long Term Capital Management, low interest rates, merger arbitrage, Michael Milken, money market fund, moral hazard, mortgage debt, negative equity, Nick Leeson, Northern Rock, pattern recognition, proprietary trading, purchasing power parity, quantitative easing, reserve currency, Right to Buy, Ronald Reagan, shareholder value, South Sea Bubble, sovereign wealth fund, technology bubble, time value of money, too big to fail, tulip mania, Washington Consensus, yield curve, zero-coupon bond

There is little evidence that UK companies are short of capital and US and European investors are active in the UK market. Just as UK institutions invest overseas, overseas institutions buy into the UK market. Other countries have their own pension funds and insurance companies, of course. They also have mutual funds, the equivalent of unit trusts (see below). A fast-growing group of investors are so-called sovereign wealth funds. These are funds accumulated by overseas governments, such as China, Russia, Norway and the middle Eastern oil producers. All these countries have accumulated trade surpluses. This allows them to build up reserves. Traditionally, a lot of this money was held in the form of deposits or government bonds.

Holding its currency (the yuan) down means that Chinese inflation is likely to accelerate. America is fed up with the loss of manufacturing jobs to China and some politicians have muttered about trade barriers. In addition, China, Russia and others are diversifying their reserves away from government bonds and have set up sovereign wealth funds that invest in shares and property. That has led to fears in the West; big companies are being bought by funds controlled by our geopolitical rivals. The contrast with how Russia treats overseas investors (often forcing them out through legal and tax moves) is striking. THE FOREIGN-EXCHANGE MARKET Participants in the foreign-exchange market include everyone from the Governor of the Bank of England to tourists when they buy foreign currency for a holiday.


pages: 504 words: 139,137

Efficiently Inefficient: How Smart Money Invests and Market Prices Are Determined by Lasse Heje Pedersen

activist fund / activist shareholder / activist investor, Alan Greenspan, algorithmic trading, Andrei Shleifer, asset allocation, backtesting, bank run, banking crisis, barriers to entry, Bear Stearns, behavioural economics, Black-Scholes formula, book value, Brownian motion, business cycle, buy and hold, buy low sell high, buy the rumour, sell the news, capital asset pricing model, commodity trading advisor, conceptual framework, corporate governance, credit crunch, Credit Default Swap, currency peg, currency risk, David Ricardo: comparative advantage, declining real wages, discounted cash flows, diversification, diversified portfolio, Emanuel Derman, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, financial engineering, fixed income, Flash crash, floating exchange rates, frictionless, frictionless market, global macro, Gordon Gekko, implied volatility, index arbitrage, index fund, interest rate swap, junk bonds, late capitalism, law of one price, Long Term Capital Management, low interest rates, managed futures, margin call, market clearing, market design, market friction, Market Wizards by Jack D. Schwager, merger arbitrage, money market fund, mortgage debt, Myron Scholes, New Journalism, paper trading, passive investing, Phillips curve, price discovery process, price stability, proprietary trading, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, random walk, Reminiscences of a Stock Operator, Renaissance Technologies, Richard Thaler, risk free rate, risk-adjusted returns, risk/return, Robert Shiller, selection bias, shareholder value, Sharpe ratio, short selling, short squeeze, SoftBank, sovereign wealth fund, statistical arbitrage, statistical model, stocks for the long run, stocks for the long term, survivorship bias, systematic trading, tail risk, technology bubble, time dilation, time value of money, total factor productivity, transaction costs, two and twenty, value at risk, Vanguard fund, yield curve, zero-coupon bond

., technology stocks, healthcare stocks, or commodity-related stocks. Other long–short hedge funds specialize in value investing or growth investing. The large long–short equity hedge funds are often broad, but they might consist of several specialized teams. Discretionary equity investing is also used by active mutual funds, pension funds, sovereign wealth funds, and other traders. The main difference is that many of these investor types are long only. Hence, they will not just buy the stocks that they like, they will also overweight them relative to the benchmark, and, while they cannot short-sell stocks, they can underweight them relative to the benchmark or avoid them altogether.

PART III Asset Allocation and Macro Strategies CHAPTER 10 Introduction to Asset Allocation The Returns to the Major Asset Classes Design of a portfolio involves at least four steps: deciding which asset classes to include and which to exclude from the portfolio; deciding upon the normal, or long-term, weights for each of the asset classes allowed in the portfolio; altering the investment mix weights away from normal in an attempt to capture excess returns from short-term fluctuations in asset class prices (market timing); and selecting individual securities within an asset class to achieve superior returns relative to that asset class (security selection) —Brinson, Hood, and Beebower (1986) Macro investing deals with an investor’s overall asset allocation, that is, how much to invest in equities, bonds, and the other major asset classes. This macro investment goal can be separated into two components: (1) The long-term strategic asset allocation policy. For example, the Norwegian sovereign wealth fund (Norges Bank Investment Management) has had a benchmark portfolio (also called policy portfolio) of about 60% global equities and 40% global bonds. (2) The reallocations around the long-term weights based on current market views, called tactical asset allocation or market timing. For example, a pension fund that views the equity market as especially attractive may decide to temporarily increase its equity weight.

See also dedicated short bias hedge funds short squeeze, 118; predatory trading and, 84 Siamese twin stocks, 6, 149–50, 149f side pockets, 75 size risk, 29 Skilling, Jeff, 127 small-minus-big (SMB) factor, 29 smile, of time series momentum, 220–21, 220f smirk, of implied volatility, 239 SML (security market line), 140–41, 140f, 141n SoftBank, 318, 319 Soros, George, viii, 1, 11, 13, 15–16, 15t; famous trade by, shorting the pound, viii, 1, 187, 204, 320; on going for the jugular, 11–12, 321; Internet bubble and, 41, 203, 206; interview with, 204–7; Paulson’s learning from, 206, 320, 321; Scholes on, 264; theory developed by, 15t, 200–204 Soros Fund Management, 204 Sortino ratio, 32 sovereign bonds, 260 sovereign credit risk, 200 sovereign wealth funds, 96, 167 specialness, 245–46, 245f special purpose acquisition companies (SPACs), 313 special security structures, 313 spin-offs, 14, 291, 307–9, 308f; Paulson on, 314, 316 split-offs, 14, 307–9, 308f spreads: widening during periods of stress, 267–68. See also bid–ask spreads; credit spread; deal spread in merger arbitrage spread trades, Scholes on, 264, 265 Sprint, 318, 319 SR.


pages: 496 words: 131,938

The Future Is Asian by Parag Khanna

3D printing, Admiral Zheng, affirmative action, Airbnb, Amazon Web Services, anti-communist, Asian financial crisis, asset-backed security, augmented reality, autonomous vehicles, Ayatollah Khomeini, barriers to entry, Basel III, bike sharing, birth tourism , blockchain, Boycotts of Israel, Branko Milanovic, British Empire, call centre, capital controls, carbon footprint, cashless society, clean tech, clean water, cloud computing, colonial rule, commodity super cycle, computer vision, connected car, corporate governance, CRISPR, crony capitalism, cross-border payments, currency peg, death from overwork, deindustrialization, Deng Xiaoping, Didi Chuxing, Dissolution of the Soviet Union, Donald Trump, driverless car, dual-use technology, energy security, European colonialism, factory automation, failed state, fake news, falling living standards, family office, financial engineering, fixed income, flex fuel, gig economy, global reserve currency, global supply chain, Great Leap Forward, green transition, haute couture, haute cuisine, illegal immigration, impact investing, income inequality, industrial robot, informal economy, initial coin offering, Internet of things, karōshi / gwarosa / guolaosi, Kevin Kelly, Kickstarter, knowledge worker, light touch regulation, low cost airline, low skilled workers, Lyft, machine translation, Malacca Straits, Marc Benioff, Mark Zuckerberg, Masayoshi Son, megacity, megaproject, middle-income trap, Mikhail Gorbachev, money market fund, Monroe Doctrine, mortgage debt, natural language processing, Netflix Prize, new economy, off grid, oil shale / tar sands, open economy, Parag Khanna, payday loans, Pearl River Delta, prediction markets, purchasing power parity, race to the bottom, RAND corporation, rent-seeking, reserve currency, ride hailing / ride sharing, Ronald Reagan, Salesforce, Scramble for Africa, self-driving car, Shenzhen special economic zone , Silicon Valley, smart cities, SoftBank, South China Sea, sovereign wealth fund, special economic zone, stem cell, Steve Jobs, Steven Pinker, supply-chain management, sustainable-tourism, synthetic biology, systems thinking, tech billionaire, tech worker, trade liberalization, trade route, transaction costs, Travis Kalanick, uber lyft, upwardly mobile, urban planning, Vision Fund, warehouse robotics, Washington Consensus, working-age population, Yom Kippur War

Cross-Asian investment growth is inspiring plans for a great decoupling between oil and the dollar. In return for a strong investment in Saudi Aramco, Saudi Arabia may begin to sell China oil priced in renminbi. Welcome to the petroyuan.7 Gulf economies cannot achieve their goal of economic diversification without support from East Asia. GCC countries’ sovereign wealth funds (SWFs) manage a total of $3 trillion, and parking that money in London or low-yield US Treasury bonds is less and less a sensible option. Instead, they are rapidly repatriating hundreds of billions of dollars from the United States and United Kingdom to spend with the Asian and European contractors that are building their future transportation networks and industrial parks.

Their presence has inspired Asia-focused VCs, such as Golden Gate Ventures and East Ventures, while government-backed Asian funds have taken stakes in Silicon Valley incubators and accelerators, as Abu Dhabi Financial Group has done with the San Francisco–based 500 Startups. This rise of ever more regional start-ups has compelled Asian sovereign wealth funds such as Singapore’s GIC to increase their Asian tech portfolios beyond their superstar investments Alibaba and Xiaomi. The Boston-based tech PE firm TA Associates had zero international staff a decade ago, but now half its employees and investments are outside the United States, especially from Mumbai to Hong Kong.

At the International Telecommunications Union (ITU), where the future of Internet regulation is taking shape, Asian officials go toe to toe with Americans and Europeans on matters of data privacy and e-commerce regulation. The future landscape of global regulation appears to be a hybrid of conventional Western rules and Asian practices. Investments by Asian sovereign wealth funds will be robust, but much more scrutiny of deals will create greater transparency. The United States and European Union will ever more confidently block Chinese investments in their territories unless their companies are granted reciprocal access—and have protections for their innovations.


pages: 545 words: 137,789

How Markets Fail: The Logic of Economic Calamities by John Cassidy

Abraham Wald, Alan Greenspan, Albert Einstein, An Inconvenient Truth, Andrei Shleifer, anti-communist, AOL-Time Warner, asset allocation, asset-backed security, availability heuristic, bank run, banking crisis, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Black Monday: stock market crash in 1987, Black-Scholes formula, Blythe Masters, book value, Bretton Woods, British Empire, business cycle, capital asset pricing model, carbon tax, Carl Icahn, centralized clearinghouse, collateralized debt obligation, Columbine, conceptual framework, Corn Laws, corporate raider, correlation coefficient, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, Daniel Kahneman / Amos Tversky, debt deflation, different worldview, diversification, Elliott wave, Eugene Fama: efficient market hypothesis, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, financial intermediation, full employment, Garrett Hardin, George Akerlof, Glass-Steagall Act, global supply chain, Gunnar Myrdal, Haight Ashbury, hiring and firing, Hyman Minsky, income per capita, incomplete markets, index fund, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Nash: game theory, John von Neumann, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kickstarter, laissez-faire capitalism, Landlord’s Game, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, Louis Bachelier, low interest rates, mandelbrot fractal, margin call, market bubble, market clearing, mental accounting, Mikhail Gorbachev, military-industrial complex, Minsky moment, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Myron Scholes, Naomi Klein, negative equity, Network effects, Nick Leeson, Nixon triggered the end of the Bretton Woods system, Northern Rock, paradox of thrift, Pareto efficiency, Paul Samuelson, Phillips curve, Ponzi scheme, precautionary principle, price discrimination, price stability, principal–agent problem, profit maximization, proprietary trading, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, RAND corporation, random walk, Renaissance Technologies, rent control, Richard Thaler, risk tolerance, risk-adjusted returns, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Savings and loan crisis, shareholder value, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, statistical model, subprime mortgage crisis, tail risk, Tax Reform Act of 1986, technology bubble, The Chicago School, The Great Moderation, The Market for Lemons, The Wealth of Nations by Adam Smith, too big to fail, Tragedy of the Commons, transaction costs, Two Sigma, unorthodox policies, value at risk, Vanguard fund, Vilfredo Pareto, wealth creators, zero-sum game

Issuance of $1.5 billion in subprime mortgage securities, 2003–2006. Banks put many subprime securities on their books. Banks hold less capital and lever up their balance sheets. Credit Rating Agencies Paid by issuers. Generous fees. Most subprime securities rated “AAA” or “AA.” Hedge Funds/Sovereign Wealth Funds/Mutual Funds Ultralow interest rates. Investment-grade ratings for subprime securities. Search for “yield.” Heavy demand for subprime securities. Regulators/Policymakers “The Great Moderation.” Low inflation. Illusion of harmony/Illusion of stability. Disaster myopia. Interest rates too low.

In the ensuing months, almost all of Prince’s peers announced that their firms had suffered heavy losses, but none resigned. Several borrowed a trick from Morgan Stanley’s John Mack, who, just before Christmas, twinned the announcement of $9.4 billion in write-offs with news of a $5 billion equity injection on the part of a Chinese sovereign wealth fund. Even if Wall Street had gotten itself into a mess, Morgan’s announcement seemed to signal that there were plenty of rich (and not necessarily very smart) foreigners ready to bail it out. The subprime crisis was front-page news, but there was still surprisingly little public recognition of the damage it might do.

As the months passed, attention focused on some of the Wall Street firms that were most closely associated with the mortgage securitization industry: Merrill, Bear Stearns, and Lehman Brothers. Of these three, Merrill had taken the strongest steps to bolster its position, hiring as its new CEO John Thain, the former head of the New York Stock Exchange, and raising $6.6 billion from a group of investors that included Kuwaiti and Korean sovereign wealth funds. Bear and Lehman, which were known as savvy and aggressive trading houses, remained under the control of the executives who had led them to this pass. Both insisted they had adequate capital—in October 2007, Bear had raised $1 billion from a Chinese investment firm. Actually, their finances were precarious.


pages: 515 words: 132,295

Makers and Takers: The Rise of Finance and the Fall of American Business by Rana Foroohar

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, additive manufacturing, Airbnb, Alan Greenspan, algorithmic trading, Alvin Roth, Asian financial crisis, asset allocation, bank run, Basel III, Bear Stearns, behavioural economics, Big Tech, bonus culture, Bretton Woods, British Empire, business cycle, buy and hold, call centre, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, Carmen Reinhart, carried interest, centralized clearinghouse, clean water, collateralized debt obligation, commoditize, computerized trading, corporate governance, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, crowdsourcing, data science, David Graeber, deskilling, Detroit bankruptcy, diversification, Double Irish / Dutch Sandwich, electricity market, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial deregulation, financial engineering, financial intermediation, Ford Model T, Frederick Winslow Taylor, George Akerlof, gig economy, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Greenspan put, guns versus butter model, High speed trading, Home mortgage interest deduction, housing crisis, Howard Rheingold, Hyman Minsky, income inequality, index fund, information asymmetry, interest rate derivative, interest rate swap, Internet of things, invisible hand, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", John Bogle, John Markoff, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, London Whale, Long Term Capital Management, low interest rates, manufacturing employment, market design, Martin Wolf, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, offshore financial centre, oil shock, passive investing, Paul Samuelson, pensions crisis, Ponzi scheme, principal–agent problem, proprietary trading, quantitative easing, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, Rana Plaza, RAND corporation, random walk, rent control, Robert Shiller, Ronald Reagan, Satyajit Das, Savings and loan crisis, scientific management, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Snapchat, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Steve Jobs, stock buybacks, subprime mortgage crisis, technology bubble, TED Talk, The Chicago School, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, too big to fail, Tragedy of the Commons, trickle-down economics, Tyler Cowen: Great Stagnation, Vanguard fund, vertical integration, zero-sum game

said hedge fund portfolio manager Michael Masters in testimony on the topic before the US Senate Committee on Homeland Security and Governmental Affairs in May 2008. “What we are experiencing is a demand shock coming from a new category of participant in the commodities futures markets…corporate and government pension funds, sovereign wealth funds, university endowments, and other institutional investors. Collectively, these investors now account on average for a larger share of outstanding commodities futures contracts than any other market participant.”28 It’s a trend that has only strengthened since then, as a good chunk of the $4.5 trillion that the Federal Reserve dumped into the markets to try to buoy the economy following the financial crisis ended up either in commodities or in emerging market economies that were essentially plays on the commodity markets.29 The fact that these markets have since collapsed, as hot money fled in the wake of the Fed’s pullback from quantitative easing, only shows just how financialized they’ve become.

According to some recent surveys, about 1 in 14 American workers is employed by a firm that’s owned at least in part by a private equity company.24 Even more amazing, many of us are funding these very same firms, via our pension and mutual funds. Private equity has in recent years raised most of its money from institutional investors like pension funds (which supply 44 percent of their capital) as well as mutual funds, sovereign wealth funds, and wealthy individuals, and then invested that money in a group of portfolio companies. It’s an incredible system when you think about it. Our nest eggs fund the very firms that are quite likely to cut our jobs, which of course makes it impossible to buy a home. Meanwhile, private equity capitalizes on that fact by making huge profits in a market that many average consumers don’t have the financial capacity to engage in.

Talk about a closed loop of financialization. Why would such large institutional investors give their money to the wolves of Wall Street? Because they are under increasing pressure to meet their own return obligations. Pensioners need to be paid, universities need to be funded, governments in repressive countries need to grow their sovereign wealth funds so they can keep offering their people economic subsidies rather than political freedom, and so on. In many cases, the promises that such investors have made to their stakeholders were unrealistic in the first place. Many pension funds, for example, promise 8 percent annual returns, a number that seems unbelievable in the current economic climate.


pages: 77 words: 18,414

How to Kick Ass on Wall Street by Andy Kessler

Andy Kessler, Bear Stearns, Bernie Madoff, buttonwood tree, call centre, collateralized debt obligation, eat what you kill, family office, fixed income, hiring and firing, invention of the wheel, invisible hand, London Whale, low interest rates, margin call, NetJets, Nick Leeson, pets.com, risk tolerance, Silicon Valley, sovereign wealth fund, time value of money, too big to fail, value at risk

I think your goal is to visualize and what the heck, actually draw a picture of how money flows or, as I like to say, sloshes around Wall Street. You need to see how the pieces are interconnected. Start with the asset managers on the buy side, the hedge funds, family offices, endowments, pensions, sovereign wealth funds, thrifts, insurance companies, venture capital firms, private equity firms, financial investors, rich dudes, who is servicing who and how does the money end up in the right hands. Then on the sell side, start connecting the dots between the bulge bracket firms, universal banks, broker dealers, wire houses, wealth platforms and intermediaries.


pages: 444 words: 86,565

Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions by Joshua Rosenbaum, Joshua Pearl, Joseph R. Perella

accelerated depreciation, asset allocation, asset-backed security, bank run, barriers to entry, Benchmark Capital, book value, business cycle, capital asset pricing model, collateralized debt obligation, corporate governance, credit crunch, discounted cash flows, diversification, equity risk premium, financial engineering, fixed income, impact investing, intangible asset, junk bonds, London Interbank Offered Rate, performance metric, risk free rate, shareholder value, sovereign wealth fund, stocks for the long run, subprime mortgage crisis, technology bubble, time value of money, transaction costs, yield curve

EXHIBIT 4.2 Key Participants Financial Sponsors The term “financial sponsor” refers to traditional private equity (PE) firms, merchant banking divisions of investment banks, hedge funds, venture capital funds, and special purpose acquisition companies (SPACs), among other investment vehicles. PE firms, hedge funds, and venture capital funds raise the vast majority of their investment capital from third-party investors, which include public and corporate pension funds, insurance companies, endowments and foundations, sovereign wealth funds, and wealthy families/individuals. Sponsor partners and investment professionals may also invest their own money in particular investment opportunities. This capital is organized into funds that are usually established as limited partnerships. Limited partnerships are typically structured as a fixed-life investment vehicle, in which the general partner (GP, i.e., the sponsor) manages the fund on a day-to-day basis and the limited partners (LPs) serve as passive investors.115 These vehicles are considered “blind pools” in that the LPs subscribe without specific knowledge of the investment(s) that the sponsor plans to make.116 However, sponsors are often limited in the amount of the fund’s capital that can be invested in any particular business, typically no more then 10% to 20%.

See selling, general & administrative share price accretion/(dilution) analysis implied performance benchmarking systematic risk unaffected shareholder approval shareholder vote shareholders’ equity short-form LBO model SIC. See Standard Industrial Classification system size, of company key financial data market valuation size premium (SP) small-cap sources and uses of funds sovereign wealth funds SOX. See Sarbanes-Oxley Act of 2002 SP. See size premium S&P. See Standard & Poor’s S&P 500 SPACs. See special purpose acquisition companies special dividends special purpose acquisition companies (SPACs) Sponsor Case/Model sponsors. See financial sponsors spreading comparable companies precedent transactions springing financial covenant standalone Standard & Poor’s (S&P) Standard & Poor’s Leveraged Commentary & Data Group Standard Industrial Classification (SIC) system standstill agreement stapled financing state law steady state stock-for-stock transaction stock options stock price.


pages: 303 words: 83,564

Exodus: How Migration Is Changing Our World by Paul Collier

Ayatollah Khomeini, Boris Johnson, charter city, classic study, Edward Glaeser, experimental economics, first-past-the-post, full employment, game design, George Akerlof, global village, guest worker program, illegal immigration, income inequality, informal economy, language acquisition, mass immigration, mirror neurons, moral hazard, open borders, radical decentralization, risk/return, Silicon Valley, sovereign wealth fund, Steven Pinker, tacit knowledge, The Wealth of Nations by Adam Smith, transaction costs, University of East Anglia, white flight, zero-sum game

While in such extreme instances governments are right to fear diasporas, more commonly policies of discouragement appear to be based on little more than resentment at success. For example, Haiti, with its huge latent diaspora asset, has denied migrants the right to dual citizenship. Governments are only slowly waking up to the need to manage this asset as carefully as a conventional sovereign wealth fund. The potential is far greater: while placing substantial financial capital abroad at negligible interest rates makes little sense for a poor country, it will inevitably have a huge stock of human capital abroad and so should plan to use it well. The diaspora as an asset is of particular importance in postconflict situations following civil wars.

While resource-based growth has often proved to be unsustainable, as I discussed in The Plundered Planet, it may be the trigger for attracting back the diaspora. Such a coordinated influx of talented people may be critical in breaking bottlenecks and so improve the chances that growth can be sustained. A large diaspora is a latent asset for a country of origin that can be tapped once the conditions are right. It is a human variant on the sovereign wealth funds that are now fashionable. Where does this leave the “brain drain” as a concern? For developing countries as a group the concern is clearly misplaced: gains outweigh losses. But the category “developing country” can no longer be taken seriously. China, India, and many other countries are rapidly converging on the high-wage countries.


pages: 449 words: 85,924

Lonely Planet Maldives (Travel Guide) by Planet, Lonely, Masters, Tom

British Empire, car-free, carbon footprint, haute cuisine, income inequality, Skype, sovereign wealth fund, sustainable-tourism, trade route, women in the workforce

While the political will to get an international agreement on how best to combat climate change may finally be within sight, the Maldives has long been making contingency plans in the likely event that whatever the international community does will be too little, too late. These contingency plans range from an already well-established project to reclaim land on a reef near Male to create a new island 2m above sea level, to a plan to set aside a portion of the country’s annual billion-dollar tourism revenue for a sovereign wealth fund to purchase a new homeland for the Maldivians if rising sea levels engulf the country in decades to come. Both options are fairly bleak ones – the prospect of moving to the new residential island of Hulhumale is not one relished by most Maldivians, who are attached to their home islands and traditional way of life, but the prospect of the entire country moving to India, Sri Lanka or even Australia (as has been suggested) is an even more sobering one.

Most obviously this includes the land reclamation project that has created 2m-high Hulhumale island next to the airport, which one day will house around half the country’s population and all of the government. If the day does indeed come when waters engulf the entire country, then in theory the government’s sovereign wealth fund may be used to buy land elsewhere in the world for at least some, if not all, of the Maldivian population. India and Sri Lanka are the most likely destinations due to proximity and similarities in culture, climate and cuisine, but Australia is also frequently mooted given its large amount of free space.


pages: 261 words: 86,905

How to Speak Money: What the Money People Say--And What It Really Means by John Lanchester

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, asset allocation, Basel III, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, blood diamond, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collective bargaining, commoditize, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Dava Sobel, David Graeber, disintermediation, double entry bookkeeping, en.wikipedia.org, estate planning, fear index, financial engineering, financial innovation, Flash crash, forward guidance, Garrett Hardin, Gini coefficient, Glass-Steagall Act, global reserve currency, high net worth, High speed trading, hindsight bias, hype cycle, income inequality, inflation targeting, interest rate swap, inverted yield curve, Isaac Newton, Jaron Lanier, John Perry Barlow, joint-stock company, joint-stock limited liability company, junk bonds, Kodak vs Instagram, Kondratiev cycle, Large Hadron Collider, liquidity trap, London Interbank Offered Rate, London Whale, loss aversion, low interest rates, margin call, McJob, means of production, microcredit, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, negative equity, neoliberal agenda, New Urbanism, Nick Leeson, Nikolai Kondratiev, Nixon shock, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, oil shock, open economy, paradox of thrift, plutocrats, Ponzi scheme, precautionary principle, proprietary trading, purchasing power parity, pushing on a string, quantitative easing, random walk, rent-seeking, reserve currency, Richard Feynman, Right to Buy, road to serfdom, Ronald Reagan, Satoshi Nakamoto, security theater, shareholder value, Silicon Valley, six sigma, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Jobs, survivorship bias, The Chicago School, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tragedy of the Commons, trickle-down economics, two and twenty, Two Sigma, Tyler Cowen, Washington Consensus, wealth creators, working poor, yield curve

sovereign In an economic context the term means to do with nations—I don’t know why the word “sovereign” is so popular, but it’s a quick fix to replace it with “national.” A sovereign wealth fund is a national body of pooled investments; such funds are huge players in the global financial markets, because of their sheer size combined with their ability to act with a single purpose. (The importance of sovereign wealth is a recent phenomenon: the term “sovereign wealth fund” was invented only in 2005.) Sovereign debt means the nation’s public debt, as opposed to all the other different kinds of debt owed by the citizens and corporations of a country.


pages: 497 words: 144,283

Connectography: Mapping the Future of Global Civilization by Parag Khanna

"World Economic Forum" Davos, 1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Anthropocene, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, Carl Icahn, charter city, circular economy, clean water, cloud computing, collateralized debt obligation, commoditize, complexity theory, continuation of politics by other means, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, digital capitalism, digital divide, digital map, disruptive innovation, diversification, Doha Development Round, driverless car, Easter island, edge city, Edward Snowden, Elon Musk, energy security, Ethereum, ethereum blockchain, European colonialism, eurozone crisis, export processing zone, failed state, Fairphone, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, fixed income, forward guidance, gentrification, geopolitical risk, global supply chain, global value chain, global village, Google Earth, Great Leap Forward, Hernando de Soto, high net worth, high-speed rail, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial cluster, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, LNG terminal, low cost airline, low earth orbit, low interest rates, manufacturing employment, mass affluent, mass immigration, megacity, Mercator projection, Metcalfe’s law, microcredit, middle-income trap, mittelstand, Monroe Doctrine, Multics, mutually assured destruction, Neal Stephenson, New Economic Geography, new economy, New Urbanism, off grid, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Parag Khanna, Peace of Westphalia, peak oil, Pearl River Delta, Peter Thiel, Philip Mirowski, Planet Labs, plutocrats, post-oil, post-Panamax, precautionary principle, private military company, purchasing power parity, quantum entanglement, Quicken Loans, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Solow, rolling blackouts, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, systems thinking, TaskRabbit, tech worker, TED Talk, telepresence, the built environment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, Tim Cook: Apple, trade route, Tragedy of the Commons, transaction costs, Tyler Cowen, UNCLOS, uranium enrichment, urban planning, urban sprawl, vertical integration, WikiLeaks, Yochai Benkler, young professional, zero day

The primacy of connectivity allows smaller states to have far greater gravity than their size would suggest. Singapore and the Netherlands have high flow intensity because they depend more on the in- and outflow of goods, services, finance, people, and data than large countries. Norway is a relatively small and geographically remote Arctic country, but its oil-generated sovereign wealth fund is the world’s largest and controls 1 percent of global stock exchange value and 3 percent in Europe. As it expands its emerging market portfolio allocation to 10 percent, its leverage over hundreds of major international companies will grow as well.7 More connectivity means more growth and more flows.

Additionally, the most vanilla of financial products, mutual and bond funds, which collectively represent another $30 trillion, are increasing exposure to foreign equities as well, putting money into mid-cap and large-cap companies abroad while leveraging their growth to generate returns for mom-and-pop retail investors at home. Official capital holdings have also expanded steadily in recent years. Central bank reserves have climbed to over $8 trillion, mostly concentrated in Asia, where governments are channeling ever more of this cash into government investment vehicles known as sovereign wealth funds (SWFs), collectively valued at $6 trillion, which are starting to deploy their capital in more adventurous ways across real estate, banks, and other companies (especially to compensate for falling revenues as oil prices decline). SWFs often invest with private equity funds, estimated to hold slightly more than $2 trillion in assets, or hedge funds that represent another $2 trillion in capital.

International organizations and liberal governments are instead switching their focus to using their role and leverage in supply chains to promote sustainability. The IFC’s Equator Principles, for example, won’t invest in projects dependent on coal-generated power unless there is absolutely no alternative. Norway’s sovereign wealth fund, the world’s largest, has divested from all coal-related investments. Investors, insurers, and asset managers have moved in a similar direction. Socially responsible investment funds actively screen a combined $4 trillion portfolio, looking beyond parent companies deep into their tens of thousands of suppliers to measure compliance with environmental standards.


pages: 363 words: 92,422

A Fine Mess by T. R. Reid

accelerated depreciation, Affordable Care Act / Obamacare, Alan Greenspan, Bernie Sanders, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, carried interest, centre right, clean water, Donald Trump, Double Irish / Dutch Sandwich, game design, Gini coefficient, High speed trading, Home mortgage interest deduction, Honoré de Balzac, income inequality, industrial robot, land value tax, loss aversion, mortgage tax deduction, obamacare, Occupy movement, offshore financial centre, oil shock, plutocrats, race to the bottom, Ronald Reagan, seigniorage, Silicon Valley, Skype, Snapchat, sovereign wealth fund, Tax Reform Act of 1986, Tesla Model S, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, We are the 99%, WikiLeaks

In the 1970s, when it became clear that the frozen northern tundra of the forty-ninth state was situated over an enormous underground lake of crude oil, the state government had a long shopping list of ways to spend the severance tax revenue that began pouring in. But some farsighted political leaders decided—over loud opposition—to set aside a portion of the oil tax, invest the money, and save it for the future. This kind of rainy-day fund is formally known as a “sovereign wealth fund.” But the one in Alaska bears an optimistic name—the “Permanent Fund”—on the theory that the money will always be there in time of need. In 1977, its first full year of operation, the Alaska Permanent Fund took in $734,000. By 2016, the fund totaled $53.7 billion and was making more each year on investment income than from oil revenues.

These tax-free arrangements can dry up rapidly if the oil runs out or if the price of oil plummets on world markets, as it did in 2014. The extended swoon in the price of crude oil over the next two years badly stretched government coffers in the Middle East, even among those farsighted countries that had set aside a chunk of their annual oil earnings in sovereign wealth funds, which act like national rainy-day funds. By 2015, several of the Middle East’s no-tax territories were considering, or enacting, sales taxes, capital gains taxes, and tariffs on imported goods. In 2016, facing a severe budget deficit, Alaska cut its cherished Permanent Fund Dividend by 50%, setting a cap of $1,000 for each recipient; even more shocking, there was growing pressure to bring back a state income tax.


pages: 346 words: 89,180

Capitalism Without Capital: The Rise of the Intangible Economy by Jonathan Haskel, Stian Westlake

23andMe, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, Albert Einstein, Alvin Toffler, Andrei Shleifer, bank run, banking crisis, Bernie Sanders, Big Tech, book value, Brexit referendum, business climate, business process, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, cloud computing, cognitive bias, computer age, congestion pricing, corporate governance, corporate raider, correlation does not imply causation, creative destruction, dark matter, Diane Coyle, Donald Trump, Douglas Engelbart, Douglas Engelbart, driverless car, Edward Glaeser, Elon Musk, endogenous growth, Erik Brynjolfsson, everywhere but in the productivity statistics, Fellow of the Royal Society, financial engineering, financial innovation, full employment, fundamental attribution error, future of work, gentrification, gigafactory, Gini coefficient, Hernando de Soto, hiring and firing, income inequality, index card, indoor plumbing, intangible asset, Internet of things, Jane Jacobs, Jaron Lanier, Jeremy Corbyn, job automation, Kanban, Kenneth Arrow, Kickstarter, knowledge economy, knowledge worker, laissez-faire capitalism, liquidity trap, low interest rates, low skilled workers, Marc Andreessen, Mother of all demos, Network effects, new economy, Ocado, open economy, patent troll, paypal mafia, Peter Thiel, pets.com, place-making, post-industrial society, private spaceflight, Productivity paradox, quantitative hedge fund, rent-seeking, revision control, Richard Florida, ride hailing / ride sharing, Robert Gordon, Robert Solow, Ronald Coase, Sand Hill Road, Second Machine Age, secular stagnation, self-driving car, shareholder value, sharing economy, Silicon Valley, six sigma, Skype, software patent, sovereign wealth fund, spinning jenny, Steve Jobs, sunk-cost fallacy, survivorship bias, tacit knowledge, tech billionaire, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, total factor productivity, TSMC, Tyler Cowen, Tyler Cowen: Great Stagnation, urban planning, Vanguard fund, walkable city, X Prize, zero-sum game

There may also be a different strategy available to the largest institutional investors: to invest broadly across an ecosystem, to such an extent that it is worth approving management plans for intangible investments even if they have large spillovers, since these large investors will benefit from the investment even if a different firm takes advantage of it because they have a stake in the industry as a whole. This tactic of investing across a particular industry (such as energy) could be applied more broadly perhaps—especially by very large investors such as sovereign wealth funds. This seems to be the most likely way that a latter-day generation of Bell Labs might arise under private finance. We will probably also see an expansion of venture capital, though whether serious VC sectors will arise in many places, or break through into entirely new sectors, is less certain.

Second, it can reexamine standards of financial accounting to identify better ways of reflecting intangible investments (following the lead of the designers of California’s planned Long-Term Stock Exchange or of accounting scholar Baruch Lev’s reform agenda set out in The End of Accounting). There may also be a different strategy available to those governments fortunate enough to run sovereign wealth funds or large, endowed state pension funds. As we have seen, the largest institutional investors may be able to invest broadly across an ecosystem, knowing that they can benefit from spillovers of intangible investments even if an individual company they have backed does not. These larger national funds could be deployed to invest in particular ecosystems (in the way that Fidelity is reported to have invested across Elon Musk’s intangible-intensive business empire).


pages: 287 words: 86,870

The Glass Hotel by Emily St. John Mandel

Bernie Madoff, big-box store, discrete time, East Village, high net worth, McMansion, off-the-grid, Panamax, Pepto Bismol, Ponzi scheme, sovereign wealth fund, white picket fence, Y2K

Oskar drew near, to see if he could decipher the signature in the lower right corner of the painting, and found that he could: Olivia Collins. He recognized the name. Harvey had told him to give her a higher-than-normal rate of return, because Alkaitis liked her, and this was something he’d carefully avoided thinking about until this moment. Some of the investors were institutions. Some of them were sovereign wealth funds. There were charities and retirement funds, unions and schools. There were individuals who lived at a level of wealth that Oskar could barely imagine, even after all these years in the city, even standing here in an apartment in the sky in one of the most expensive neighborhoods in the world.

When Alkaitis thinks about how much money he provided, all the checks he sent out over the years, he feels a hollow rage. “I’m not saying what I did was right but by any rational analysis I did some good in the world,” he writes to Julie Freeman. “By which I mean I made a lot of money over a period of decades for a lot of people, a lot of charities, many sovereign wealth funds and pension funds, etc., and I know that might seem self-justifying but the numbers are the numbers and if you look at investments vs. returns, most of those people/entities took out far more than they put in and made far more money than if they’d just invested in the stock market and therefore I would suggest that it is inaccurate to refer to them as ‘victims.’ ” * * * — “Well,” he said to Suzanne, in the hospice, “at least now you won’t have to go to prison when the scheme collapses.”


pages: 384 words: 93,754

Green Swans: The Coming Boom in Regenerative Capitalism by John Elkington

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, agricultural Revolution, Anthropocene, anti-fragile, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, Berlin Wall, bitcoin, Black Swan, blockchain, Boeing 737 MAX, Boeing 747, Buckminster Fuller, business cycle, Cambridge Analytica, carbon footprint, carbon tax, circular economy, Clayton Christensen, clean water, cloud computing, corporate governance, corporate social responsibility, correlation does not imply causation, creative destruction, CRISPR, crowdsourcing, David Attenborough, deglobalization, degrowth, discounted cash flows, distributed ledger, do well by doing good, Donald Trump, double entry bookkeeping, drone strike, Elon Musk, en.wikipedia.org, energy transition, Extinction Rebellion, Future Shock, Gail Bradbrook, Geoffrey West, Santa Fe Institute, George Akerlof, global supply chain, Google X / Alphabet X, green new deal, green transition, Greta Thunberg, Hans Rosling, hype cycle, impact investing, intangible asset, Internet of things, invention of the wheel, invisible hand, Iridium satellite, Jeff Bezos, John Elkington, Jony Ive, Joseph Schumpeter, junk bonds, Kevin Kelly, Kickstarter, M-Pesa, Marc Benioff, Mark Zuckerberg, Martin Wolf, microplastics / micro fibres, more computing power than Apollo, move fast and break things, Naomi Klein, Nelson Mandela, new economy, Nikolai Kondratiev, ocean acidification, oil shale / tar sands, oil shock, opioid epidemic / opioid crisis, placebo effect, Planet Labs, planetary scale, plant based meat, plutocrats, Ponzi scheme, radical decentralization, Ralph Nader, reality distortion field, Recombinant DNA, Rubik’s Cube, Salesforce, self-driving car, shareholder value, sharing economy, Sheryl Sandberg, Silicon Valley, smart cities, smart grid, sovereign wealth fund, space junk, Steven Pinker, Stewart Brand, supply-chain management, synthetic biology, systems thinking, The future is already here, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Tim Cook: Apple, urban planning, Whole Earth Catalog

Think, too, of reports that carbon dioxide emissions, instead of declining, have been growing, in part because much economic growth in China is still fueled by coal. But as the carbon vortex gains momentum, there is also evidence of an equal and opposite vortex pulling us toward breakthrough innovation and a more sustainable future. Remember the Norwegian Sovereign Wealth Fund’s landmark commitment to run down its coal industry holdings. Or Siemens explaining that the major job cuts planned for its gas turbine business have been partly triggered by the renewable energy boom. GE, which decided to double down on coal, despite its much vaunted “Ecomagination” platform, is now caught in the same market riptides, forced to eliminate thousands of jobs from its power division.

., 21–22 miracles, 23–24, 40–41 mission statements, 49 Mission-Oriented Research and Innovation in the European Union (Mazzucato), 60–61 mobile phone safety, 125–126 mobility solutions, 178 “Model Crisis” stage, in paradigm shift, 122, 123 “Model Drift” stage, in paradigm shift, 122, 123 “Model Revolution” stage, in paradigm shift, 122 moderators, Facebook, 131 modern diet, 98–102 Monks, Bob, 26 Monsanto, 68, 119 Morton, Oliver, 180 Mozaffarian, Dariush, 99, 100 Muilenberg, Dennis, 195, 196 Musk, Elon, 78, 214, 220, 247 Myanmar, 53 N Nader, Ralph, 184 NASA, 112, 114 Natura, 227 natural disasters, 135–137 natural resources, shared, 204 Natural Step movement, 151 The Nature Conservancy, 254 Neste, 245 Nestlé, 59–60, 96 Netflix, 131 Neuralink, 247 New Crop Capital, 233 New Deal, 16, 204, 235 New Plastics Economy program, Ellen MacArthur Foundation, 97 New Rules for the New Economy (Kelly), 36 New Wave Foods, 233 New World, European colonization of, 29, 43 The New York Times (newspaper), 131, 226–227 New Zealand, 209 Newsweek (magazine), 99 “Normal Science” stage, in paradigm shift, 121–122, 123 Norway, 211 Norwegian Sovereign Wealth Fund, 216 Novacene epoch, 231 Novartis, 61–63 Novo Nordisk, 32, 101, 153, 154–159 O obesity, 98, 100–101 The Observer (newspaper), 125–126, 170 Ocasio-Cortez, Alexandria, 226, 228, 235 Ocean Hugger, 233 oceans, plastics in, 92, 97 O’Donohoe, Nick, 45 Office of Technology Assessment (OTA), 182–184, 185 oil companies, 77–78, 127, 128–129 oil sands industry, 244 oil tankers, 243 100 Resilient Cities initiative, 138 OneWeb, 115 opioid crisis, 13 Oppenheim, Jeremy, 232–233, 234 orbital debris, 112–114 O’Reilly, Tim, 78–80 Ørsted, 214–215 Ostrom, Elinor, 204 Out of Control (Kelly), 36 overweight, 100–101 Øvlisen, Mads, 154 P PA Consulting, 34–36 Page, Carl, 34, 64 Page, Larry, 34, 64 Paquin, Sheldon, 107 paradigm, defined, 121 paradigm shift, 121–122, 191, 230.


pages: 279 words: 87,875

Underwater: How Our American Dream of Homeownership Became a Nightmare by Ryan Dezember

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", activist fund / activist shareholder / activist investor, Airbnb, Bear Stearns, business cycle, call centre, Carl Icahn, Cesare Marchetti: Marchetti’s constant, cloud computing, collateralized debt obligation, company town, coronavirus, corporate raider, COVID-19, Credit Default Swap, credit default swaps / collateralized debt obligations, data science, deep learning, Donald Trump, Home mortgage interest deduction, housing crisis, interest rate swap, low interest rates, margin call, McMansion, mortgage debt, mortgage tax deduction, negative equity, opioid epidemic / opioid crisis, pill mill, rent control, rolodex, Savings and loan crisis, sharing economy, sovereign wealth fund, transaction costs

Condo developers from the Gulf Coast courted Blackstone’s dealmakers, but when they got a look at the sales contracts, they learned that buildings purported to be sold out had really just been reserved by parties related to the developer and a few speculators aiming to flip. There was no reason to assume real buyers would ever materialize. Blackstone decided to sit out the most frenzied moments of the residential real estate mania. Because of its restraint and decade-long grip on its investors’ cash, the firm had billions of dollars from pensions, sovereign wealth funds, and rich families with which to go bargain hunting when the bubble burst. In 2012, Gray was back home in Chicago visiting family for Thanksgiving when he and his father hopped in the car and went for an after-dinner spin to do some due diligence. Gray wanted to see for himself what sorts of foreclosures were out there.

Investors around the world were getting comfortable with the idea that clusters of suburban homes could be managed efficiently enough to be profitable and were lined up at rental managers’ doors in hopes of emulating the success of early investors such as Alaska’s oil fund, which banked a $300 million profit in 2016 selling American Homes 4 Rent stock. Money flowed from all corners. At a time when not many other investments delivered much of a yield, rental houses cranked out cash. Bond-buying insurance companies, hedge funds, pension plans, sovereign wealth funds, stock market investors, community banks, and even Chinese millionaires wanted a piece of the action. Jordan Kavana, a Florida real estate investor who bought foreclosed homes and nonperforming loans after the crash, wrangled millionaires in China and pooled their cash to buy and build rental homes in the Southeast.


pages: 326 words: 91,532

The Pay Off: How Changing the Way We Pay Changes Everything by Gottfried Leibbrandt, Natasha de Teran

"World Economic Forum" Davos, Alan Greenspan, Ayatollah Khomeini, bank run, banking crisis, banks create money, Bear Stearns, Big Tech, bitcoin, blockchain, call centre, cashless society, Clayton Christensen, cloud computing, coronavirus, COVID-19, Credit Default Swap, cross-border payments, cryptocurrency, David Graeber, Donald Trump, Edward Snowden, Ethereum, ethereum blockchain, financial exclusion, global pandemic, global reserve currency, illegal immigration, information asymmetry, initial coin offering, interest rate swap, Internet of things, Irish bank strikes, Julian Assange, large denomination, light touch regulation, lockdown, low interest rates, M-Pesa, machine readable, Money creation, money: store of value / unit of account / medium of exchange, move fast and break things, Network effects, Northern Rock, off grid, offshore financial centre, payday loans, post-industrial society, printed gun, QR code, RAND corporation, ransomware, Real Time Gross Settlement, reserve currency, Rishi Sunak, Silicon Valley, Silicon Valley startup, Skype, smart contracts, sovereign wealth fund, special drawing rights, tech billionaire, the payments system, too big to fail, transaction costs, WikiLeaks, you are the product

At the fund’s peak in 2018, Yuebao holdings averaged at $430 per user. Correcting for purchasing power (GDP per Facebook user is about three times that of Alipay), that gives us a fund of close to $3 trillion. That would be by far the largest fund in the world – approximately the same as the sum of the world’s four largest sovereign wealth funds.3 That would give Libra huge economic clout; its investment decisions could shake financial markets the world over, bringing sovereign borrowers to their knees or affording them reprieves. If, like the ECB, you think this sort of stuff is better left to banks, you may be reassured to hear that a bank entered stage right, just a few months before Facebook.

Chapter 23 Quote on Libra taken from: www.iosco.org/library/pubdocs/pdf/IOSCOPD650.pdf For the Bank of England discussion paper on CBDC, see: ‘Central Bank Digital Currency: Opportunities, challenges and design’, Discussion Paper, 12 March 2020 (www.bankofengland.co.uk/paper/2020/central-bank-digital-currency-opportunities-challenges-and-design-discussion-paper) For the ECB discussion paper on Libra, see: M. Adachi, M. Cominetta, C. Kaufmann and A. van der Kraaij (2020). ‘A regulatory and financial stability perspective on global tablecoins’, Macroprudential Bulletin, European Central Bank, vol. 10. Figures on large sovereign wealth funds taken from: www.swfinstitute.org/fund-rankings Jamie Dimon quotes on Bitcoin taken from: www.pymnts.com/blockchain/bitcoin/2018/jpmorgan-chase-jamie-dimon-dapper-labs-funding/ Chapter 24 For more on Che Guevara’s stint as Cuba’s central bank governor, see: https://sociable.co/web/fidel-castro-appointed-che-guevara-bank/ Chapter 25 Figures on global frequent flyer miles taken from: www.mckinsey.com/industries/travel-logistics-and-transport-infrastructure/our-insights/miles-ahead-how-to-improve-airline-customer-loyalty-programs# For Citibank and its New York ATM network, see: https://www.cgap.org/sites/default/files/Interoperability_in_Electronic_Payments.pdf For the EU investigations into Apple Pay and Qualcomm, see: https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1075; https://ec.europa.eu/commission/presscorner/detail/en/IP_18_421 George Soros delivered this remark at the World Economic Forum, Davos, Switzerland, 25 January 2018; see: www.georgesoros.com/2018/01/25/remarks-delivered-at-the-world-economic-forum/ Chapter 26 For US Executive Order banning eight apps, including Alipay and WeChat, see: https://www.federalregister.gov/documents/2021/01/08/2021-00305/addressing-the-threat-posed-by-applications-and-other-software-developed-or-controlled-by-chinese Carmen Balber, Washington Director for Consumer Watchdog, made the suggestion that the Federal Reserve Board consumer watchdog would be a lapdog (https://www.prnewswire.com/news-releases/dodd-proposal-to-give-the-federal-reserve-consumer-protection-authority-would-create-an-industry-lapdog-not-a-public-watchdog-85971237.html) For forensic analysis of the attack on Bangladesh Bank, see: www.reuters.com/article/us-usa-fed-bangladesh-investigation/exclusive-bangladesh-bank-remains-compromised-months-after-heist-forensics-report-idUSKCN0Y40SM Chapter 27 For comment on INSTEX, see: W.


pages: 598 words: 169,194

Bernie Madoff, the Wizard of Lies: Inside the Infamous $65 Billion Swindle by Diana B. Henriques

accounting loophole / creative accounting, airport security, Albert Einstein, AOL-Time Warner, banking crisis, Bear Stearns, Bernie Madoff, Black Monday: stock market crash in 1987, break the buck, British Empire, buy and hold, centralized clearinghouse, collapse of Lehman Brothers, computerized trading, corporate raider, diversified portfolio, Donald Trump, dumpster diving, Edward Thorp, financial deregulation, financial engineering, financial thriller, fixed income, forensic accounting, Gordon Gekko, index fund, locking in a profit, low interest rates, mail merge, merger arbitrage, messenger bag, money market fund, payment for order flow, plutocrats, Ponzi scheme, Potemkin village, proprietary trading, random walk, Renaissance Technologies, riskless arbitrage, Ronald Reagan, Savings and loan crisis, short selling, short squeeze, Small Order Execution System, source of truth, sovereign wealth fund, too big to fail, transaction costs, traveling salesman

What immediately became apparent was the astonishing geographical reach of Madoff’s crime, a perverse monument to two decades of financial globalization. The lists soon included Swiss private bankers, a Singapore insurance company, a Korean teachers pension fund, an Italian bank holding company, major Japanese banks and insurance companies, trust funds in Hong Kong, Dutch money managers, a sovereign wealth fund in Abu Dhabi, a French cosmetics heiress, minor royalty in England and Monaco, two Catholic schools on St Croix, hedge funds in Luxembourg, and wealthy families in Mexico, Brazil, Argentina, and Dubai. One legal consortium in Europe would later estimate that as many as three million people were touched by the scandal.

In reality, Madoff’s crime had far outstripped its original Jewish connections. Almost all of the hard cash wiped out by the fraud had poured in since Madoff’s cash crisis in late 2005, and it had come from hedge funds around the world, from aristocratic Europeans and shadowy Russians and sovereign wealth funds in the Persian Gulf. If those investors had heard of Bernie Madoff at all, they associated him with the rise of NASDAQ and the automation of Wall Street, not with the Jewish country clubs on Long Island and in Palm Beach or the board of trustees at Yeshiva University. But he had been a member of those Jewish country clubs, and hundreds of their members had lost decades of accumulated paper profits.

Modest family foundations in towns and cities all across America are scattered through the Madoff victim list, and each one of them made small, precious improvements in the lives of those they touched. Rich and possibly selfish hedge fund managers invested with Madoff—and he paid out their money as investment income for Hadassah, which dedicated it to charity and good works. Rich Arab sovereign wealth funds invested with Madoff—and he paid their money out as profits and management fees to Stanley Chais, who gave it away to educational institutions in Israel. Rich investors living lavishly gave money to Madoff—and he used it to make reassuring, steady payments to modest investors who consequently lived in greater comfort and died with greater dignity than they might have enjoyed otherwise.


The New Harvest: Agricultural Innovation in Africa by Calestous Juma

agricultural Revolution, Albert Einstein, barriers to entry, bioinformatics, business climate, carbon footprint, clean water, colonial rule, conceptual framework, creative destruction, CRISPR, double helix, electricity market, energy security, energy transition, export processing zone, global value chain, high-speed rail, impact investing, income per capita, industrial cluster, informal economy, Intergovernmental Panel on Climate Change (IPCC), Joseph Schumpeter, knowledge economy, land tenure, M-Pesa, microcredit, mobile money, non-tariff barriers, off grid, out of africa, precautionary principle, precision agriculture, Recombinant DNA, rolling blackouts, search costs, Second Machine Age, self-driving car, Silicon Valley, sovereign wealth fund, structural adjustment programs, supply-chain management, synthetic biology, systems thinking, total factor productivity, undersea cable

Banks have also increased lending to the agricultural sector, facilitated by NIRSAL, the risk-sharing facility of the Central Bank of Nigeria; a total of US$0.26 billion was lent to fertilizer and seed companies by banks between 2011 and 2014. A US$100 million fund for Agricultural Financing in 6 THE NEW HARVEST Nigeria (FAFIN) was launched for long-term, tailored financing. The fund is capitalized by the Ministry of Agriculture, the German Development Bank (KFW), and Nigeria’s Sovereign wealth fund. The latest release by the National Bureau of Statistics shows that the agricultural sector grew by 9.19% (year-on-year) in the third quarter of 2014, up by 2.7% points from the third quarter of 2013. The agricultural sector grew by 38.53% between the third and fourth quarters of 2014, with crop production being the main driver, with a growth of 43.5%.

See also specific countries migration, 17, 188, 240, 254, 256 Millennium Development Goals, 150 millet, 36, 164, 191–94 Mitsubishi, 137 mobile phones, xviii, 6, 48–52, 115, 134–35 Moi University, 175 Mombasa (Kenya), 121 Monsanto, 7, 65, 74 Morocco, 126, 230, 257 Mozambique: aluminum smelting in, 118; breadfruit trees in, 213; CAADP and, 28; economic growth in, 22; land tenure system in, 32; management training in, 194; national academy of science and technology in, 230; policies encouraging women’s participation in science in, 151; transgenic crop regulations in, 75 MTN Uganda, 50 Nairobi (Kenya), 121 Namibia, 24 316 Index NanoClear, 56 nanotechnology, xviii, 41, 54–56, 240, 257 national agricultural research institutes (NARIs) and, 172–73, 176–77 national agricultural research system (NARS), 85 National Export Promotion Council (NEPC), 93 National Innovation Council (India), 210, 230 National Innovation Foundation (NIF), 210 National Knowledge Commission (India), 240 National Science Foundation (NSF; United States), 235 National System for Agriculture Research and Innovation (SNPA, Brazil), 114 National Tropical Botanical Garden Breadfruit Institute, 212 National University of Singapore, 243 natural resources: Africa’s dependence on, 254; Africa’s endowment in, 22, 63–64; future and, 254–56; geographic information systems (GIS) and, 52; innovation systems and, 255–56; missions and objectives of RECs and, 220; Strategy for Africa 2024, 224 NEPAD (New Partnership for Africa’s Development), 27–28, 251 NERICA (New Rices for Africa), 4, 99–101 Nestlé Nigeria, 88 The Netherlands, 102 Netherlands Foundation for International Cooperation, 91 networks and networking: clusters and, 87, 96, 105; communication technology and, 49; education and, 147, 166; entrepreneurship and, 185–86, 190; infrastructure and, 118, 120–21, 124, 133, 136, 141, 144; innovation and, 84, 87, 224, 227, 230, 241, 252; regional policy and, 28; social networks and, 49, 105; trade and, 95; traditional communities and, 109 New Partnership for Africa's Development (NEPAD), 27–28, 251 New Rices for Africa (NERICA), 4, 99–101 New Vision for Agriculture Initiative (World Economic Forum), 28 New Zealand, 63, 67 niche crops, 23 Nietvoorbij Institute for Viticulture and Oenology (South Africa), 103 Niger, 36, 161 Nigeria: agricultural sector growth in, 6; Agricultural Transformation Agenda (ATA) in, 2–3, 5; anti-corruption efforts in, 3; aquaculture in, 24; Babban Gona agricultural franchise in, 214–16; biotechnology awareness survey in, 80; breadfruit trees in, 213; CAADP and, 28; cassava production in, 89, 198–201; Cassava Transformation Agenda in, 199; cocoa innovation system in, 92–94; economic-agricultural linkages in, 26; economic Index growth in, 22, 48; electronic wallet (e-wallet) system in, 3; entrepreneurship in, 4–5, 197–201, 203, 206–7, 214–16; fertilizer and, 3, 16; flash drying in, 89; hydropower in, 125; independent power projects (IPPs) in, 126; leadership in, 2, 6–7, 10, 198–99, 265; Maruca vitrata (insect) in, 71; national academy of science and technology in, 230; peanut pilot projects in, 161; pea production in, 71; Power Africa initiative in, 127; rice production in, 4; science scholarships for low income students in, 237; sovereign wealth fund in, 6; Staple Crop Processing Zones (SCPZ) in, 6–7; transgenic crops in, 65–66; unemployment in, 216; university-industry linkages (UILs) in, 87–89 Nile River, 130 Nile University, 238 North Africa. See Middle East and North Africa Norway, 9 nutrition: agribusiness and, 211; breadfruit and, 211–12; economic-agricultural linkages and, 14; food security and, 23; health care and, 23; innovation and, 10, 13, 26, 151; school gardens and, 158; transgenic crops and, 64, 67–69, 72–73, 78 Obama, Barack, 127 Obasanjo, Olusegun, 2, 198 OECD (Organization for Economic Cooperation and Development), 18 317 Office du Niger, 129 offices on science, innovation, technology, and engineering, 229–30 oil palm, 4–5, 236 oilseed, 45 One Acre Fund, 205–6 ONE Campaign, 29 OpenCourseware Consortium, 179 Optolab Card project, 56 Organization for Economic Cooperation and Development (OECD), 18 PADRO (Projet d’Appui au Développement Rural de l’Ouémé), 100–101 partnerships: clusters and, 106, 110–11, 113, 115–16; education and, 166, 173, 177, 179; entrepreneurship and, 193–95; infrastructure and, 132, 138, 143–44; innovation and, 110–11, 222–24, 232, 234, 242, 244; international, 33, 42, 106, 222; public-private, 7, 19, 27–30, 32, 110, 113, 115–16, 132, 166, 223 peanuts, 160–61, 164 Peru, 32, 180–82 pest control.


pages: 831 words: 98,409

SUPERHUBS: How the Financial Elite and Their Networks Rule Our World by Sandra Navidi

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Anthropocene, assortative mating, bank run, barriers to entry, Bear Stearns, Bernie Sanders, Black Swan, Blythe Masters, Bretton Woods, butterfly effect, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, commoditize, conceptual framework, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, digital divide, diversification, Dunbar number, East Village, eat what you kill, Elon Musk, eurozone crisis, fake it until you make it, family office, financial engineering, financial repression, Gini coefficient, glass ceiling, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Google bus, Gordon Gekko, haute cuisine, high net worth, hindsight bias, income inequality, index fund, intangible asset, Jaron Lanier, Jim Simons, John Meriwether, junk bonds, Kenneth Arrow, Kenneth Rogoff, Kevin Roose, knowledge economy, London Whale, Long Term Capital Management, longitudinal study, Mark Zuckerberg, mass immigration, McMansion, mittelstand, Money creation, money market fund, Myron Scholes, NetJets, Network effects, no-fly zone, offshore financial centre, old-boy network, Parag Khanna, Paul Samuelson, peer-to-peer, performance metric, Peter Thiel, plutocrats, Ponzi scheme, power law, public intellectual, quantitative easing, Renaissance Technologies, rent-seeking, reserve currency, risk tolerance, Robert Gordon, Robert Shiller, rolodex, Satyajit Das, search costs, shareholder value, Sheryl Sandberg, Silicon Valley, social intelligence, sovereign wealth fund, Stephen Hawking, Steve Jobs, subprime mortgage crisis, systems thinking, tech billionaire, The Future of Employment, The Predators' Ball, The Rise and Fall of American Growth, too big to fail, Tyler Cowen, women in the workforce, young professional

He dedicates much of his time to developing and maintaining relationships and spends half of the year flying around the world to visit clients. BlackRock’s financial links are ubiquitous. It controls trillions of dollars, more than most countries’ GDP and at times exceeding the Federal Reserve’s balance sheet. Through its management and advisory mandates, BlackRock is connected with most sovereign wealth funds, pension funds, central banks, endowments, and foundations. By the time of the financial crisis, BlackRock essentially had a monopoly on risk management and Fink had become known as “Mr. Fix-It.” Several governments retained BlackRock firm to help sort out the mess, and U.S. treasury secretary Geithner mandated it to analyze and sell $30 billion of risky mortgage securities.

As chairman of the JPMorgan Advisory Council, he has made himself available for corporate events and high-level client meetings, rendering advice on international matters for a reported $3 million a year. He was also on retainer for Petro Saudi, an oil company related to the Saudi royal family, for $66,000 a month plus an additional 2 percent of any deal resulting from his efforts, as well as to Zürich Insurance for $750,000 a year. Moreover, he has advised Abu Dhabi’s sovereign wealth fund, Kazakhstan’s President Nursultan Nazarbayev, and Paul Kagame, the president of Rwanda. He has had business dealings with China, Kuwait, Azerbaijan, Mongolia, Sierra Leone, Liberia, Mozambique, and East Timor. For a three-hour engagement, facilitating the $66 billion merger negotiations between Glencore, Xstrata, and the Qatari ruling family, he received $1 million.


pages: 326 words: 103,170

The Seventh Sense: Power, Fortune, and Survival in the Age of Networks by Joshua Cooper Ramo

air gap, Airbnb, Alan Greenspan, Albert Einstein, algorithmic trading, barriers to entry, Berlin Wall, bitcoin, Bletchley Park, British Empire, cloud computing, Computing Machinery and Intelligence, crowdsourcing, Danny Hillis, data science, deep learning, defense in depth, Deng Xiaoping, drone strike, Edward Snowden, Fairchild Semiconductor, Fall of the Berlin Wall, financial engineering, Firefox, Google Chrome, growth hacking, Herman Kahn, income inequality, information security, Isaac Newton, Jeff Bezos, job automation, Joi Ito, Laura Poitras, machine translation, market bubble, Menlo Park, Metcalfe’s law, Mitch Kapor, Morris worm, natural language processing, Neal Stephenson, Network effects, Nick Bostrom, Norbert Wiener, Oculus Rift, off-the-grid, packet switching, paperclip maximiser, Paul Graham, power law, price stability, quantitative easing, RAND corporation, reality distortion field, Recombinant DNA, recommendation engine, Republic of Letters, Richard Feynman, road to serfdom, Robert Metcalfe, Sand Hill Road, secular stagnation, self-driving car, Silicon Valley, Skype, Snapchat, Snow Crash, social web, sovereign wealth fund, Steve Jobs, Steve Wozniak, Stewart Brand, Stuxnet, superintelligent machines, systems thinking, technological singularity, The Coming Technological Singularity, The Wealth of Nations by Adam Smith, too big to fail, Vernor Vinge, zero day

Nearly any time the government had some new and difficult financial problem to manage, she would be shuffled into the nervous hands of some baffled minister or vice premier. She had, in her various activities, helped put the Chinese stock exchange on its feet, rebuilt bankrupt banks, and overseen the construction of China’s first sovereign wealth fund. Though only a few years older than I, her unique skills and absolute loyalty meant she had seen much of the development of China’s speed-train economy—part miracle, part near accident—from zero-distance range. As she and I were finishing dinner that evening, a door opened to a nearby private dining room.

Combine France’s sage-bureaucrats with her artful soldiers and you get the French imperial period. Marry Britain’s trading bankers with her martially inclined sailors, and the result is globe-spanning Victorian success. The merchants and soldiers and sages still operate today, of course. They sit in sovereign wealth funds, wired situation rooms, religious schools, and research labs. You could see American power, if you wanted, as a result of the fusion of the country’s financial and commercial castes with a powerful, experienced martial caste. But now, all around the globe, we’re seeing the emergence of what we might think of as a new caste, joining the merchants, soldiers, and sages.


pages: 340 words: 97,723

The Big Nine: How the Tech Titans and Their Thinking Machines Could Warp Humanity by Amy Webb

"Friedman doctrine" OR "shareholder theory", Ada Lovelace, AI winter, air gap, Airbnb, airport security, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, algorithmic bias, AlphaGo, Andy Rubin, artificial general intelligence, Asilomar, autonomous vehicles, backpropagation, Bayesian statistics, behavioural economics, Bernie Sanders, Big Tech, bioinformatics, Black Lives Matter, blockchain, Bretton Woods, business intelligence, Cambridge Analytica, Cass Sunstein, Charles Babbage, Claude Shannon: information theory, cloud computing, cognitive bias, complexity theory, computer vision, Computing Machinery and Intelligence, CRISPR, cross-border payments, crowdsourcing, cryptocurrency, Daniel Kahneman / Amos Tversky, data science, deep learning, DeepMind, Demis Hassabis, Deng Xiaoping, disinformation, distributed ledger, don't be evil, Donald Trump, Elon Musk, fail fast, fake news, Filter Bubble, Flynn Effect, Geoffrey Hinton, gig economy, Google Glasses, Grace Hopper, Gödel, Escher, Bach, Herman Kahn, high-speed rail, Inbox Zero, Internet of things, Jacques de Vaucanson, Jeff Bezos, Joan Didion, job automation, John von Neumann, knowledge worker, Lyft, machine translation, Mark Zuckerberg, Menlo Park, move fast and break things, Mustafa Suleyman, natural language processing, New Urbanism, Nick Bostrom, one-China policy, optical character recognition, packet switching, paperclip maximiser, pattern recognition, personalized medicine, RAND corporation, Ray Kurzweil, Recombinant DNA, ride hailing / ride sharing, Rodney Brooks, Rubik’s Cube, Salesforce, Sand Hill Road, Second Machine Age, self-driving car, seminal paper, SETI@home, side project, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart cities, South China Sea, sovereign wealth fund, speech recognition, Stephen Hawking, strong AI, superintelligent machines, surveillance capitalism, technological singularity, The Coming Technological Singularity, the long tail, theory of mind, Tim Cook: Apple, trade route, Turing machine, Turing test, uber lyft, Von Neumann architecture, Watson beat the top human players on Jeopardy!, zero day

China is quickly laying the groundwork to become the world’s unchallenged AI hegemon. In July 2017, the Chinese government unveiled its Next Generation Artificial Intelligence Development Plan to become the global leader in AI by the year 2030 with a domestic industry worth at least $150 billion,1 which involved devoting part of its sovereign wealth fund to new labs and startups, as well as new schools launching specifically to train China’s next generation of AI talent.2 In October of that same year, China’s President Xi Jinping explained his plans for AI and big data during a detailed speech to thousands of party officials. AI, he said, would help China transition into one of the most advanced economies in the world.

Together, they are part of a well-capitalized, highly organized state-level AI plan for the future, one in which the government wields tremendous control. This is China’s space race, and we are its Sputnik to their Apollo mission. We might have gotten to orbit first, but China has put its sovereign wealth fund, education system, citizens, and national pride on the line in its pursuit of AI. China’s AI tribes begin at universities, too, where there is even more focus on skills and commercial applications. Because China is interested in ramping up the country’s skilled workforce as quickly as possible, its diversity problems aren’t exactly analogous to the West, though they do exist.


pages: 391 words: 97,018

Better, Stronger, Faster: The Myth of American Decline . . . And the Rise of a New Economy by Daniel Gross

"World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, Airbnb, Alan Greenspan, American Society of Civil Engineers: Report Card, asset-backed security, Bakken shale, banking crisis, Bear Stearns, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, carbon tax, Carmen Reinhart, clean water, collapse of Lehman Brothers, collateralized debt obligation, commoditize, congestion pricing, creative destruction, credit crunch, currency manipulation / currency intervention, demand response, Donald Trump, financial engineering, Frederick Winslow Taylor, high net worth, high-speed rail, housing crisis, hydraulic fracturing, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, index fund, intangible asset, intermodal, inventory management, Kenneth Rogoff, labor-force participation, LNG terminal, low interest rates, low skilled workers, man camp, Mark Zuckerberg, Martin Wolf, Mary Meeker, Maui Hawaii, McMansion, money market fund, mortgage debt, Network effects, new economy, obamacare, oil shale / tar sands, oil shock, peak oil, plutocrats, price stability, quantitative easing, race to the bottom, reserve currency, reshoring, Richard Florida, rising living standards, risk tolerance, risk/return, scientific management, Silicon Valley, Silicon Valley startup, six sigma, Skype, sovereign wealth fund, Steve Jobs, superstar cities, the High Line, transit-oriented development, Wall-E, Yogi Berra, zero-sum game, Zipcar

Think of it as a state-level Fannie Mae, except without the huge executive salaries and lobbying budget.4 In September 2011 the Bank of North Dakota accepted a new deposit from a new customer: the state’s Legacy Fund. In the fall of 2010 the state’s voters easily approved a constitutional ballot initiative that created a sort of state-level sovereign wealth fund. Agricultural states suffer consistently from droughts and floods, and recognize that the weather may not always be favorable and that crop prices may not always be high. So it makes sense to set aside funds for lean years. The new legislation stipulates that each year 30 percent of the gusher of corporate oil and gas revenues is to be siphoned off into the Legacy Fund and locked away from lawmakers until 2017.

., 2, 82, 89, 91, 95, 144 Michigan, 15, 118–19, 135–36, 169, 174 Microsoft, 143, 160 middle class, 20, 25, 94, 127, 144 Middle East, 21, 203, 228 exports and, 108–9, 112–13, 123 inports and, 132, 145 Millennium Bulk Terminals, 103 Millward Brown, 143 Milner, Yuri, 84 Mittleider, John, 154 Moinian Organization, 94 monetary policy, 19, 30, 32 money market fund industry, 33–34 Moody’s, Moody’s Analytics, 1, 31, 190, 207 Morgan Stanley, 21–22, 37, 53, 74 mortgage-backed securities, 34–36 mortgage equity withdrawal (MEW), 54, 56 mortgages, 2, 12, 24, 156, 164, 212, 219, 225 efficient consumers and, 190–91 and Fannie Mae and Freddie Mac bailout, 42–43 refinancing of, 34–35, 54, 190 restructuring and, 45, 50, 53–55, 57–58 subprime, 16–18, 39, 82 timely policy decisions and, 30, 32, 34–36, 39, 42–43 Motion Picture Association of America, 128 Mountain Area Information Network (MAIN), 209–10 Mubadala Healthcare, 145 Murck, Christian, 166–67 Murphy, Roger, 169 MVP RV, 96–97 National Foundation for American Policy, 117 natural gas, 79, 86, 102 exports of, 105–6 in North Dakota, 151–53, 157 NBC/ Wall Street Journal poll, 3 NCR, 174–76, 178 Ness, Ron, 152 Nest Learning Thermostat, 195–96 Netherlands, 14, 81–82, 86, 198 networks, networking, 66, 71, 77, 96, 176, 197 supersizing and, 199, 201–4, 206–9, 211–13 New Deal, 14, 18 New England Smart Energy, 187–88 New Jersey, 50, 111, 211–12, 216, 225 New Jersey Nets, 85, 126 Newsweek, 3, 15–16, 19, 93, 229–30 New York, 8, 19, 26, 41, 47, 89, 108, 111, 141, 148, 154, 156, 172, 224–25, 228 efficiency economy and, 61, 68–72, 74 efficient consumers and, 192–93, 195 exports and, 118, 121–22, 125, 127 FDI and, 82, 84–85, 92–95 inports and, 144–46 restructuring and, 49–50 supersizing and, 204–6, 211–13 New York City marathon, 228 New Yorker, 183–84 New York Federal Reserve Bank, 32, 55–56 New York Stock Exchange, 7, 12–13, 48, 133 New York Times, 6, 9, 19, 72, 85, 100, 119, 141, 174, 178 Next Convergence, The (Spence), 100 Nike, 119, 140, 168–69 9/11, 18, 109, 118, 120–21, 145 Nishimura, Kiyohiko, 29–30 Nixon, Richard, 26, 218 Noah, Timothy, 199–200 Nooyi, Indra, 117–18 Normandy Real Estate Partners, 50 Norris, Floyd, 19 North Dakota, 148–63, 212 agriculture in, 149, 153–58, 162 demographics of, 149, 159–62 economic decline of, 149–50 education in, 153, 157–58, 160–62 efficiency economy and, 158–59 housing in, 150–52, 155–56, 158 oil in, 79, 148, 151–53, 157, 160, 162, 223 sovereign wealth fund of, 156–57 nuclear power, 7, 24, 74, 109 NUMMI, 79 Obama, Barack, 2, 77, 99, 205, 222 economic decline and, 3, 5–6, 10, 15 financial crisis and, 6, 12–13 restructuring and, 54–55 timely policy decisions and, 30, 33, 54–55 “Obama’s Radicalism Is Killing the Dow” (Boskin), 5 Odake, Shin, 93 offshoring, 83, 94, 98, 110, 133, 147, 164, 167–68, 171–73, 175 oil, 26, 100, 102, 165, 217 domestic production of, 79–80, 86, 148, 151–53, 157, 160, 162, 222–23 efficiency economy and, 75, 77, 79–80, 222–23 efficient consumers and, 188–89 FDI and, 86, 95 price of, 15, 75, 77, 153, 172, 188 On China (Kissinger), 127 O’Neill, Jim, 23 Organization for International Investment (OFII), 83, 95–97 output gap, 9 Outrageous Fortunes (Altman), 141 Outsourced, 171 outsourcing, 26, 62, 98, 169, 171–72, 175 Panama Canal, 208 Paris, 68, 109, 137, 144 Parish, Robert, 170–71 Paulson, Henry, 32–33 Peabody Coal, 103 pecans, 100 Peek, Jeff, 47 Peerless Industries, 178 Peisach, Alberto, 88–90 pensions, 91, 132, 181, 216 inports and, 136–37, 147 Pepsi, PepsiCo, 117, 133, 143 Petrobras, 95 Philadelphia, Pa., 65–66, 110 Philadelphia Federal Reserve Bank, 17 Plastic Omnium, 68 Plaza Hotel, 84 politics, politicians, 21–23, 25–26, 61, 148, 163, 167, 218–19, 221 crises and, 15, 29 economic decline and, 5–6 infrastructure and, 205, 211 and reshoring and insourcing, 175–76 timely policy decisions and, 28–31, 40, 43 pools, 185–87 Popper, Deborah Epstein and Frank J., 149–50 Porter’s Fabrication, 176 Poss, Jim, 64–65, 68 Post-American World, The (Zakaria), 19 Poughkeepsie-Highland Bridge, 225–26 poverty, 16, 19, 25, 100, 124, 141, 164, 225 Power, Thomas M., 103 power plants, 7, 72–74 Prague, 139–40, 144 Pratt & Whitney, 108 Principles of Economics (Mankiw), 193 procyclicality, 45, 58, 72–73 production, productivity, 81, 96–103, 215 in agriculture, 100–101, 122 efficiency economy and, 60, 62–63, 65, 73, 78–80, 107, 223–24 efficient consumers and, 181–82, 184, 189, 195 employment and, 163–64, 166–69 exports and, 98–101, 103, 105–7, 109–13, 115–16, 122–23, 131, 226 FDI and, 86–87, 89–90, 96–97 inports and, 131–32, 134–37, 140–43 North Dakota and, 150, 153–54, 157, 159 and reshoring and insourcing, 169–73, 175–79 supersizing and, 199–202, 206–8, 210 U.S. economic importance and, 227–28 profits, profit, 16, 81, 198, 204, 215, 225 efficiency economy and, 62, 65, 76, 78 efficient consumers and, 183, 193–94 exports and, 104, 128–29 inports and, 133, 136, 140, 146–47 restructuring and, 44, 52–53, 58 timely policy decisions and, 33–36, 38–39 Prokhorov, Mikhail, 85 propane, 185–86 Pulaski County, Va., 88–91 Pulpy, 138 Qatar, 108, 145 quantitative easing (QE), 30, 34, 57 railroads, 110, 200, 224–25 FDI and, 13, 81–82, 90, 95 supersizing and, 206, 208–9, 211–12 Ratner, Bruce, 85 Rawlings, 169–70 real estate, 89, 105, 167, 171, 204, 226 efficiency economy and, 68–74, 80 FDI and, 83–85, 92–94, 96 in Japan, 8, 30 restructuring and, 45, 49–51 supersizing and, 212–13 see also houses, housing RealtyTrac, 55 recessions, 9, 13, 23, 26, 180, 221 see also Great Recession recoveries, 4, 9, 17–19, 21, 26, 28, 57, 60, 75, 99, 162, 180, 199, 218, 225 economic pessimism and, 22–23 restructuring and, 45, 51, 80 slowness of, 17–18 strengthening of, 215–17 recycled paper, 107 reengineering, 61–62, 69–70, 113 Regional Plan Association, 211 Regions Financial, 38 regulations, regulation, 2, 10, 16, 19, 25, 29, 52–53, 102, 212 Reid, T.


pages: 311 words: 99,699

Fool's Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe by Gillian Tett

"World Economic Forum" Davos, accounting loophole / creative accounting, Alan Greenspan, asset-backed security, bank run, banking crisis, Bear Stearns, Black-Scholes formula, Blythe Masters, book value, break the buck, Bretton Woods, business climate, business cycle, buy and hold, collateralized debt obligation, commoditize, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, easy for humans, difficult for computers, financial engineering, financial innovation, fixed income, Glass-Steagall Act, housing crisis, interest rate derivative, interest rate swap, inverted yield curve, junk bonds, Kickstarter, locking in a profit, Long Term Capital Management, low interest rates, McMansion, Michael Milken, money market fund, mortgage debt, North Sea oil, Northern Rock, Plato's cave, proprietary trading, Renaissance Technologies, risk free rate, risk tolerance, Robert Shiller, Satyajit Das, Savings and loan crisis, short selling, sovereign wealth fund, statistical model, tail risk, The Great Moderation, too big to fail, value at risk, yield curve

The debates about the superfund and the Northern Rock fiasco left no doubt that the UK and US governments hated the idea of using taxpayer funds to recapitalize the banks, and there seemed to be little chance of persuading Western investors to recapitalize the banks. In mounting desperation, some bankers looked east for help. During the first seven years of the decade, China, Singapore, Korea, and the oil-rich countries of the Middle East had all built up large so-called sovereign wealth funds, huge investment funds dedicated to managing pools of government money. By 2007, such funds were estimated to control over $3 trillion of assets, though the precise tally was unknown because the funds were highly secretive. Traditionally, much of their cash had been invested in US Treasury bonds and other safe assets.

However, as the panic intensified on Wall Street and in the City of London, bankers laid aside that concern, and senior deal makers from Wall Street, London, and Zurich hopped onto planes in a frantic effort to persuade Asian and Middle Eastern funds to help. Citi was the first to clinch a deal. In late November, the Abu Dhabi Investment Fund, the world’s biggest sovereign wealth fund, announced plans to inject $7.5 billion into the bank. Soon after, UBS raised $11 billion from the GIC fund of Singapore and Middle Eastern investors. Then Merrill Lynch raised $5 billion from a Chinese government fund, while Morgan Stanley garnered a similar sum from Singapore. It was an extraordinary turn of fortune.


pages: 371 words: 98,534

Red Flags: Why Xi's China Is in Jeopardy by George Magnus

"World Economic Forum" Davos, 3D printing, 9 dash line, Admiral Zheng, AlphaGo, Asian financial crisis, autonomous vehicles, balance sheet recession, banking crisis, Bear Stearns, Bretton Woods, Brexit referendum, BRICs, British Empire, business process, capital controls, carbon footprint, Carmen Reinhart, cloud computing, colonial exploitation, corporate governance, crony capitalism, currency manipulation / currency intervention, currency peg, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, financial deregulation, financial innovation, financial repression, fixed income, floating exchange rates, full employment, general purpose technology, Gini coefficient, global reserve currency, Great Leap Forward, high net worth, high-speed rail, hiring and firing, Hyman Minsky, income inequality, industrial robot, information security, Internet of things, invention of movable type, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, labour mobility, land reform, Malacca Straits, means of production, megacity, megaproject, middle-income trap, Minsky moment, money market fund, moral hazard, non-tariff barriers, Northern Rock, offshore financial centre, old age dependency ratio, open economy, peer-to-peer lending, pension reform, price mechanism, purchasing power parity, regulatory arbitrage, rent-seeking, reserve currency, rising living standards, risk tolerance, Shenzhen special economic zone , smart cities, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, speech recognition, The Wealth of Nations by Adam Smith, total factor productivity, trade route, urban planning, vertical integration, Washington Consensus, women in the workforce, working-age population, zero-sum game

After a week, the Securities Regulatory Commission prevented shareholders with stakes above 5 per cent from selling for a period of six months, and ordered executives and board members of companies who had sold shares in the prior six months to buy them back. The China Insurance Regulatory Commission announced that insurance companies would be allowed to increase the proportion of stocks in their assets from 30 to 40 per cent. An investment arm of China Investment Corporation, China’s sovereign wealth fund, announced it would buy exchange-traded funds, and the China Securities Finance Corporation injected RMB 200 billion ($31 billion) into five mutual funds so as to be able to buy more shares. Even after this tsunami of regulatory interventions, the market did not really calm down until after over a third of Shanghai-listed firms, accounting for a half of all Chinese shares on all exchanges, halted trading.

About 20 per cent of financing has come from the so-called policy banks, including China Development Bank, and Export Import Bank of China. The rest comes from the Silk Road Fund, launched by the government in 2014 with initial funding of $40 billion and backed by the China Investment Corporation, China’s sovereign wealth fund, and the State Administration for Foreign Exchange. The Asian Infrastructure Investment Bank is also a supplier of financing but in 2017 its outstanding loans disbursed to BRI countries were around $2 billion. 9. David Dollar, ‘Yes, China is Investing Globally – But Not So Much in Its Belt And Road Initiative’, Brookings, 8 May 2017, <https://www.brookings.edu/blog/order-from-chaos/2017/05/08/yes-china-is-investing-globally-but-not-so-much-in-its-belt-and-road-initiative/>. 10.


pages: 303 words: 100,516

Billion Dollar Loser: The Epic Rise and Spectacular Fall of Adam Neumann and WeWork by Reeves Wiedeman

Adam Neumann (WeWork), Airbnb, asset light, barriers to entry, Black Lives Matter, Blitzscaling, Burning Man, call centre, carbon footprint, company town, coronavirus, corporate governance, COVID-19, cryptocurrency, digital nomad, do what you love, Donald Trump, driverless car, dumpster diving, East Village, eat what you kill, Elon Musk, Erlich Bachman, fake news, fear of failure, Gavin Belson, Gordon Gekko, housing crisis, index fund, Jeff Bezos, low interest rates, Lyft, Marc Benioff, margin call, Mark Zuckerberg, Masayoshi Son, Maui Hawaii, medical residency, Menlo Park, microapartment, mortgage debt, Network effects, new economy, prosperity theology / prosperity gospel / gospel of success, reality distortion field, ride hailing / ride sharing, Salesforce, Sand Hill Road, sharing economy, Sheryl Sandberg, Silicon Valley, Silicon Valley startup, Skype, Snapchat, SoftBank, software as a service, sovereign wealth fund, starchitect, stealth mode startup, Steve Jobs, Steve Wozniak, subscription business, TechCrunch disrupt, the High Line, Tim Cook: Apple, too big to fail, Travis Kalanick, Uber for X, uber lyft, Vision Fund, WeWork, zero-sum game

They had come to Masa, and the Vision Fund, to diversify their economy into knowledge-based industries that would define the future, not to invest in real estate. As Fortitude was being hashed out, it didn’t help matters when Adam showed up late to a meeting at the St. Regis hotel in Manhattan with Khaldoon Khalifa Al Mubarak, the head of Abu Dhabi’s sovereign wealth fund. Vanity Fair reported that Adam wore sunglasses and looked as if he was hungover. * * * ADAM REMAINED CONFIDENT in Fortitude, and in Masa. Adam’s deputies had come to believe that Masa served as a father figure for Adam, whose own dad had not been around for much of his childhood. Adam described the connection with Masa as a “special realationship,” and Masa proudly told Adam that “the last person I felt this with was Jack Ma,” the Alibaba founder.

Adam went so far as to make a trip to Washington, DC, to press the company’s case. While WeWork’s lawyers did battle with the SEC, Adam got back on the road, driving to a private airport outside New York after his town hall for a midnight flight to London Stansted. He landed just before dawn for a meeting with Yasir Al-Rumayyan, the head of Saudi Arabia’s sovereign-wealth fund. Saudi Arabia’s skepticism of Adam and WeWork had only increased since its decision not to back Fortitude, and Al-Rumayyan declined to commit to buying a chunk of the IPO. Hat in hand, Neumann flew back to New York that night, then on to Boston and Toronto for meetings with more investors.


pages: 352 words: 98,561

The City by Tony Norfield

accounting loophole / creative accounting, air traffic controllers' union, anti-communist, Asian financial crisis, asset-backed security, bank run, banks create money, Basel III, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, capital controls, central bank independence, colonial exploitation, colonial rule, continuation of politics by other means, currency risk, dark matter, Edward Snowden, Fall of the Berlin Wall, financial innovation, financial intermediation, foreign exchange controls, Francis Fukuyama: the end of history, G4S, global value chain, Goldman Sachs: Vampire Squid, interest rate derivative, interest rate swap, Irish property bubble, Leo Hollis, linked data, London Interbank Offered Rate, London Whale, Londongrad, low interest rates, Mark Zuckerberg, Martin Wolf, means of production, Money creation, money market fund, mortgage debt, North Sea oil, Northern Rock, Occupy movement, offshore financial centre, plutocrats, purchasing power parity, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, Ronald Reagan, seigniorage, Sharpe ratio, sovereign wealth fund, Suez crisis 1956, The Great Moderation, transaction costs, transfer pricing, zero-sum game

In 2012, the country’s finance and insurance sector made up 11.9 per cent of GDP.41 Most of Singapore’s financial services export revenues derive from banking, including foreign exchange and derivatives turnover, but its official statistics give few details. A notable moment in Singapore’s financial development occurred when its government set up ‘sovereign wealth funds’ to manage national financial resources: Temasek in 1974 and GIC in 1981. Temasek holds both Singapore-based and foreign investment assets, while GIC mainly manages Singapore’s foreign exchange reserves and invests in foreign financial securities. They invest in property assets, industrial and commercial corporations’ shares, bonds and currencies.

Notably, in the wake of Russia’s incursion into Crimea at the end of February 2014, a UK government policy briefing made it clear that it would seek to exempt the City of London from any EU or US sanctions against Russia: Britain should not ‘close London’s financial centre to Russians’.11 The value of the economic, political and social connections between the UK and foreign financiers was also indicated by the £7bn-plus crisis-related injection of capital into Barclays Bank from Abu Dhabi and Qatar’s sovereign wealth funds in October 2008.12 Economics and domestic politics Apart from possible taxes or similar curbs on financial activity, there are other economic and political developments that could undermine the economics of British imperialism. On the economic side there is the rising level of UK foreign indebtedness, driven mainly by its current account deficit, and the inability of British capital to finance many investment projects, so that it relies upon inflows of foreign money.


Saudi America: The Truth About Fracking and How It's Changing the World by Bethany McLean

addicted to oil, Alan Greenspan, American energy revolution, Asian financial crisis, Bear Stearns, buy and hold, carbon tax, Carl Icahn, corporate governance, delayed gratification, Donald Trump, family office, geopolitical risk, hydraulic fracturing, Jeff Bezos, junk bonds, low interest rates, Mark Zuckerberg, Masdar, Michael Milken, oil shale / tar sands, peak oil, Silicon Valley, sovereign wealth fund, Upton Sinclair, Yom Kippur War

In the fall of 2017, the New York Times wrote that Russia is “increasingly wielding oil as a geopolitical tool, spreading its influence around the world and challenging the interests of the United States.” Among other things, Russia has cut oil deals in the Middle East with Iraq and Libya, and, in late 2016, the Kremlin allowed Qatar’s sovereign wealth fund to buy a stake in Rosneft. Russia has also stepped into China’s shoes as the chief financial backer of Venezuela. Over the course of the past three years, the Times calculated that Russia and Rosneft have provided Caracas with $10 billion in financial assistance, and have helped Venezuela avoid default on its debts at least twice.


pages: 430 words: 109,064

13 Bankers: The Wall Street Takeover and the Next Financial Meltdown by Simon Johnson, James Kwak

Alan Greenspan, American ideology, Andrei Shleifer, Asian financial crisis, asset-backed security, bank run, banking crisis, Bear Stearns, Bernie Madoff, Black Monday: stock market crash in 1987, Bonfire of the Vanities, bonus culture, book value, break the buck, business cycle, business logic, buy and hold, capital controls, Carmen Reinhart, central bank independence, Charles Lindbergh, collapse of Lehman Brothers, collateralized debt obligation, commoditize, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency risk, Edward Glaeser, Eugene Fama: efficient market hypothesis, financial deregulation, financial engineering, financial innovation, financial intermediation, financial repression, fixed income, George Akerlof, Glass-Steagall Act, Gordon Gekko, greed is good, Greenspan put, Home mortgage interest deduction, Hyman Minsky, income per capita, information asymmetry, interest rate derivative, interest rate swap, junk bonds, Kenneth Rogoff, laissez-faire capitalism, late fees, light touch regulation, Long Term Capital Management, low interest rates, market bubble, market fundamentalism, Martin Wolf, Michael Milken, money market fund, moral hazard, mortgage tax deduction, Myron Scholes, Paul Samuelson, Ponzi scheme, price stability, profit maximization, proprietary trading, race to the bottom, regulatory arbitrage, rent-seeking, Robert Bork, Robert Shiller, Ronald Reagan, Saturday Night Live, Satyajit Das, Savings and loan crisis, sovereign wealth fund, Tax Reform Act of 1986, The Myth of the Rational Market, too big to fail, transaction costs, Tyler Cowen, value at risk, yield curve

Most likely the banks realized that using their own money to bail out their own SIVs—or, as some suspected, pooling the money of many banks to bail out Citigroup’s SIVs—did not represent a real solution. The failure of the MLEC implied that the major banks might be facing more than a simple liquidity crisis and might need more capital. At this point, sovereign wealth funds (investment funds owned by other countries) were still willing to supply that capital. Between October 2007 and January 2008, CITIC (China) committed to invest in Bear Stearns, the Abu Dhabi Investment Authority and the Government of Singapore Investment Group invested in Citigroup, China Investment Corporation invested in Morgan Stanley, and Temasek (Singapore), the Korean Investment Corporation, and the Kuwait Investment Authority invested in Merrill Lynch.12 But the next time banks needed capital, it would be much harder to find.

On the idea that Chinese oversaving (caused by an artificially high currency) caused the crisis, see Sebastian Mallaby, “What OPEC Teaches China,” The Washington Post, January 25, 2009, available at http://www.washingtonpost.com/wp-dyn/content/article/2009/01/23/AR2009012303291.html. 12. Sameera Anand, “Citic’s Close Call with Bear Stearns,” Business Week, March 19, 2008, available at http://www.businessweek.com/globalbiz/ content/mar2008/gb20080319_886607.htm. CITIC is technically a conglomerate owned by the Chinese government, not a sovereign wealth fund. CITIC was able to back out of its deal with Bear Stearns. 13. For more on the fall of Bear Stearns, see Kate Kelly, Street Fighters: The Last 72 Hours of Bear Stearns, the Toughest Firm on Wall Street (New York: Portfolio, 2009); and William D. Cohan, House of Cards: A Tale of Hubris and Wretched Excess on Wall Street (New York: Doubleday, 2009). 14.


pages: 419 words: 109,241

A World Without Work: Technology, Automation, and How We Should Respond by Daniel Susskind

"World Economic Forum" Davos, 3D printing, agricultural Revolution, AI winter, Airbnb, Albert Einstein, algorithmic trading, AlphaGo, artificial general intelligence, autonomous vehicles, basic income, Bertrand Russell: In Praise of Idleness, Big Tech, blue-collar work, Boston Dynamics, British Empire, Capital in the Twenty-First Century by Thomas Piketty, cloud computing, computer age, computer vision, computerized trading, creative destruction, David Graeber, David Ricardo: comparative advantage, deep learning, DeepMind, Demis Hassabis, demographic transition, deskilling, disruptive innovation, Donald Trump, Douglas Hofstadter, driverless car, drone strike, Edward Glaeser, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, fake news, financial innovation, flying shuttle, Ford Model T, fulfillment center, future of work, gig economy, Gini coefficient, Google Glasses, Gödel, Escher, Bach, Hans Moravec, income inequality, income per capita, industrial robot, interchangeable parts, invisible hand, Isaac Newton, Jacques de Vaucanson, James Hargreaves, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joi Ito, Joseph Schumpeter, Kenneth Arrow, Kevin Roose, Khan Academy, Kickstarter, Larry Ellison, low skilled workers, lump of labour, machine translation, Marc Andreessen, Mark Zuckerberg, means of production, Metcalfe’s law, natural language processing, Neil Armstrong, Network effects, Nick Bostrom, Occupy movement, offshore financial centre, Paul Samuelson, Peter Thiel, pink-collar, precariat, purchasing power parity, Ray Kurzweil, ride hailing / ride sharing, road to serfdom, Robert Gordon, Sam Altman, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Snapchat, social intelligence, software is eating the world, sovereign wealth fund, spinning jenny, Stephen Hawking, Steve Jobs, strong AI, tacit knowledge, technological solutionism, TED Talk, telemarketer, The Future of Employment, The Rise and Fall of American Growth, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, Travis Kalanick, Turing test, Two Sigma, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, upwardly mobile, warehouse robotics, Watson beat the top human players on Jeopardy!, We are the 99%, wealth creators, working poor, working-age population, Y Combinator

In the United States, for instance, reflecting the inequalities we saw earlier in the book, almost everyone in the top 10 percent of earners own stocks, but only about a third of the people in the bottom 50 percent of earners do.59 One possibility, then, is that a capital-sharing state might acquire a stake on behalf of those without one, pooling their investments into a fund on behalf of its citizens—a Citizens’ Wealth Fund. There is a precedent for this. Today’s sovereign wealth funds, large pools of state-owned wealth that are put into a spread of assorted investments, perform a similar role. The world’s largest such fund, worth over $1 trillion, is owned by Norway. After Norway started developing its oil reserves, rather than spend all the profits right away, the government set up a fund “on behalf of the Norwegian people.”60 Since the country has a population of about 5.2 million, each citizen effectively has a stake worth about $190,000.

See also Soviet Union Saez, Emmanuel Sam100 (bricklaying robot) Sandel, Michael sat-nav systems Schloss, David Schmidt, Eric Schumpeter, Joseph Searle, John secondary education security Sedol, Lee self-regulation self-service culture service sector sexuality Shannon, Claude signaling Silicon Valley Simon, Herbert singularity Siri skepticism skill skill-biased work story skill premium skills mismatch skin cancer detection Smith, Adam SNAP. See Supplemental Nutrition Assistance Program social credit system Social Insurance and Allied Services (Beveridge) social intelligence socialist states social justice social media. See also specific companies social robotics social safety nets Socratic software South Korea sovereign wealth funds Soviet Union. See also Russia Sparta Spence, Michael spinning jenny Spotify Standard Oil Company state. See Big State; government state bonus status steam engine Stiglitz, Joseph stock plans structural technological unemployment complementing force weakening and lump of labor fallacy and overview of remaining tasks and superiority assumption and timing of world with less work and substituting force ALM hypothesis and complementing force and defined education and frictional technological unemployment and misplaced anxiety and strengthening of task encroachment and Summers, Larry superintelligence superiority assumption supermanagers superstar firms Supplemental Nutrition Assistance Program (SNAP) supply, price and Supreme Court decision prediction Susskind, Jamie Susskind, Richard Suzman, James synthetic media tacit knowledge Tantalus task complexity task encroachment affective capabilities and cognitive capabilities and manual capabilities and overview of regional differences in skepticism and weakening complementing force and tasks, jobs vs.


pages: 363 words: 109,077

The Raging 2020s: Companies, Countries, People - and the Fight for Our Future by Alec Ross

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, Affordable Care Act / Obamacare, air gap, air traffic controllers' union, Airbnb, Albert Einstein, An Inconvenient Truth, autonomous vehicles, barriers to entry, benefit corporation, Bernie Sanders, Big Tech, big-box store, British Empire, call centre, capital controls, clean water, collective bargaining, computer vision, coronavirus, corporate governance, corporate raider, COVID-19, deep learning, Deng Xiaoping, Didi Chuxing, disinformation, Dissolution of the Soviet Union, Donald Trump, Double Irish / Dutch Sandwich, drone strike, dumpster diving, employer provided health coverage, Francis Fukuyama: the end of history, future of work, general purpose technology, gig economy, Gini coefficient, global supply chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, high-speed rail, hiring and firing, income inequality, independent contractor, information security, intangible asset, invisible hand, Jeff Bezos, knowledge worker, late capitalism, low skilled workers, Lyft, Marc Andreessen, Marc Benioff, mass immigration, megacity, military-industrial complex, minimum wage unemployment, mittelstand, mortgage tax deduction, natural language processing, Oculus Rift, off-the-grid, offshore financial centre, open economy, OpenAI, Parag Khanna, Paris climate accords, profit motive, race to the bottom, RAND corporation, ride hailing / ride sharing, Robert Bork, rolodex, Ronald Reagan, Salesforce, self-driving car, shareholder value, side hustle, side project, Silicon Valley, smart cities, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, sparse data, special economic zone, Steven Levy, stock buybacks, strikebreaker, TaskRabbit, tech bro, tech worker, transcontinental railway, transfer pricing, Travis Kalanick, trickle-down economics, Uber and Lyft, uber lyft, union organizing, Upton Sinclair, vertical integration, working poor

Though the exact figure is impossible to know, researchers estimate some $4.7 billion was smuggled out of Angola during the last decade of its civil war. Dos Santos emerged victorious from the civil war and held on to the presidency until 2017. All the while, he and his family used Angola as their personal piggy bank. José Filomeno dos Santos, the president’s son, served as the head of Angola’s sovereign wealth fund from 2013 to 2017. He was later accused of siphoning more than $500 million out of the fund during his tenure. In 2020, Isabel dos Santos, the president’s daughter, was charged with embezzling some $57 million from the state-run oil company she once directed. She is also wrapped up in a scandal involving Angola’s state-sponsored diamond producer, Sodiam.

The two companies entered “a massive war,” with each pouring billions of dollars into discounts and incentives to attract new drivers. By 2016, Uber China had expanded to sixty cities, but Didi had set up operations in some four hundred. Both companies were burning through capital, but Didi had deeper pockets. The company received billions of dollars from China’s sovereign wealth fund and state-controlled banks. At one point, the Chinese tech giant Tencent blocked Uber on its massively popular app WeChat, but Didi remained embedded in the platform. In July 2016, the Chinese government issued regulations that prohibited driver subsidies that both Didi and Uber were using to expand their business, effectively freezing their existing market share.


pages: 338 words: 104,815

Nobody's Fool: Why We Get Taken in and What We Can Do About It by Daniel Simons, Christopher Chabris

Abraham Wald, Airbnb, artificial general intelligence, Bernie Madoff, bitcoin, Bitcoin "FTX", blockchain, Boston Dynamics, butterfly effect, call centre, Carmen Reinhart, Cass Sunstein, ChatGPT, Checklist Manifesto, choice architecture, computer vision, contact tracing, coronavirus, COVID-19, cryptocurrency, DALL-E, data science, disinformation, Donald Trump, Elon Musk, en.wikipedia.org, fake news, false flag, financial thriller, forensic accounting, framing effect, George Akerlof, global pandemic, index fund, information asymmetry, information security, Internet Archive, Jeffrey Epstein, Jim Simons, John von Neumann, Keith Raniere, Kenneth Rogoff, London Whale, lone genius, longitudinal study, loss aversion, Mark Zuckerberg, meta-analysis, moral panic, multilevel marketing, Nelson Mandela, pattern recognition, Pershing Square Capital Management, pets.com, placebo effect, Ponzi scheme, power law, publication bias, randomized controlled trial, replication crisis, risk tolerance, Robert Shiller, Ronald Reagan, Rubik’s Cube, Sam Bankman-Fried, Satoshi Nakamoto, Saturday Night Live, Sharpe ratio, short selling, side hustle, Silicon Valley, Silicon Valley startup, Skype, smart transportation, sovereign wealth fund, statistical model, stem cell, Steve Jobs, sunk-cost fallacy, survivorship bias, systematic bias, TED Talk, transcontinental railway, WikiLeaks, Y2K

In his essential analysis of business fraud, Lying for Money, Dan Davies describes the “same-name scam” as a long-standing type of con that was used by the New England Mafia in the mid-twentieth century. They established credit for fraudulent firms by naming them similarly to legitimate ones. Or consider the example of Jho Low, a Malaysian businessman who allegedly plundered billions of dollars via the 1Malaysia Development Berhad sovereign wealth fund he helped to establish. Like the perpetrators of most complex and lengthy frauds, Low at one point or another tapped virtually all the psychological habits and hooks that we describe in this book. He adopted a variant of the same-name scam by creating entities with names similar to those of famous or established companies.

Most bankers would have been suspicious of a huge international transfer to a personal bank account, but they didn’t ask enough questions when permitting a transfer to Low’s fake “Blackstone.” In 2014, Low had an associate open a bank account in Singapore in the name of “Aabar,” not coincidentally part of the name of Abu Dhabi sovereign wealth fund Aabar Investments, for the purpose of stealing over $100 million.12 Chris and some college friends tried a sort of familiarity gambit when they attempted to start a technology business in the mid-1980s. In the era before Silicon Valley startups founded by teenagers routinely went on to billion-dollar valuations, a company run by a bunch of nineteen-year-olds lacked credibility.


pages: 383 words: 105,387

The Power of Geography: Ten Maps That Reveal the Future of Our World by Tim Marshall

Apollo 11, Ayatollah Khomeini, Boris Johnson, Brexit referendum, British Empire, carbon footprint, centre right, clean water, coronavirus, COVID-19, David Sedaris, disinformation, Donald Trump, drone strike, Elon Musk, European colonialism, failed state, glass ceiling, global pandemic, Great Leap Forward, Jeff Bezos, Johannes Kepler, low earth orbit, Malacca Straits, means of production, megaproject, Mikhail Gorbachev, mutually assured destruction, Neil Armstrong, new economy, New Urbanism, Ronald Reagan, Silicon Valley, South China Sea, sovereign wealth fund, space junk, Strategic Defense Initiative, Suez canal 1869, Suez crisis 1956, trade route, uranium enrichment, urban planning, women in the workforce

In this context it makes sense to try to purge the state of corruption, even if it is window-dressing for removing rivals and putting some serious money back into the government’s coffers. It also requires a long-term plan – one called Vision 2030. Vision 2030 accepts that the economy must be diversified, with the focus on technology and the service sectors. Budget projections for the next few years envisage a steady draining of foreign reserves and the sovereign wealth fund. The state pays for an exceptionally generous welfare system. Rapidly declining income from oil and gas means that this is unsustainable; but without welfare, and with high unemployment, unrest is all but certain. To bolster the coffers during the change the government is prepared to sell off about 5 per cent of the family jewels – Saudi Aramco.

Oil paid for the subsidies, but if there’s little water left to subsidize, then there are no cheap crops and no foreign market. Instead there would be a lot of Saudis grumbling about rising food prices. The government intends to severely reduce the amount of wheat grown as it is a water-intensive crop, and instead some of the sovereign wealth fund is going towards buying land and growing produce in other countries. Because of these subsidies to the public, the more power they consume, the more it costs the government. To escape this spiral it is ploughing money into renewable energy. Diversification has begun. For example, Saudi Arabia owns 5 per cent of Tesla, and has invested heavily in General Motors’ push towards electric cars, as well as dozens of other projects around the world.


pages: 397 words: 112,034

What's Next?: Unconventional Wisdom on the Future of the World Economy by David Hale, Lyric Hughes Hale

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, Berlin Wall, biodiversity loss, Black Swan, Bretton Woods, business cycle, capital controls, carbon credits, carbon tax, Cass Sunstein, central bank independence, classic study, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, debt deflation, declining real wages, deindustrialization, diversification, energy security, Erik Brynjolfsson, Fall of the Berlin Wall, financial engineering, financial innovation, floating exchange rates, foreign exchange controls, full employment, Gini coefficient, Glass-Steagall Act, global macro, global reserve currency, global village, high net worth, high-speed rail, Home mortgage interest deduction, housing crisis, index fund, inflation targeting, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), inverted yield curve, invisible hand, Just-in-time delivery, Kenneth Rogoff, Long Term Capital Management, low interest rates, Mahatma Gandhi, Martin Wolf, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, military-industrial complex, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage tax deduction, Network effects, new economy, Nicholas Carr, oil shale / tar sands, oil shock, open economy, passive investing, payday loans, peak oil, Ponzi scheme, post-oil, precautionary principle, price stability, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, risk/return, Robert Shiller, Ronald Reagan, Savings and loan crisis, sovereign wealth fund, special drawing rights, subprime mortgage crisis, technology bubble, The Great Moderation, Thomas Kuhn: the structure of scientific revolutions, Tobin tax, too big to fail, total factor productivity, trade liberalization, Tragedy of the Commons, Washington Consensus, Westphalian system, WikiLeaks, women in the workforce, yield curve

In the survey, UBS asked central bankers what the most important reserve asset would be in the future. Half of the officials said the US dollar would be, but 22 percent said gold. Bullion ranked well above the European currency and Asian currencies. UBS surveyed more than eighty central bank reserve managers, sovereign wealth funds, and multilateral institutions with over $8 billion of assets at its annual seminar for sovereign institutions. In the run-up to the G-20 summit in Korea in November 2010, World Bank President Robert Zoellick suggested that the world should move toward a multi-polar currency system with some form of anchor in gold.

China announced in 2009 that it had increased its gold reserves from a long-standing figure of 600 tonnes to 1,054 tonnes. Some government officials have called on the central bank to increase its gold holdings to 10,000 tonnes by 2020. In early 2010 China Investment Corporation, Beijing’s newest sovereign wealth fund, revealed a $155 million investment in the SPDR gold trust—an ETF. As China has over $2.3 trillion of foreign exchange reserves, it could expand its gold holdings three or four times, and they would still represent less than 10 percent of total reserves. The same is true of other Asian nations.


pages: 364 words: 112,681

Moneyland: Why Thieves and Crooks Now Rule the World and How to Take It Back by Oliver Bullough

Alan Greenspan, banking crisis, Bernie Madoff, bitcoin, blood diamond, Bretton Woods, Brexit referendum, BRICs, British Empire, capital controls, central bank independence, corporate governance, cryptocurrency, cuban missile crisis, dark matter, diversification, Donald Trump, energy security, failed state, financial engineering, Flash crash, Francis Fukuyama: the end of history, full employment, Global Witness, high net worth, if you see hoof prints, think horses—not zebras, income inequality, joint-stock company, land bank, liberal capitalism, liberal world order, mass immigration, medical malpractice, Navinder Sarao, offshore financial centre, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, rent-seeking, Richard Feynman, risk tolerance, Sloane Ranger, sovereign wealth fund, Suez crisis 1956, WikiLeaks

The kind of industrial-scale corruption that enriched Yanukovich and undermined his country has driven anger and unrest in a great arc stretching from the Philippines in the east to Peru in the west, and affected most places in between. In Tunisia, official greed became so bad a street vendor set himself on fire, and launched what became the Arab Spring. In Malaysia, a group of young well-connected investors looted a sovereign wealth fund, and spent the proceeds on drugs, sex and Hollywood stars. In Equatorial Guinea, the president’s son had an official salary of $4,000 a month, yet bought himself a $35 million mansion in Malibu. All over the world, insiders have stolen public money, stashed it abroad, and used it to fund lifestyles of amazing luxury while their home countries have collapsed behind them.

Another Iranian, Alizera Moghadam, turned up in Canada in later 2013, with a Kittitian passport, leading Canada to cancel visa-free travel for St Kitts nationals, severely harming the prestige of the programme, as well as the interests of ordinary Kittitians. And the scandals have kept coming. Jho Low, a Malaysian being pursued by the US government for $540 million supposedly defrauded from the 1MDB sovereign wealth fund, has a St Kitts passport. A St Kitts passport holder defrauded McGill University Health Centre out of $22.5 million in what Canadian police call the country’s biggest ever case of corruption (he died before being brought to trial). In 2016, the St Kitts government had to revoke the passports of a US lawyer and his wife who had paid for their citizenship with funds misappropriated from clients.


pages: 359 words: 113,847

Siege: Trump Under Fire by Michael Wolff

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", Bernie Madoff, Boris Johnson, Cambridge Analytica, conceptual framework, cuban missile crisis, currency manipulation / currency intervention, Deng Xiaoping, disinformation, Donald Trump, fake news, forensic accounting, gig economy, Great Leap Forward, high net worth, hiring and firing, illegal immigration, immigration reform, impulse control, Jeffrey Epstein, Julian Assange, junk bonds, Michael Milken, oil shale / tar sands, opioid epidemic / opioid crisis, Potemkin village, Quicken Loans, Saturday Night Live, sovereign wealth fund, Steve Bannon, Steve Jobs, WikiLeaks

In August 2018, the Kushner family appeared to save itself by making a deal to bail out 666 Fifth with a Toronto-based investment firm called Brookfield Asset Management. With nearly $300 billion in assets under management, Brookfield fronted for sovereign wealth funds around the world—Qatar was one of its significant investors—that might want high levels of anonymity. In many deals, the anodyne “Brookfield” was better positioned than, for instance, the more overt Qatar Investment Authority. And in this unvirtuous circle of Brookfield, its sovereign wealth funds, and the Kushner family, it was not only Middle East money potentially looking for sway in the Trump White House, but Brookfield looking for White House influence on its behalf in the Middle East.


pages: 361 words: 117,566

Money Men: A Hot Startup, a Billion Dollar Fraud, a Fight for the Truth by Dan McCrum

air gap, Amazon Web Services, Bernie Madoff, Big Tech, bitcoin, Brexit referendum, Buckminster Fuller, call centre, Cambridge Analytica, centre right, Citizen Lab, corporate governance, corporate raider, COVID-19, Donald Trump, Elon Musk, fake news, forensic accounting, Internet Archive, Kinder Surprise, lockdown, Market Wizards by Jack D. Schwager, multilevel marketing, new economy, off-the-grid, offshore financial centre, pirate software, Ponzi scheme, Potemkin village, price stability, profit motive, reality distortion field, rolodex, Salesforce, short selling, Silicon Valley, Skype, SoftBank, sovereign wealth fund, special economic zone, Steve Jobs, Vision Fund, WeWork

Gold was there with his close friend and business partner Jonathan Dennis, a property guy, waiting for another old friend, the premiership football agent Saif Rubie. Gold had recently bumped into Rubie at a beach bar in Cannes, showing off to beautiful women in bikinis by spraying champagne about. As they caught up in the sunshine Rubie mentioned he’d somehow got connected to a sovereign wealth fund with billions at its disposal. He knew Gold was a prolific and successful trader and wanted to put him together with the money man. If Gold had a good trade, he said, this guy had the resources to back it. Just after 11.30 Rubie walked into Gold’s office accompanied by a Mancunian in a three-piece suit.

There had always been some ambiguity about which part of the conglomerate was making the investment; was it for the benefit of the group, or for clients of the Vision Fund? As it would turn out (revealed by Paul Davies at the Wall Street Journal) it was neither. The SoftBank group and the Vision Fund both declined to invest. So instead it was offered to SoftBank senior staff, and an Abu Dhabi sovereign wealth fund called Mubadala that was deeply enmeshed in the Vision Fund. To them the easy money was as tempting as a Louis Vuitton bag left by the side of the road, and they snapped it up. SoftBank’s involvement was to manage the juicy Wirecard investment on their behalf, earning a share of the profits.


pages: 421 words: 120,332

The World in 2050: Four Forces Shaping Civilization's Northern Future by Laurence C. Smith

Boeing 747, Bretton Woods, BRICs, business cycle, clean water, climate change refugee, Climategate, colonial rule, data science, deglobalization, demographic transition, Deng Xiaoping, Easter island, electricity market, energy security, flex fuel, G4S, global supply chain, Google Earth, Great Leap Forward, guest worker program, Hans Island, hydrogen economy, ice-free Arctic, informal economy, Intergovernmental Panel on Climate Change (IPCC), invention of agriculture, invisible hand, land tenure, Martin Wolf, Medieval Warm Period, megacity, megaproject, Mikhail Gorbachev, New Urbanism, oil shale / tar sands, oil shock, peak oil, Pearl River Delta, purchasing power parity, Ronald Reagan, Ronald Reagan: Tear down this wall, side project, Silicon Valley, smart grid, sovereign wealth fund, special economic zone, standardized shipping container, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, trade route, Tragedy of the Commons, UNCLOS, UNCLOS, urban planning, Washington Consensus, Y2K

Per capita income is over USD $50,000, higher than in the United States. It has a democratically elected government and ranks second in the world’s Index of Economic Freedom. 56 It is a member of the IMF, WTO, UNESCO, Interpol, and many other global institutions. Since the 1970s the performance of its sovereign wealth funds has been legendary. Through heavy global investments they’ve returned 4%-10% annually, growing a few humble millions into over USD $200 billion today.57 Singapore has learned to manage long-standing tensions between its main ethnic groups (Chinese, Malay, and Indian) and religions. Mass transit is abundant, clean, and energy-efficient.58 There are wonderful parks, theaters, and museums.

Singapore received 87 out of 100 possible points in 2009; the United States received 80 points out of 100, ranking it sixth behind Hong Kong, Singapore, Australia, Ireland, and New Zealand. Nigeria received only 55 points, ranking it #117 out of 179 countries evaluated. Data from www.heritage.org/index, viewed January 28, 2009. 57 Government of Singapore Investment Corporation and Temasek Holdings, V. Shih, “Tools of Survival: Sovereign Wealth Funds in Singapore and China,” Geopolitics 14, no. 2 (2009): 328-344; also http://www.temasekholdings.com.sg/media_centre_faq.htm (accessed November 16, 2009). 58 Mass transit is so efficient and appealing in Singapore that it has far fewer cars per capita than other comparable cities. Only 5% of Singapore’s energy consumption goes into transportation, unlike Berlin (35%), London (26%), New York (36%), Tokyo (38%), Bologna (28%), Mexico City (53%), or Buenos Aires (49%).


pages: 413 words: 119,379

The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa's Wealth by Tom Burgis

Airbus A320, Berlin Wall, blood diamond, BRICs, British Empire, central bank independence, clean water, colonial rule, corporate social responsibility, crony capitalism, Deng Xiaoping, Donald Trump, F. W. de Klerk, financial engineering, flag carrier, Gini coefficient, Global Witness, Livingstone, I presume, McMansion, megacity, megaproject, Nelson Mandela, offshore financial centre, oil shock, open economy, purchasing power parity, rolodex, Ronald Reagan, Silicon Valley, South China Sea, sovereign wealth fund, structural adjustment programs, trade route, transfer pricing, upwardly mobile, urban planning, Washington Consensus, WikiLeaks, zero-sum game

The Futungo was able to enjoy the legitimacy conferred by the IMF’s engagement, selectively implement the reforms that made commercial sense, and twist others to entrench its authority. In 2012, as stipulated in the terms of its loan from the IMF, Angola set up a sovereign wealth fund, a commonly used vehicle for countries that make lots of cash from exports to invest some of it at home and abroad. It was a sensible idea in an economy so skewed by oil. Norway’s sovereign wealth fund is arguably the main reason it has been able to dodge the resource curse – by keeping most of its oil revenues well away from the budget, to be invested for posterity, rather than inflicting Dutch Disease on the economy and allowing the political elite of the day to reward its cronies with fast cash.


World Cities and Nation States by Greg Clark, Tim Moonen

active transport: walking or cycling, Asian financial crisis, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, business climate, clean tech, congestion charging, corporate governance, Crossrail, deindustrialization, Deng Xiaoping, driverless car, financial independence, financial intermediation, Francis Fukuyama: the end of history, full employment, gentrification, global supply chain, global value chain, high net worth, high-speed rail, housing crisis, immigration reform, income inequality, informal economy, Kickstarter, knowledge economy, low skilled workers, managed futures, megacity, megaproject, new economy, New Urbanism, Norman Mailer, open economy, Pearl River Delta, rent control, Richard Florida, Shenzhen special economic zone , Silicon Valley, smart cities, sovereign wealth fund, special economic zone, stem cell, supply-chain management, tacit knowledge, The Wealth of Nations by Adam Smith, trade route, transaction costs, transit-oriented development, upwardly mobile, urban planning, urban renewal, urban sprawl, War on Poverty, zero-sum game

potentially much‐needed room to relieve congestion, with an intention to house 1.5 million people eventually if enough private investment can be attracted. The initiative is long term in nature and builds upon international experience such as Navi Mumbai, which began in the early 1970s, and the development of the New Territories in Hong Kong. Russia’s sovereign wealth fund has already committed to financing half the cost of a four‐lane central ring road, while a metro connection is underway. Although Russian government ministries will no longer be relocated to the new territory, as first mooted, the increased land provides valuable opportunities to create a more polycentric city and raise ­ standards of living.

Available at http://www.unep.org/transport/lowcarbon/PDFs/Role_of_High_ Speed_Rail_Final.pdf. Accessed 2016 Feb 9. Sikarwar, D. (2015). Government sets up Rs 40,000 crore National Investment and Infra­ structure fund, CEO likely by January‐end. The Economic Times. Available at http://articles. economictimes.indiatimes.com/2015‐12‐30/news/69402712_1_infrastructure‐fund‐sovereign‐ wealth‐funds‐finance‐minister‐arun‐jaitley. Accessed 2016 Feb 9. Singh, R.K. (2015). Modi’s infrastructure splurge revives investment in India. Reuters. Available at http://in.reuters.com/article/india‐economy‐investment‐modi‐industrial‐­ idINKCN0S71MO20151013. Accessed 2016 Feb 9. Sivaramakrishnan, K.C. (2015).


pages: 147 words: 45,890

Aftershock: The Next Economy and America's Future by Robert B. Reich

Abraham Maslow, Alan Greenspan, Berlin Wall, business cycle, carbon tax, declining real wages, delayed gratification, Doha Development Round, endowment effect, Ford Model T, full employment, George Akerlof, high-speed rail, Home mortgage interest deduction, Hyman Minsky, illegal immigration, income inequality, invisible hand, job automation, junk bonds, labor-force participation, Long Term Capital Management, loss aversion, low interest rates, Michael Milken, military-industrial complex, mortgage debt, new economy, offshore financial centre, Ralph Nader, Ronald Reagan, school vouchers, sovereign wealth fund, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, too big to fail, We are all Keynesians now, World Values Survey

The platform of the Independence Party, as well as its message, is clear and uncompromising: zero tolerance of illegal immigrants; a freeze on legal immigration from Latin America, Africa, and Asia; increased tariffs on all imports; a ban on American companies moving their operations to another country or outsourcing abroad; a prohibition on foreign “sovereign wealth funds” investing in the United States. America will withdraw from the United Nations, the World Trade Organization, the World Bank, and the International Monetary Fund; end all “involvements” in foreign countries; refuse to pay any more interest on our debt to China, essentially defaulting on it; and stop trading with China unless China freely floats its currency.


pages: 457 words: 143,967

The Bank That Lived a Little: Barclays in the Age of the Very Free Market by Philip Augar

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, Bear Stearns, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Bonfire of the Vanities, bonus culture, book value, break the buck, business logic, call centre, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, family office, financial deregulation, financial innovation, fixed income, foreign exchange controls, Glass-Steagall Act, high net worth, hiring and firing, index card, index fund, interest rate derivative, light touch regulation, loadsamoney, Long Term Capital Management, long term incentive plan, low interest rates, Martin Wolf, money market fund, moral hazard, Nick Leeson, Northern Rock, offshore financial centre, old-boy network, out of africa, prediction markets, proprietary trading, quantitative easing, risk free rate, Ronald Reagan, shareholder value, short selling, Sloane Ranger, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, too big to fail, vertical integration, wikimedia commons, yield curve

At this stage, however, there was only one answer to give Steel: ‘Yes. It would definitely be something to think about.’4 Diamond reported the call to the board, obtained permission to do some analysis and phoned Steel occasionally over the next three months to update him. DESERT SANDS Barclays had always maintained good relations with the sovereign wealth funds of the Gulf States, especially Qatar. Former chairman Andrew Buxton had spent a lot of time there, and Barclays was careful to keep its network fresh, acquiring a banking licence from the Qatar Financial Centre’s Regulatory Authority in 2006, opening an office in the Financial Centre’s Tower in Doha in 2007 and in May the following year arranging for Varley and Roger Jenkins, head of Barclays Capital’s Middle Eastern business, to meet Qatar’s prime minister, Sheikh Hamad bin Jassim bin Jabr al Thani, known as HBJ.

If Barclays could not complete the fund raising it promised, for example by selling BGI, or if, as competitors alleged, it had been mis-marking its books, there would be serious consequences. It was vital to the government’s credibility that the October 2008 nationalizations cleaned up all the mess but it was not clear whether the Barclays’ capital raising did that and the involvement of sovereign wealth funds added a diplomatic dimension. It was all very well for Barclays to say ‘under no circumstances will we take government money’ but to government eyes its ability to deliver had become a public interest issue as well as one for the company’s shareholders. If Barclays was going to need a bail-out, the authorities were determined that it would be on their terms and at a time of their choosing.


pages: 421 words: 128,094

King of Capital: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzman and Blackstone by David Carey

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, asset allocation, banking crisis, Bear Stearns, Bonfire of the Vanities, business cycle, Carl Icahn, carried interest, collateralized debt obligation, corporate governance, corporate raider, credit crunch, deal flow, diversification, diversified portfolio, financial engineering, fixed income, Future Shock, Gordon Gekko, independent contractor, junk bonds, low interest rates, margin call, Menlo Park, Michael Milken, mortgage debt, new economy, Northern Rock, risk tolerance, Rod Stewart played at Stephen Schwarzman birthday party, Sand Hill Road, Savings and loan crisis, sealed-bid auction, Silicon Valley, sovereign wealth fund, Teledyne, The Predators' Ball, éminence grise

It should have been smoother sailing, but the project instead lurched forward and back as a succession of out-of-the-blue events caught Schwarzman, James, and the rest of Blackstone off guard. The first was utterly fortuitous. Through friends, Antony Leung, the newly hired head of the firm’s Asian operations and Hong Kong’s former finance minister, contacted the managers of a new Chinese government sovereign wealth fund that was being formed to invest the billions of surplus dollars China was accumulating because of its yawning trade deficit with the West. Leung had in mind that the fund might buy a few Blackstone shares, but the managers of the new fund, later named China Investment Corporation, or CIC, instead expressed interest in buying a major stake.

At the end of the day, there are thousands of sources of pure capital. The trick is to supply something extra. Amid the financial upheaval, Blackstone was observing that maxim, elaborating on the concept of private equity through new investments and investment vehicles in China. On the heels of the investment by China’s sovereign wealth fund, Chinese Investment Corporation, in Blackstone in 2007, Blackstone took a minority stake in China Bluestar, a state-owned specialty chemicals company, for $500 million and agreed to work with it to acquire chemical makers elsewhere in the world. Two years later, Blackstone’s real estate group invested with a local Chinese developer to build a shopping mall, and the firm followed that by launching a $730 million private equity fund denominated in the Chinese renmimbi currency that will invest in the Shanghai region.


pages: 515 words: 142,354

The Euro: How a Common Currency Threatens the Future of Europe by Joseph E. Stiglitz, Alex Hyde-White

"there is no alternative" (TINA), "World Economic Forum" Davos, Alan Greenspan, bank run, banking crisis, barriers to entry, battle of ideas, behavioural economics, Berlin Wall, Bretton Woods, business cycle, buy and hold, capital controls, carbon tax, Carmen Reinhart, cashless society, central bank independence, centre right, cognitive dissonance, collapse of Lehman Brothers, collective bargaining, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, currency peg, dark matter, David Ricardo: comparative advantage, disintermediation, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial innovation, full employment, George Akerlof, Gini coefficient, global supply chain, Great Leap Forward, Growth in a Time of Debt, housing crisis, income inequality, incomplete markets, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, low interest rates, manufacturing employment, market bubble, market friction, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mortgage debt, neoliberal agenda, new economy, open economy, paradox of thrift, pension reform, pensions crisis, price stability, profit maximization, purchasing power parity, quantitative easing, race to the bottom, risk-adjusted returns, Robert Shiller, Ronald Reagan, Savings and loan crisis, savings glut, secular stagnation, Silicon Valley, sovereign wealth fund, the payments system, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, trickle-down economics, Washington Consensus, working-age population

Indeed, in the United States, the financial sector has been engaged in disintermediation, taking money out of the corporate sector, resulting in fewer funds available for investment. Huge amounts, for instance, are leaving firms in the form of share buybacks—in 2014, some 4 percent of GDP, and in 2015, 3.5 percent. Moreover, much of the savings is being done by “long-term savers,” those saving for their retirement or money put aside by countries in their sovereign wealth funds. Many of the key investment opportunities (infrastructure and technology) are long-term investments. It is perhaps not a surprise that shortsighted financial markets are unable to intermediate well between long-term savers and long-term investments. There are reforms in the legal, regulatory, and tax frameworks of Europe that would help focus the financial sector on the long-term—and on doing what it should do, and not doing what it shouldn’t.32 (2) REFORMING CORPORATE GOVERNANCE Firms, too, have become increasingly shortsighted, focusing on quarterly returns.

., 393 in US, 35, 36, 88, 89–92 see also euro single-market principle, 125–26, 231 skilled workers, 134–35 skills, 77 Slovakia, 331 Slovenia, 331 small and medium-sized enterprises (SMEs), 127, 138, 171, 229 small and medium-size lending facility, 246–47, 300, 301, 382 Small Business Administration, 246 small businesses, 153 Smith, Adam, xviii, 24, 39–40, 41 social cohesion, 22 Social Democratic Party, Portugal, 392 social program, 196 Social Security, 90, 91 social solidarity, xix societal capital, 77–78 solar energy, 193, 229 solidarity fund, 373 solidarity fund for stabilization, 244, 254, 264, 301 Soros, George, 390 South Dakota, 90, 346 South Korea, 55 bailout of, 113 sovereign risk, 14, 353 sovereign spreads, 200 sovereign wealth funds, 258 Soviet Union, 10 Spain, 14, 16, 114, 177, 178, 278, 331, 335, 343 austerity opposed by, 59, 207–8, 315 bank bailout of, 179, 199–200, 206 banks in, 23, 186, 199, 200, 242, 270, 354 debt of, 196 debt-to-GDP ratio of, 231 deficits of, 109 economic growth in, 215, 231, 247 gold supply in, 277 independence movement in, xi inequality in, 72, 212, 225–26 inherited debt in, 134 labor reforms proposed for, 155 loans in, 127 low debt in, 87 poverty in, 261 real estate bubble in, 25, 108, 109, 114–15, 126, 198, 301, 302 regional independence demanded in, 307 renewable energy in, 229 sovereign spread of, 200 spread in, 332 structural reform in, 70 surplus in, 17, 88 threat of breakup of, 270 trade deficits in, 81, 119 unemployment in, 63, 161, 231, 235, 332, 338 Spanish bonds, 114, 199, 200 spending, cutting, 196–98 spread, 332 stability, 147, 172, 261, 301, 364 automatic, 244 bubble and, 264 central banks and, 8 as collective action problem, 246 solidarity fund for, 54, 244, 264 Stability and Growth Pact, 245 standard models, 211–13 state development banks, 138 steel companies, 55 stock market, 151 stock market bubble, 200–201 stock market crash (1929), 18, 95 stock options, 259, 359 structural deficit, 245 Structural Funds, 243 structural impediments, 215 structural realignment, 252–56 structural reforms, 9, 18, 19–20, 26–27, 214–36, 239–71, 307 from austerity to growth, 263–65 banking union, 241–44 and climate change, 229–30 common framework for stability, 244–52 counterproductive, 222–23 debt restructuring and, 265–67 of finance, 228–29 full employment and growth, 256–57 in Greece, 20, 70, 188, 191, 214–36 growth and, 232–35 shared prosperity and, 260–61 and structural realignment, 252–56 of trade deficits, 216–17 trauma of, 224 as trivial, 214–15, 217–20, 233 subsidiarity, 8, 41–42, 263 subsidies: agricultural, 45, 197 energy, 197 sudden stops, 111 Suharto, 314 suicide, 82, 344 Supplemental Nutrition Assistance Program (SNAP), 91 supply-side effects: in Greece, 191, 215–16 of investments, 367 surpluses, fiscal, 17, 96, 312, 379 primary, 187–88 surpluses, trade, see trade surpluses “Swabian housewife,” 186, 245 Sweden, 12, 46, 307, 313, 331, 335, 339 euro referendum of, 58 refugees into, 320 Switzerland, 44, 307 Syria, 321, 342 Syriza party, 309, 311, 312–13, 315, 377 Taiwan, 55 tariffs, 40 tax avoiders, 74, 142–43, 227–28, 261 taxes, 142, 290, 315 in Canada, 191 on capital, 356 on carbon, 230, 260, 265, 368 consumption, 193–94 corporate, 189–90, 227, 251 cross-border, 319, 384 and distortions, 191 in EU, 8, 261 and fiat currency, 284 and free mobility of goods and capital, 260–61 in Greece, 16, 142, 192, 193–94, 227, 367–68 ideal system for, 191 IMF’s warning about high, 190 income, 45 increase in, 190–94 inequality and, 191 inheritance, 368 land, 191 on luxury cars, 265 progressive, 248 property, 192–93, 227 Reagan cuts to, 168, 210 shipping, 227, 228 as stimulative, 368 on trade surpluses, 254 value-added, 190, 192 tax evasion, in Greece, 190–91 tax laws, 75 tax revenue, 190–96 Taylor, John, 169 Taylor rule, 169 tech bubble, 250 technology, 137, 138–39, 186, 211, 217, 251, 258, 265, 300 and new financial system, 274–76, 283–84 telecoms, 55 Telmex, 369 terrorism, 319 Thailand, 113 theory of the second best, 27–28, 48 “there is no alternative” (TINA), 306, 311–12 Tocqueville, Alexis de, xiii too-big-to-fail banks, 360 tourism, 192, 286 trade: and contractionary expansion, 209 US push for, 323 trade agreements, xiv–xvi, 357 trade balance, 81, 93, 100, 109 as allegedly self-correcting, 98–99, 101–3 and wage flexibility, 104–5 trade barriers, 40 trade deficits, 89, 139 aggregate demand weakened by, 111 chit solution to, 287–88, 290, 299–300, 387, 388–89 control of, 109–10, 122 with currency pegs, 110 and fixed exchange rates, 107–8, 118 and government spending, 107–8, 108 of Greece, 81, 194, 215–16, 222, 285–86 structural reform of, 216–17 traded goods, 102, 103, 216 trade integration, 393 trade surpluses, 88, 118–21, 139–40, 350–52 discouragement of, 282–84, 299–300 of Germany, 118–19, 120, 139, 253, 293, 299, 350–52, 381–82, 391 tax on, 254, 351, 381–82 Transatlantic Trade and Investment Partnership, xv, 323 transfer price system, 376 Trans-Pacific Partnership, xv, 323 Treasury bills, US, 204 Trichet, Jean-Claude, 100–101, 155, 156, 164–65, 251 trickle-down economics, 362 Troika, 19, 20, 26, 55, 56, 58, 60, 69, 99, 101–3, 117, 119, 135, 140–42, 178, 179, 184, 195, 274, 294, 317, 362, 370–71, 373, 376, 377, 386 banks weakened by, 229 conditions of, 201 discretion of, 262 failure to learn, 312 Greek incomes lowered by, 80 Greek loan set up by, 202 inequality created by, 225–26 poor forecasting of, 307 predictions by, 249 primary surpluses and, 187–88 privatization avoided by, 194 programs of, 17–18, 21, 155–57, 179–80, 181, 182–83, 184–85, 187–93, 196, 197–98, 202, 204, 205, 207, 208, 214–16, 217, 218–23, 225–28, 229, 231, 233–34, 273, 278, 308, 309–11, 312, 313, 314, 315–16, 323–24, 348, 366, 379, 392 social contract torn up by, 78 structural reforms imposed by, 214–16, 217, 218–23, 225–38 tax demand of, 192 and tax evasion, 367 see also European Central Bank (ECB); European Commission; International Monetary Fund (IMF) trust, xix, 280 Tsipras, Alexis, 61–62, 221, 273, 314 Turkey, 321 UBS, 355 Ukraine, 36 unemployment, 3, 64, 68, 71–72, 110, 111, 122, 323, 336, 342 as allegedly self-correcting, 98–101 in Argentina, 267 austerity and, 209 central banks and, 8, 94, 97, 106, 147 ECB and, 163 in eurozone, 71, 135, 163, 177–78, 181, 331 and financing investments, 186 in Finland, 296 and future income, 77 in Greece, xi, 71, 236, 267, 331, 338, 342 increased by capital, 264 interest rates and, 43–44 and internal devaluation, 98–101, 104–6 migration and, 69, 90, 135, 140 natural rate of, 172–73 present-day, in Europe, 210 and rise of Hitler, 338, 358 and single currency, 88 in Spain, 63, 161, 231, 235, 332, 338 and structural reforms, 19 and trade deficits, 108 in US, 3 youth, 3, 64, 71 unemployment insurance, 91, 186, 246, 247–48 UNICEF, 72–73 unions, 101, 254, 335 United Kingdom, 14, 44, 46, 131, 307, 331, 332, 340 colonies of, 36 debt of, 202 inflation target set in, 157 in Iraq War, 37 light regulations in, 131 proposed exit from EU by, 4, 270 United Nations, 337, 350, 384–85 creation of, 38 and lower rates of war, 196 United States: banking system in, 91 budget of, 8, 45 and Canada’s 1990 expansion, 209 Canada’s free trade with, 45–46, 47 central bank governance in, 161 debt-to-GDP of, 202, 210–11 financial crisis originating in, 65, 68, 79–80, 128, 296, 302 financial system in, 228 founding of, 319 GDP of, xiii Germany’s borrowing from, 187 growing working-age population of, 70 growth in, 68 housing bubble in, 108 immigration into, 320 migration in, 90, 136, 346 monetary policy in financial crisis of, 151 in NAFTA, xiv 1980–1981 recessions in, 76 predatory lending in, 310 productivity in, 71 recovery of, xiii, 12 rising inequality in, xvii, 333 shareholder capitalism of, 21 Small Business Administration in, 246 structural reforms needed in, 20 surpluses in, 96, 187 trade agenda of, 323 unemployment in, 3, 178 united currency in, 35, 36, 88, 89–92 United States bonds, 350 unskilled workers, 134–35 value-added tax, 190, 192 values, 57–58 Varoufakis, Yanis, 61, 221, 309 velocity of circulation, 167 Venezuela, 371 Versaille, Treaty of, 187 victim blaming, 9, 15–17, 177–78, 309–11 volatility: and capital market integration, 28 in exchange rates, 48–49 Volcker, Paul, 157, 168 wage adjustments, 100–101, 103, 104–5, 155, 216–17, 220–22, 338, 361 wages, 19, 348 expansionary policies on, 284–85 Germany’s constraining of, 41, 42–43 lowered in Germany, 105, 333 wage stagnation, in Germany, 13 war, change in attitude to, 38, 196 Washington Consensus, xvi Washington Mutual, 91 wealth, divergence in, 139–40 Weil, Jonathan, 360 welfare, 196 West Germany, 6 Whitney, Meredith, 360 wind energy, 193, 229 Wolf, Martin, 385 worker protection, 56 workers’ bargaining rights, 19, 221, 255 World Bank, xv, xvii, 10, 61, 337, 357, 371 World Trade Organization, xiv youth: future of, xx–xxi unemployment of, 3, 64, 71 Zapatero, José Luis Rodríguez, xiv, 155, 362 zero lower bound, 106 ALSO BY JOSEPH E.


pages: 489 words: 136,195

Underland: A Deep Time Journey by Robert Macfarlane

Albert Einstein, Anthropocene, anti-communist, cuban missile crisis, dark matter, demand response, Google Earth, Lewis Mumford, megacity, Minecraft, oil rush, out of africa, planetary scale, precariat, sovereign wealth fund, supervolcano, the built environment, The Spirit Level, uranium enrichment

The Norwegian government responded quickly, creating Statoil in 1972 and establishing the principle of substantial state participation in each production licence issued for these wealthy waters. Oil is Norway’s life-blood. Its system – political, infrastructural – is thickly oiled, through and through. Substantial taxes have always been applied to the income produced by oil and gas: in under half a century of operations, the oil industry has generated a national sovereign wealth fund – the Oljefondet, or Oil Fund – of more than three-quarters of a trillion pounds, equivalent to around £150,000 per citizen. The petroleum sector accounts for almost a quarter of value-creation in the country as a whole; almost a third of the country’s total real investments are oil-based.

Norway loves nature, it loves technology too, and it sees these chiefly as complementary rather than opposed categories. But Norwegian oil is running down. Around the turn of the millennium, production from the North Sea fields peaked at 3.4 million barrels per day. By 2012 it had reduced to almost half that level, with a correspondingly diminished income to the sovereign wealth fund. The obvious solution to the dwindling production volume was – and remains – to open new oilfields. Attention turned to the North Norwegian and Barents seas. Early in the 2000s, interest grew in the possibilities of tapping the reserves that were thought to exist beneath the waters off the Lofoten and Vesterålen islands.


pages: 489 words: 132,734

A History of Future Cities by Daniel Brook

Berlin Wall, British Empire, business process, business process outsourcing, call centre, carbon footprint, Celtic Tiger, collateralized debt obligation, collective bargaining, company town, Credit Default Swap, credit default swaps / collateralized debt obligations, Deng Xiaoping, desegregation, Edward Glaeser, Fall of the Berlin Wall, financial innovation, glass ceiling, high-speed rail, indoor plumbing, joint-stock company, land reform, Mikhail Gorbachev, New Urbanism, open economy, Parag Khanna, Pearl River Delta, Potemkin village, profit motive, rent control, Shenzhen special economic zone , SimCity, sovereign wealth fund, special economic zone, starchitect, Suez canal 1869, trade route, urban planning, urban renewal, working poor

While the Doge’s Palace in Venice may be a nicer place to visit on vacation, it is in the fake Doge’s Palace at the University of Mumbai where the future prime ministers and CEOs of an ascendant India are training. And the goings-on in New York’s elegant Chrysler Building, named for the once-mighty American automaker and now 90 percent owned by an Emirati sovereign wealth fund, are of far less import than the dealings in Dubai’s chintzy, knockoff twin Chrysler Buildings, where media companies are testing the limits of press freedom in the Arab world every day. While Venice and New York are easier places to live, safely ensconced in wealthy, developed democracies, the fate of the world in the twenty-first century will be determined in places like Mumbai and Dubai.

Census Bureau, last modified January 31, 2012, accessed April 20, 2012, http://quickfacts.census.gov/qfd/states/36/3651000.html. 5 “everyone and everything in it”: John Kasarda and Greg Lindsay, Aerotropolis: The Way We’ll Live Next (New York: Farrar, Straus and Giroux, 2011), 290. 10 five million people move: Edward Glaeser, Triumph of the City (New York: Penguin, 2011), 1. 12 90 percent owned by an Emirati sovereign wealth fund: Charles Bagli, “Abu Dhabi Buys 90% Stake in Chrysler Building,” New York Times, July 10, 2008. 12 “the most abstract and intentional city”: Fyodor Dostoevsky, Notes from the Underground, chapter 2. Chapter 1: New Amsterdam—St. Petersburg, 1703–1825 15 world’s second-largest navy and more merchant ships: Robert K.


pages: 444 words: 127,259

Super Pumped: The Battle for Uber by Mike Isaac

"Susan Fowler" uber, "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Airbnb, Albert Einstein, always be closing, Amazon Web Services, Andy Kessler, autonomous vehicles, Ayatollah Khomeini, barriers to entry, Bay Area Rapid Transit, Benchmark Capital, Big Tech, Burning Man, call centre, Cambridge Analytica, Chris Urmson, Chuck Templeton: OpenTable:, citizen journalism, Clayton Christensen, cloud computing, corporate governance, creative destruction, data science, Didi Chuxing, don't be evil, Donald Trump, driverless car, Elon Musk, end-to-end encryption, fake news, family office, gig economy, Google Glasses, Google X / Alphabet X, Greyball, Hacker News, high net worth, hockey-stick growth, hustle culture, impact investing, information security, Jeff Bezos, John Markoff, John Zimmer (Lyft cofounder), Kevin Roose, Kickstarter, Larry Ellison, lolcat, Lyft, Marc Andreessen, Marc Benioff, Mark Zuckerberg, Masayoshi Son, mass immigration, Menlo Park, Mitch Kapor, money market fund, moral hazard, move fast and break things, Network effects, new economy, off grid, peer-to-peer, pets.com, Richard Florida, ride hailing / ride sharing, Salesforce, Sand Hill Road, self-driving car, selling pickaxes during a gold rush, shareholder value, Shenzhen special economic zone , Sheryl Sandberg, side hustle, side project, Silicon Valley, Silicon Valley startup, skunkworks, Snapchat, SoftBank, software as a service, software is eating the world, South China Sea, South of Market, San Francisco, sovereign wealth fund, special economic zone, Steve Bannon, Steve Jobs, stock buybacks, super pumped, TaskRabbit, tech bro, tech worker, the payments system, Tim Cook: Apple, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, ubercab, union organizing, upwardly mobile, Vision Fund, WeWork, Y Combinator

With the rise of Facebook, Google, Instagram, and Snapchat, venture capitalists looked everywhere to fund the next Mark Zuckerberg, Larry Page, or Evan Spiegel—the newest brilliant mind who sought, in the words of Steve Jobs, to “make a dent in the universe.” And as more money flowed into the Valley from outside investors—from hedge funds and private equity firms, sovereign wealth funds and Hollywood celebrities—the balance of power shifted from those who held the purse strings to the founders who brought the bright ideas and willingness to execute them. With money easier to come by, founders were able to exact more favorable terms for themselves, wresting control of the companies from the money men—who required diligence, profitability plans, and oversight.

Over two years beginning in 2005, YouTube raised about $10 million in VC capital; by 2006, Google acquired the startup for more than 150 times that amount. Mark Zuckerberg spent $1 billion on Instagram when the company had just thirteen employees. No one wanted to miss the waves of tech money flooding in. Mutual funds, investment bankers, overseas sovereign wealth funds, and foreign governments noticed the enormous wealth being created by IPOs held by Google, Twitter, and Facebook in Silicon Valley. And they saw that the most obscene wealth accrued to the early investors who bought before the companies went public. Traditionally, hedge funds stuck to markets they knew and invested across a range of publicly traded companies.


The New Enclosure: The Appropriation of Public Land in Neoliberal Britain by Brett Christophers

Alan Greenspan, book value, Boris Johnson, Capital in the Twenty-First Century by Thomas Piketty, Corn Laws, credit crunch, cross-subsidies, Diane Coyle, estate planning, Garrett Hardin, gentrification, ghettoisation, Hernando de Soto, housing crisis, income inequality, invisible hand, Jeremy Corbyn, land bank, land reform, land tenure, land value tax, late capitalism, market clearing, Martin Wolf, New Journalism, New Urbanism, off grid, offshore financial centre, performance metric, Philip Mirowski, price mechanism, price stability, profit motive, radical decentralization, Right to Buy, Skype, sovereign wealth fund, special economic zone, the built environment, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tragedy of the Commons, Tyler Cowen, urban sprawl, wealth creators

The first is large property developers. No fewer than five of the top twenty corporate landowners in the capital are now self-described developers: Canary Wharf Group Investment Holdings (1st), SEGRO (8th), British Land Company (9th), Land Securities Group (12th), and Grosvenor (20th). The second category is overseas sovereign wealth funds: the government of Kuwait stands at 16th in the list, while the Qatari Investment Authority owns 50 per cent of the Canary Wharf Group, as well as other London land. And the third category is non-developer financial institutions. One such is Brookfield Asset Management, which co-owns the Canary Wharf Group.

., 57 Maier, Charles, 27 Manchester, 96, 100 Manchester City Council, 100–1 market efficiency. see efficiency market failure, 38–44, 314–7 market-like competition, 140 market rent, 275, 282n2, 339 market value, 141–2, 216, 229–34, 232n3, 265–70, 282–3, 343–4 Martin, Alice, 310 Marx, Karl Capital, 62, 67–8 on enclosure movement, 11, 75, 82–3 on land and value, 33, 35 on landownership, 31, 44–7, 58, 65 The Communist Manifesto, 46–7 Massey, Doreen, 37–8, 52, 112–4, 116–7, 184, 297, 328–9, 339, 341 on land nationalization, 337–8 on neoliberal Britain, 74–5 on public landownership, 38, 107, 141, 226, 327, 339 May, Theresa, 171, 321, 332–3 McCloskey, Donald, 82 McDonald, Andy, 342 McInnes, Liz, 273 McKenzie, William, 151 Meek, James, 143, 145, 255, 272, 273, 294 Private Island, 1–2, 18n2 on privatization, 120 Metropolitan Police, 218–9, 232n2 Miliband, Ed, 170, 171 Mill, John Stuart, 48, 74, 109 Milton Keynes, 99, 272 Ministry of Agriculture, Fisheries and Foods, 223 Ministry of Defence (MoD), 182–3, 230, 269, 271, 277–9, 283, 303–4, 316–7 landholdings, 12n1, 105–6, 117, 165, 207–8, 249, 252–3, 259, 280 sale of married quarters estate, 154–5, 213–4, 271, 273–6, 311–2 Ministry of Housing, Communities and Local Government, 198n1. see also Department for Communities and Local Government Ministry of Justice (MoJ), 343 Ministry of Public Building and Works, 101 Ministry of Works, 101 Minton, Anna, 42, 315, 330 MIPIM, 124, 125 Mirowski, Philip, 294 Mitchell, Don, 43 modern-day land barons, 295–6 Molior, 123, 288 monastic lands, appropriation of, 79–80 Monbiot, George, 28, 188–9, 311 Monmouth, 266 monopoly power, 60, 61, 64, 121 Montagu Evans, 219–20 Montgomery, John, 100, 225–6, 283 Moore, Michael, 229 Moore Stephens, 219–20 Morphet, Janice, 146, 319 Morton, Alex, 159 MRH Minerals, 299, 334–5 Municipal Bonds Agency, 147 Mystery of Capital (de Soto), 34–5 National Audit Office (NAO), 122, 154–5, 181–4, 207–8, 276n2 National Coal Board, 97, 133, 247 National Health Service (NHS), 137–8, 140, 150, 152–3, 156, 177–9, 204–6, 210–8, 226 landholdings, 97–8, 104, 131, 148–9, 177, 239, 254, 260, 332–3 nationalization, 97–8, 110, 248, 336. see also land nationalization nationalized industries, 117, 187, 247–51 National Planning Policy Framework, 282n2 National Power, 18 National Trust, 116, 117, 344 NatWest Markets, 274 Naylor, Robert, 153, 156, 206, 214, 218, 332–3 Neil-Gallacher, Ettie, 276 neoliberalism, 14–9, 74–5, 114–7, 125, 148 Network Rail, 248, 273, 331, 341–2 landholdings, 248, 259n1, 259n4, 261, 331 Neutze, Max, 51, 69, 70 Newcastle, 100 New Economics Foundation (NEF), 281–2, 282n2, 325–6 New Life in Old Cities (Steen), 132–3 new towns, 98–9 New Town Development Corporations, 187 New Towns Act (1946), 98–9 Niemitz, Kristian, 158 non-developer financial institutions, 298 Norris, Steve, 233 Northumberland Park, 325 North Yorkshire, 256 Nottingham, 100, 324–5 Notting Hill Housing Group, 312 Nuclear Fuels, 18 Occupy London, 316 O’Connor, Feargus, 86 Office for National Statistics (ONS), 288, 306n1, 308, 309 Office of Fair Trading (OFT), 300, 301, 304 Office of Government Commerce (OGC), 122, 141, 150, 181, 207, 219 offshore money, 191–2 offshore tax havens, 192, 192n2 One Public Estate programme, 157, 182 option agreements, land, 189–90, 190n1, 300 Organ, Diana, 223 Orszag, Peter, 55 Osborne, George, 1, 202, 215–6 Our Ground group, 242, 324, 329, 332 overseas sovereign wealth funds, 298 Packer, Ian, 89, 93 Panama Papers, 192, 193 payment-deferral models, 236 Peck, Jamie, 15, 145, 147 Peel Estates, 299 People with Significant Control (PSC) register, 192, 193, 194 Perry, John, 339 Persimmon, 169 Pidgley, Tony, 236–7 Piketty, Thomas, 25, 54, 54n1 Capital in the Twenty-First Century, 53–4 Planning and Housing Committee, 315–6 planning permission, 64, 110–2, 130, 168–72, 234–5, 284–6, 292–3, 300–4 planning system/guidelines, 29, 64, 76, 109–10, 130–1, 158–9, 170, 284–5, 295–6, 313n1 Plender, John, 292–3, 340, 341 Plimmer, Gill, 18–9 Plymouth, 100 Polanyi, Karl, 16–7, 20, 25, 34–6, 41, 60, 67–70, 311–2, 334. see also ‘counter-movement’; double movement’; ‘fictitious commodities’ The Great Transformation, 26, 65–6, 324 Porter, Ted, 277 Powell-Smith, Anna, 194–5 power centralization of, 181–2, 219–21 landownership and, 28–30 Prescott, Jon, 160 Prime Minister’s Office, 174 Prisk, Mark, 133, 334 Private Island (Meek), 1–2, 18n2 private landownership, 37–72, 112–7, 286–96, 296–9, 299–311, 311–6 ‘private-public places,’ 315 private-sector buyers, 224–39, 296–9 privatization. see enterprise privatizations; land privatization in Britain Property Advisers to the Civil Estate (PACE), 226–7 property developers, 42, 107–8, 218– 9, 281–6, 295–6, 312–3, 315. see also housebuilding acquisition of public land, 195, 234–9, 298–9 criticism of planning system, 158–9 land banking, 171–2, 299–305 lobbying by, 123–5 Property Holdings, 181 Property Investment Forum, 295 property-owning democracy, 116 Property Repayment Services (PRS), 178, 179–80 Property Services Agency (PSA), 101, 106, 178–9, 181, 203, 217 Public Accounts Committee, 235, 274, 275, 280, 281, 284, 319 public estate in Britain definition, 6–10 extent of reduction, 2, 7, 247–58, 322–3 growth, 88–101 size, 96, 117, 258–62 Public Health Act (1875), 95 ‘public interest,’ 39 public land disclosure initiatives, 197 public land-for-housing programme, 209–10, 235, 249, 279–86, 300, 303, 331 Public Land Initiative (PLI), 235–6 public landownership, 43–4, 56–7, 64–5, 71, 84–5, 102–8, 330–1, 335–42 critique of, 126–73 public property map, 196–7 public space, 43–4 ‘public works,’ 39 Public Works Loan Board, 146–7, 341, 341n4 Qatari Investment Authority, 298 Quirk, Barry, 237–8 Railtrack group, 248 Rathbone Trust Company, 299 Raynsford, Nick, 229 Readman, Paul, 88–9 Redbridge Council, 271 Redundant Lands and Accommodation (RLA) procedure, 224–7, 231, 337 Regeneration Investment Fund for Wales (RIFW), 265–6 regeneration. see council estates, ‘regeneration’ of Register of Surplus Public Sector Land, 227 Reisman, David, 39, 40 Renfrewshire, 272 rent, 30–2, 44–8, 53–4, 57–64, 78, 305–11 rentier capitalism, 305–11 residential land. see housing land Resource Accounting and Budgeting framework, 179, 199 The Return of Owners of Land, 74, 84, 85, 87, 90 Ricardo, David, 44 right of pre-emption, 228 Right to Buy policy, 144–6, 204, 212, 262, 268, 272–3, 307, 328. see also council housing abolition, 146, 146n3 discounts to market value, 267–8 extension to housing association tenants, 216, 216n4, 255n3 Right to Contest, 134–5, 228–9 Roberts, Allan, 165–6 Rogers, Richard, 160, 161–2, 236 Rogers, Will, 32 Roldugin, Sergei, 193 Ropes & Gray, 194 Rosen, Michael, 150, 173, 318 Rothbard, Murray, 39 Royal Bank of Scotland (RBS), 1 Royal Hospital for Sick Children, 239 Royal Institute of Chartered Surveyors, 216 Royal London Mutual Insurance Society, 298 Royal Mail, 7n1, 18, 200–1, 247 Royal Town Planning Institute, 301 Russian Narodniks, 46 Rustin, Michael, 74–5 saturation surveys, 295 ‘Save Public Land’ campaign, 325–6 Savills, 131, 158, 167, 217, 219, 274 school buildings/playing-fields, 150, 221, 241–2, 249, 256–7, 318–9 School Premises Regulations (1981), 256 Schultz, Ted, 166 Scott, Allen, 59–60, 64, 65 Scottish Land Commission, 345 Scottish Parliament, 28 Scottish Water, 247n1, 259n3, 259n4, 261 Searle, Beverley, 54 Sea Street Developments, 266 SEGRO, 298 Select Committee on Economic Affairs, 282, 283 Sevilla-Buitrago, Alvaro, 13 Seymour, Richard, 2 Shapps, Grant, 157, 158, 168–9, 231 Shaw, Giles, 203 Sheffield, 95 Sheffield City Council, 65n2, 99, 107 Shelter housing charity, 301 Shelton, William, 118 Shorncliffe, 316–7 Shrubsole, Guy, 189, 326–7 Silkin, Lewis, 103 Simmel, Georg, 17 slum clearance, 95–6 Small Holdings and Allotments Act (1908), 70, 205 Smith, Adam, 20, 25, 39, 40, 44, 51, 310, 311 The Wealth of Nations, 57–8, 305 Smulian, Mark, 165 social cleansing, 314 social dislocation, 65–72, 311–21 social housing. see council housing Somerset, 256 South Wales Land Developments, 265–6 Southwark, 124, 161 Southwark Council, 313 Sovereign Land Trust, 320–1n4 space reduction targets, 180–3 Spain, 188 speculation. see land speculation Spelthorne Borough Council, 340 Spending Review (2010), 213 stagflation, 106 Stanley, Edward, 25–6, 28, 31, 85 Steen, Anthony, 134, 159, 163, 334 New Life in Old Cities, 132–3 Stevenage, 99 Stiglitz, Joseph, 51, 54–5 stimulatory economic policy, 102 St.


pages: 476 words: 139,761

Kleptopia: How Dirty Money Is Conquering the World by Tom Burgis

active measures, Anton Chekhov, banking crisis, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, Boris Johnson, Brexit referendum, British Empire, collapse of Lehman Brothers, coronavirus, corporate governance, COVID-19, credit crunch, Credit Default Swap, cryptocurrency, disinformation, do-ocracy, Donald Trump, energy security, Etonian, failed state, fake news, Gordon Gekko, high net worth, Honoré de Balzac, illegal immigration, invisible hand, Julian Assange, liberal capitalism, light touch regulation, lockdown, Mark Zuckerberg, Martin Wolf, Michael Milken, Mikhail Gorbachev, Mohammed Bouazizi, Northern Rock, offshore financial centre, Right to Buy, Ronald Reagan, Skype, sovereign wealth fund, trade route, WikiLeaks

It was a metropolis of discordant glam, as though Kubla Khan had slipped Isaac Asimov a tab of acid and told him to dream up a capital to sit at the fulcrum of a new order, with China to the east, Russia to the north and, from the west, approaching as once they walked the Silk Road, suitors seeking oil, uranium and customers for their skills in transforming tainted money. At one end of the main thoroughfare the Khan Shatyry, or royal marquee, swerved woozily skywards. An immense pleasure dome designed by Norman Foster, it had opened on Nazarbayev’s seventieth birthday. Halfway down the promenade stood the headquarters of the sovereign wealth fund, sponsors of the Astana cycling team, to which Lance Armstrong, the greatest athlete ever to straddle a saddle, had recently been recruited. At the other end, before the presidential palace, rose the Bayterek Tower, the sacred egg of the mythical Samruk nestled in the upper branches of the tree of life.

By the time the Zhanaozen workers went out on strike, Timur and his wife were each worth $1.3 billion, a combined fortune equal to that of Malcolm Glazer, the owner of Manchester United, or Oprah Winfrey. This wealth Timur had gathered by operating at the intersection of the market and the state. Nazarbayev appointed him to run the national oil and gas company, KazMunaiGas, of which OMG was a major subsidiary, then promoted him to chairman of the sovereign wealth fund that owned KazMunaiGas and the rest of the assets the state acquired or seized, such as Mukhtar Ablyazov’s confiscated bank, BTA. While Timur was stewarding the Kazakh state’s commercial interests, he had amassed his own private ones; the line between the two could appear vanishingly thin.


pages: 430 words: 135,418

Power Play: Tesla, Elon Musk, and the Bet of the Century by Tim Higgins

air freight, asset light, autonomous vehicles, big-box store, call centre, Colonization of Mars, coronavirus, corporate governance, COVID-19, Donald Trump, electricity market, Elon Musk, family office, Ford Model T, gigafactory, global pandemic, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Jeff Bezos, Jeffrey Epstein, junk bonds, Larry Ellison, low earth orbit, Lyft, margin call, Mark Zuckerberg, Masayoshi Son, Menlo Park, Michael Milken, paypal mafia, ride hailing / ride sharing, Sand Hill Road, self-driving car, Sheryl Sandberg, short selling, side project, Silicon Valley, Silicon Valley startup, skunkworks, SoftBank, Solyndra, sovereign wealth fund, stealth mode startup, Steve Jobs, Steve Jurvetson, Tesla Model S, Tim Cook: Apple, Travis Kalanick, Uber for X, uber lyft, vertical integration

In March, a conference room on the second floor of the Fremont factory overlooking the assembly line was converted into a dining room. Caterers prepared a meal of steaks for a small group. Musk was there, as was Ellison. Son was joined by Yasir Al-Rumayyan, the managing director of the deep-pocketed Saudi Arabia sovereign wealth fund, who would soon join SoftBank’s board. Musk, Ellison, Son, and Al-Rumayyan: Collectively they controlled hundreds of billions of dollars (though unlike those of his fellow diners, Musk’s fortune was largely illiquid). They all shared ambitions to make larger-than-life bets that, if successful, would change the course of humanity.

Instead, Apple hired back Doug Field, fresh from his work on the Model 3, to help guide its own car program. * * * — Musk awoke at one of his five Los Angeles mansions on August 7 and was greeted with a story in the Financial Times that revealed something that had been quietly brewing at Tesla. Saudi Arabia’s sovereign wealth fund had taken a $2 billion stake in the company, instantly making it one of the carmaker’s largest shareholders. Minutes later, as Musk headed to the airport to fly to the Gigafactory in Nevada, he typed out a fateful message on Twitter: “Am considering taking Tesla private at $420. Funding secured.”


Power Systems: Conversations on Global Democratic Uprisings and the New Challenges to U.S. Empire by Noam Chomsky, David Barsamian

"World Economic Forum" Davos, affirmative action, Affordable Care Act / Obamacare, Albert Einstein, American ideology, Chelsea Manning, collective bargaining, colonial rule, corporate personhood, David Brooks, discovery of DNA, double helix, drone strike, failed state, Great Leap Forward, Herbert Marcuse, high-speed rail, Howard Zinn, hydraulic fracturing, income inequality, inflation targeting, Intergovernmental Panel on Climate Change (IPCC), Julian Assange, land reform, language acquisition, Martin Wolf, Mohammed Bouazizi, Naomi Klein, Nelson Mandela, new economy, no-fly zone, obamacare, Occupy movement, oil shale / tar sands, pattern recognition, Powell Memorandum, public intellectual, quantitative easing, Ralph Nader, Ralph Waldo Emerson, single-payer health, sovereign wealth fund, The Wealth of Nations by Adam Smith, theory of mind, Tobin tax, union organizing, Upton Sinclair, uranium enrichment, WikiLeaks

For example, there is a lot of talk about the U.S. debt and the fact that China holds so much of it. Actually, Japan holds more U.S. debt than China.15 There have been occasions when China passed Japan, but most of the time, including right now, Japan holds most of the debt. When you put them together, the sovereign wealth funds of the United Arab Emirates probably hold more debt than China.16 Furthermore, the whole framework for the discussion of U.S. decline is misleading. We’re taught to talk about the world as a world of states conceived as unified, coherent entities. If you study international relations (IR) theory, there’s what’s called “realist” IR theory, which says there is an anarchic world of states and states pursue their “national interest.”


pages: 190 words: 53,409

Success and Luck: Good Fortune and the Myth of Meritocracy by Robert H. Frank

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Alan Greenspan, Amazon Mechanical Turk, American Society of Civil Engineers: Report Card, attribution theory, availability heuristic, behavioural economics, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, carried interest, Daniel Kahneman / Amos Tversky, David Brooks, deliberate practice, en.wikipedia.org, endowment effect, experimental subject, framing effect, full employment, Gary Kildall, high-speed rail, hindsight bias, If something cannot go on forever, it will stop - Herbert Stein's Law, income inequality, invisible hand, labor-force participation, lake wobegon effect, loss aversion, low interest rates, meritocracy, minimum wage unemployment, Network effects, Paradox of Choice, Paul Samuelson, Report Card for America’s Infrastructure, Richard Thaler, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Rory Sutherland, selection bias, side project, sovereign wealth fund, Steve Jobs, the long tail, The Wealth of Nations by Adam Smith, Tim Cook: Apple, ultimatum game, Vincenzo Peruggia: Mona Lisa, winner-take-all economy

But what the human capital approach misses is that certain skills are far more valuable in some settings than in others. In our 1995 book, The Winner-Take-All Society, Philip Cook and I argued that a gifted salesperson, for example, will be far more productive if her assignment is to sell financial securities to sovereign wealth funds than if she’s selling children’s shoes.1 If markets have been growing more competitive over time, why are the earnings gaps unaccounted for by the human capital approach larger than ever? Cook and I argued that what’s been changing is that new technologies and market institutions have been providing growing leverage for the talents of the ablest individuals.


pages: 196 words: 54,339

Team Human by Douglas Rushkoff

1960s counterculture, Abraham Maslow, Adam Curtis, autonomous vehicles, basic income, Berlin Wall, big-box store, bitcoin, blockchain, Burning Man, carbon footprint, circular economy, clean water, clockwork universe, cloud computing, collective bargaining, Computing Machinery and Intelligence, corporate personhood, digital capitalism, disintermediation, Donald Trump, drone strike, European colonialism, fake news, Filter Bubble, full employment, future of work, game design, gamification, gig economy, Google bus, Gödel, Escher, Bach, hockey-stick growth, Internet of things, invention of the printing press, invention of writing, invisible hand, iterative process, John Perry Barlow, Kevin Kelly, Kevin Roose, knowledge economy, Larry Ellison, Lewis Mumford, life extension, lifelogging, Mark Zuckerberg, Marshall McLuhan, means of production, mirror neurons, multilevel marketing, new economy, patient HM, pattern recognition, peer-to-peer, Peter Thiel, planned obsolescence, power law, prosperity theology / prosperity gospel / gospel of success, Ray Kurzweil, recommendation engine, ride hailing / ride sharing, Ronald Reagan, Ronald Reagan: Tear down this wall, shareholder value, sharing economy, Silicon Valley, Silicon Valley billionaire, social intelligence, sovereign wealth fund, Steve Jobs, Steven Pinker, Stewart Brand, tech billionaire, technoutopianism, TED Talk, theory of mind, trade route, Travis Kalanick, Turing test, universal basic income, Vannevar Bush, We are as Gods, winner-take-all economy, zero-sum game

The stock exchange, itself an abstraction of the real marketplace of goods and services, was purchased by its own abstraction. As more of the real world becomes subjected to the logic of capital, the things, people, and places on which we depend become asset classes. Homes become too expensive for people to buy because they’re a real estate investment for sovereign wealth funds and other nonhumans. Those who do manage to purchase homes soon realize that they’re only providing fodder for the mortgage industry, whose mortgages, in turn, are bundled into a yet more abstracted asset class of their own. People are at best an asset to be exploited, and at worst a cost to be endured.


pages: 169 words: 52,744

Big Capital: Who Is London For? by Anna Minton

"there is no alternative" (TINA), Airbnb, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Capital in the Twenty-First Century by Thomas Piketty, collateralized debt obligation, Credit Default Swap, credit default swaps / collateralized debt obligations, Donald Trump, eurozone crisis, Fall of the Berlin Wall, Frank Gehry, gentrification, high net worth, high-speed rail, housing crisis, illegal immigration, Kickstarter, land bank, land value tax, market design, new economy, New Urbanism, offshore financial centre, payday loans, post-truth, quantitative easing, rent control, rent gap, Right to Buy, Russell Brand, sovereign wealth fund, the built environment, The Wealth of Nations by Adam Smith, urban renewal, working poor

There will also be a new riverside park and public square, although the high street, new ‘public’ square and park will all be privately owned and privately controlled, with restrictions on public access and behaviour, a visible high-security presence in the shape of uniformed security guards and blanket CCTV coverage. The imprimatur of the Malaysian consortium that owns the development, which includes the largest developer in Malaysia, SP Setia, and a Malaysian sovereign wealth fund, is reflected by the naming of the new square as Malaysia Square; this echoes Canada Square in Canary Wharf, named for its Canadian investors twenty-five years ago, when this model of private ownership and control of large parts of the city really began in the UK. For the last fifteen years it has been the template for all new development and means that every ‘new piece of city’ is privately owned and removed from a democratically accountable, genuinely public realm.


pages: 178 words: 52,637

Quality Investing: Owning the Best Companies for the Long Term by Torkell T. Eide, Lawrence A. Cunningham, Patrick Hargreaves

air freight, Albert Einstein, asset light, backtesting, barriers to entry, buy and hold, carbon tax, cashless society, cloud computing, commoditize, Credit Default Swap, discounted cash flows, discovery of penicillin, endowment effect, global pandemic, haute couture, hindsight bias, legacy carrier, low cost airline, mass affluent, Network effects, oil shale / tar sands, pattern recognition, price elasticity of demand, proprietary trading, shareholder value, smart grid, sovereign wealth fund, supply-chain management, vertical integration

Appendix AKO Capital was founded in October 2005 by Nicolai Tangen and manages approximately $10 billion across long-only and long-short equity funds. It has a long-term investor base that includes many of the world’s leading endowments, charitable foundations, institutional investors and sovereign wealth funds. AKO Capital has so far generated approximately $3.4 billion of returns for its investors. It was nominated for the Eurohedge Best European Equity Fund and Best New European Fund awards in 2006 and for Best European Equity Fund over $500 million in 2009, 2010, 2012 and 2014, winning in 2012.


pages: 499 words: 152,156

Age of Ambition: Chasing Fortune, Truth, and Faith in the New China by Evan Osnos

conceptual framework, crony capitalism, currency manipulation / currency intervention, David Brooks, Deng Xiaoping, East Village, Evgeny Morozov, fake news, financial independence, Gini coefficient, Great Leap Forward, high-speed rail, income inequality, indoor plumbing, information asymmetry, land reform, Lao Tzu, low skilled workers, market fundamentalism, Mohammed Bouazizi, plutocrats, prosperity theology / prosperity gospel / gospel of success, rolodex, scientific worldview, Silicon Valley, South China Sea, sovereign wealth fund, special economic zone, Steve Jobs, transcontinental railway, Washington Consensus, Xiaogang Anhui farmers, young professional

They enlisted the support of rising stars in the Party, such as Wang Qishan, who was the son-in-law of a vice-premier, and Zhou Xiaochuan, a reform-minded political scion. She began hanging around and ended up with a string of scoops and, eventually, an incomparable Rolodex of names destined for China’s highest offices. (Wang Qishan reached the Standing Committee of the Politburo; Gao Xiqing became head of China’s sovereign wealth fund; Zhou Xiaochuan ran China’s central bank.) Later, many people in Beijing whispered that these connections protected Hu, but she insisted that outsiders overestimated her proximity to power. “I don’t know their birthdays,” she said, of high-ranking officials. “I’m a journalist, and they treat me as a journalist.”

Their view, which was popular in China across ideological lines, had some validity: American politicians invoked national security concerns, with varying degrees of credibility, to oppose Chinese direct investment. But Tang’s view, infused with a sense of victimhood, also obscured some evidence to the contrary: China had succeeded in other deals abroad—its sovereign wealth fund had stakes in the Blackstone Group and in Morgan Stanley—and though China had taken steps to open its markets to foreigners, it remained equally inclined to reject an American attempt to buy an asset as sensitive as a Chinese oil company. Tang’s belief that the United States would seek to obstruct China’s rise—“a new Cold War”—extended beyond economics to broader American policy.


pages: 1,544 words: 391,691

Corporate Finance: Theory and Practice by Pierre Vernimmen, Pascal Quiry, Maurizio Dallocchio, Yann le Fur, Antonio Salvi

"Friedman doctrine" OR "shareholder theory", accelerated depreciation, accounting loophole / creative accounting, active measures, activist fund / activist shareholder / activist investor, AOL-Time Warner, ASML, asset light, bank run, barriers to entry, Basel III, Bear Stearns, Benoit Mandelbrot, bitcoin, Black Swan, Black-Scholes formula, blockchain, book value, business climate, business cycle, buy and hold, buy low sell high, capital asset pricing model, carried interest, collective bargaining, conceptual framework, corporate governance, correlation coefficient, credit crunch, Credit Default Swap, currency risk, delta neutral, dematerialisation, discounted cash flows, discrete time, disintermediation, diversification, diversified portfolio, Dutch auction, electricity market, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, eurozone crisis, financial engineering, financial innovation, fixed income, Flash crash, foreign exchange controls, German hyperinflation, Glass-Steagall Act, high net worth, impact investing, implied volatility, information asymmetry, intangible asset, interest rate swap, Internet of things, inventory management, invisible hand, joint-stock company, joint-stock limited liability company, junk bonds, Kickstarter, lateral thinking, London Interbank Offered Rate, low interest rates, mandelbrot fractal, margin call, means of production, money market fund, moral hazard, Myron Scholes, new economy, New Journalism, Northern Rock, performance metric, Potemkin village, quantitative trading / quantitative finance, random walk, Right to Buy, risk free rate, risk/return, shareholder value, short selling, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Steve Jobs, stocks for the long run, supply-chain management, survivorship bias, The Myth of the Rational Market, time value of money, too big to fail, transaction costs, value at risk, vertical integration, volatility arbitrage, volatility smile, yield curve, zero-coupon bond, zero-sum game

(g) Governments In Europe and the USA, governments’ role as the major shareholders of listed groups is fading, even if they are still majority shareholders of large industry players (Deutsche Bahn, EDF, Enel) or playing a key role in some groups like Deutsche Telekom, Airbus or Eni. State ownership had a period of revival thanks to the economic crisis, as some groups were taken over to avoid collapse (General Motors, RBS) or funds were injected through equity issues to reinforce financial institutions (Citi, ING, etc.). At the same time, sovereign wealth funds, mostly created by emerging countries and financed thanks to reserves from staples, are gaining importance as long-term shareholders. They are normally very financially minded, but their opacity, their size (often above €50bn or €100bn) and their strong connections with mostly undemocratic states are worrying to some.

.; institutional shareholders (insurance companies, pension funds, unit trusts, etc.) who are becoming less passive; employee-shareholders. Normally these shareholders are loyal and non-volatile, lending a degree of stability to the capital; governments, the importance of which is rising due to sovereign wealth funds mainly originating from emerging markets. Defensive measures for maintaining control of a company’s capital carry a cost, because they prevent investors from taking advantage of the potential opportunities a takeover might create. These measures include: separating management control from financial control through double-voting shares, holding companies, limited share partnerships, investment certificates and non-voting shares; controlling shareholder changes through right of approval clauses or pre-emption rights; strengthening the position of loyal shareholders by carrying out reserved capital increases, buying back shares, merging, encouraging employees to become shareholders and issuing warrants; exploiting legal and regulatory opportunities: specific regulations, voting right limitations and poison pills.

Notes 1 We have based this example on publicly available information, and for some of the figures have either simplified the reality or made some estimates. It should be considered as illustrative and does not reflect the reality or the exact state of the company. 2Assuming 100% payout and interest rates on debt at 6%. 3 Assuming tax consolidation treatment. 4 Pension funds, insurance companies, banks, sovereign wealth funds. 5 Just before the LBO market ground to a sudden halt. 6 For more, see Chapter 21. 7 Earnings before interest, taxes, depreciation and amortisation. For more, see Chapter 3. 8 See page 349. 9 Debt securities issued by a special purpose vehicle, which buys and holds bonds issued by corporations or banks (collateralised bond obligations) or bank loans (collateralised loan obligations).


pages: 202 words: 62,901

The People's Republic of Walmart: How the World's Biggest Corporations Are Laying the Foundation for Socialism by Leigh Phillips, Michal Rozworski

Alan Greenspan, Anthropocene, Berlin Wall, Bernie Sanders, biodiversity loss, call centre, capitalist realism, carbon footprint, carbon tax, central bank independence, Colonization of Mars, combinatorial explosion, company town, complexity theory, computer age, corporate raider, crewed spaceflight, data science, decarbonisation, digital rights, discovery of penicillin, Elon Musk, financial engineering, fulfillment center, G4S, Garrett Hardin, Georg Cantor, germ theory of disease, Gordon Gekko, Great Leap Forward, greed is good, hiring and firing, independent contractor, index fund, Intergovernmental Panel on Climate Change (IPCC), Internet of things, inventory management, invisible hand, Jeff Bezos, Jeremy Corbyn, Joseph Schumpeter, Kanban, Kiva Systems, linear programming, liquidity trap, mass immigration, Mont Pelerin Society, Neal Stephenson, new economy, Norbert Wiener, oil shock, passive investing, Paul Samuelson, post scarcity, profit maximization, profit motive, purchasing power parity, recommendation engine, Ronald Coase, Ronald Reagan, sharing economy, Silicon Valley, Skype, sovereign wealth fund, strikebreaker, supply-chain management, surveillance capitalism, technoutopianism, TED Talk, The Nature of the Firm, The Wealth of Nations by Adam Smith, theory of mind, Tragedy of the Commons, transaction costs, Turing machine, union organizing, warehouse automation, warehouse robotics, We are all Keynesians now

Well, for instance, the chance that any two firms in the broad S&P 1500 index of the US stock market have a common owner that holds at least 5 percent of shares in both is today a stunning 90 percent. Just twenty years ago, the chance of finding this kind of common ownership was around 20 percent. And index funds (which invest money passively), pension funds, sovereign wealth funds, and other gargantuan pools of capital all bind economic actors still closer together via their enormous pools of money. Passive management of such funds is a relatively novel investment strategy, involving retention of a broad swath of assets that replicates an existing index, which itself aims to replicate an entire market; in this model, limiting buying and selling still offers robust diversification, but with limited transaction costs and low management fees.


pages: 202 words: 62,199

Essentialism: The Disciplined Pursuit of Less by Greg McKeown

90 percent rule, Albert Einstein, Clayton Christensen, Daniel Kahneman / Amos Tversky, David Sedaris, deliberate practice, double helix, en.wikipedia.org, endowment effect, impact investing, Isaac Newton, iterative process, Jeff Bezos, Lao Tzu, lateral thinking, loss aversion, low cost airline, Mahatma Gandhi, microcredit, minimum viable product, Nelson Mandela, North Sea oil, Peter Thiel, power law, Ralph Waldo Emerson, Richard Thaler, Rosa Parks, Salesforce, Shai Danziger, side project, Silicon Valley, Silicon Valley startup, sovereign wealth fund, Stanford prison experiment, Steve Jobs, TED Talk, Vilfredo Pareto

The way of the Essentialist, on the other hand, is to use the good times to create a buffer for the bad. Norway also benefited enormously from windfall taxes from oil but unlike Britain, Norway invested much of its good fortune in an endowment.2 Today, this endowment has grown over time to be worth an extraordinary $720 billion, making it the world’s largest sovereign wealth fund and providing a cushion against unknown future scenarios.3 These days the pace of our lives is only getting faster and faster. It is as if we are driving one inch behind another car at one hundred miles an hour. If that driver makes even the tiniest unexpected move—if he slows down even a little, or swerves even the smallest bit—we’ll ram right into him.


pages: 219 words: 61,720

American Made: Why Making Things Will Return Us to Greatness by Dan Dimicco

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, Alan Greenspan, American energy revolution, American Society of Civil Engineers: Report Card, Apollo 11, Bakken shale, barriers to entry, Bernie Madoff, California high-speed rail, carbon credits, carbon footprint, carbon tax, clean water, congestion pricing, crony capitalism, currency manipulation / currency intervention, David Ricardo: comparative advantage, decarbonisation, digital divide, driverless car, fear of failure, full employment, Google Glasses, high-speed rail, hydraulic fracturing, invisible hand, job automation, knowledge economy, laissez-faire capitalism, Loma Prieta earthquake, low earth orbit, manufacturing employment, Neil Armstrong, oil shale / tar sands, Ponzi scheme, profit motive, Report Card for America’s Infrastructure, rolling blackouts, Ronald Reagan, Savings and loan crisis, Silicon Valley, smart grid, smart meter, sovereign wealth fund, The Wealth of Nations by Adam Smith, too big to fail, uranium enrichment, Washington Consensus, Works Progress Administration

A case in point would be the California Public Employee Retirement System (CalPERS), one of the largest institutional investments in the United States, with more than $245 billion in assets.29 Right now, the pension fund has about $1 billion invested in infrastructure around the world.30 In October 2012, CalPERS announced plans to expand those investments even more—upward of $5 billion.31 Where better to put that money than in the United States? Thinking more broadly, we could leverage some of our relationships around the world with sovereign wealth funds that are more interested in putting their capital to work in a stable market. Foreigners who’ve bought U.S. government securities in the past would likely be willing to fund an infrastructure bank. How do I know? Because in addition to Europe’s bank, the private sector has already invested in California’s infrastructure and economic development bank, which the state set up back in 1994.


pages: 190 words: 62,941

Wild Ride: Inside Uber's Quest for World Domination by Adam Lashinsky

"Susan Fowler" uber, "World Economic Forum" Davos, Airbnb, always be closing, Amazon Web Services, asset light, autonomous vehicles, Ayatollah Khomeini, Benchmark Capital, business process, Chuck Templeton: OpenTable:, cognitive dissonance, corporate governance, DARPA: Urban Challenge, Didi Chuxing, Donald Trump, driverless car, Elon Musk, Erlich Bachman, gig economy, Golden Gate Park, Google X / Alphabet X, hustle culture, independent contractor, information retrieval, Jeff Bezos, John Zimmer (Lyft cofounder), Lyft, Marc Andreessen, Mark Zuckerberg, megacity, Menlo Park, multilevel marketing, new economy, pattern recognition, price mechanism, public intellectual, reality distortion field, ride hailing / ride sharing, Salesforce, San Francisco homelessness, Sand Hill Road, self-driving car, side hustle, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, Skype, Snapchat, South of Market, San Francisco, sovereign wealth fund, statistical model, Steve Jobs, super pumped, TaskRabbit, tech worker, Tony Hsieh, transportation-network company, Travis Kalanick, turn-by-turn navigation, Uber and Lyft, Uber for X, uber lyft, ubercab, young professional

By the end of 2016, Uber had raised more than $17 billion, including more than $2 billion of debt. Where once Uber could place representatives from all its venture-capital backers around a conference-room table, now scores of investment groups held stakes, ranging from hedge fund and private-equity firms to mutual funds and sovereign wealth funds. For two of its most formative years, from 2013 to 2015, the company’s chief financial officer was Brent Callinicos, a veteran finance executive who had spent years at Microsoft and then Google. He abruptly stepped down in early 2015, leaving Uber with a team of thirtysomething-year-old former Goldman Sachs bankers in charge of finance and fund-raising.


pages: 276 words: 59,165

Impact: Reshaping Capitalism to Drive Real Change by Ronald Cohen

"World Economic Forum" Davos, asset allocation, benefit corporation, biodiversity loss, carbon footprint, carbon tax, circular economy, commoditize, corporate governance, corporate social responsibility, crowdsourcing, decarbonisation, diversification, driverless car, Elon Musk, family office, financial independence, financial innovation, full employment, high net worth, housing crisis, impact investing, income inequality, invisible hand, Kickstarter, lockdown, Mark Zuckerberg, microbiome, minimum viable product, moral hazard, performance metric, risk-adjusted returns, risk/return, Silicon Valley, sovereign wealth fund, Steve Ballmer, Steve Jobs, tech worker, TED Talk, The Wealth of Nations by Adam Smith, transaction costs, zero-sum game

McConnell Family Foundation 144 Karboul, Dr Amel 137 Kassoy, Andrew 108 KETOS 53–4 Keynes, John Maynard 114, 185 Kickstarter 57 Kind 90 Kirklees Council 127 KKR 81 Kleissner, Charly 145–6 Kleissner, Lisa 145–6 KL Felicitas Foundation 145–6 Klop, Piet 73 KLP (pension fund) 74 Knorr 91 Kogiso, Mari 144 Komolafe, Tolulope 47, 49–50 Kopp, Wendy 59–60 Korea Inclusive Finance Agency 176 Korea Small and Medium Business Corporation (SBC) 176 Korea Social Enterprise Promotion Agency (KoSEA) 176 Kresge Foundation 127, 144, 153 Kubzansky, Mike 148 Kuper, Andy 83 Labour Party 19, 160, 179 laissez-faire economics 185 Large Outcome Funds 138 LeapFrog Investments 83 Learn Capital 49 leather waste 54–5 LED lightbulbs 106 Lego 90 Le Houérou, Philippe 69 Liberian Educational Advancement Program (LEAP), The 137 Liedtke, Eric 103 Life Chances Fund (LCF) 26, 165 life insurance 71 Lipton 91 Livelihoods Fund for Family Farming 95 Livox 42 Lloyds Bank 169 local government 26, 125–6 London Stock Exchange 19 Lööf, Torbjörn 104 Loop 102–3 MacArthur Foundation 151, 153 Machado, Antonio 180 Macron, Emmanuel 88 Maersk 76 malaria 37 Maltzahn, Geoffrey von 45–6 Mars 90, 95 MaRS Center for Impact Investing 171 Martin, Roger 138 Massachusetts Pathways to Economic Advancement SIB 127–8 Maude, Francis 160, 169 Maurer, Peter 133 Maycomb Capital 127 MAZE Mustard Seed Social Entrepreneurship Fund 144 Mazzucato, Mariana: The Entrepreneurial State 158 McGrath, Sir Harvey 170 McKinsey 65, 71 Mercedes 112 Merck & Co 150 Merrill Lynch 81 MESIS 159 microbiology 45 microfinance 43–4, 80, 94, 145, 163 migration 1, 2, 16, 98–9, 127–8, 144, 163 millennials 65, 81, 92, 188 Miller, Clara 139, 145 Minett, Helen 127 Ministry of Justice 21, 26–7 mission-related investment (MRI) 142–3, 202 Mizuno, Hiro 78 MN (pension fund) 73 Mobileye 40 Morgan Stanley 81–2 MSCI Japan Empowering Women Index (WIN) 78–9 MSCI Japan ESG Select Leaders Index 78–9 Musk, Elon 55–6 mutual funds 95 MyEye 2 40 Nadosy, Peter 142 Nassara, Ibrahim 52–3 Nathan Cummings Foundation 145 National Employment Savings Trust (NEST) 74–5 National Health Service (NHS) 126 NaturALL Bottle Alliance 91 Nazid Impact Food 50, 53 neoliberalism 152, 185 Nestlé 90, 91 Neudorfer, Yaron 163 Newborough, Philip 18 Nike 90 Ninomiya Sontoku 78 non-financial information statement (NFIS) 159 Non-Profit Finance Fund 120 non-profit sector 25 NovESS 159, 175–6 Novogratz, Jacqueline 84 O’Donohoe, Nick 169, 170 Office for Civil Society 160 Office of Social Innovation and Civic Participation, US 141 Omidyar Network 48, 49, 136, 146–8, 151, 153 Omidyar, Pamela 146 Omidyar, Pierre 146–8 100 per cent Impact Network 146 One Service 123–4 OPIC (US DFI) 167 OrCam 39–41, 42 organic food 51, 96–7 Organization for Economic Co-operation and Development (OECD) 3, 70, 178 Origin Materials 91 Osberg, Sally 138 outcome-based contract 9, 22, 31, 126–7, 134, 137, 161, 163, 164, 165, 166, 180, 188, 189, 202–5 see also individual contract type outcome payers 22, 27, 123, 129, 133, 152, 163–4, 204–5 Outcome Fund 26–7, 130, 134–8, 148, 153, 156–7, 165–6, 167, 184, 187, 188, 203 Pacte Law, France 177 Page, Larry 55 Palandjian, Tracy 25 Palestine 163–4 Palestine Investment Fund 163–4 Palestine Telecommunications Company 163 Palestinian Authority 163 Palestinian Ministry of Finance 163 Palihapitiya, Chamath 83–4 Pardo, Ivan 89–90 Parley for the Oceans 102, 103 Partners Group 81 Passeport Avenir 163 Patagonia 36, 57 pay-for-outcomes model 128–9, 134, 152, 156–7, 167, 180, 192, 203 PayPal 44–5 Pension Danmark 74 pension funds/savings 62, 65, 70, 71, 72–9, 157–8, 170, 172, 173–5, 187, 202 PepsiCo 110–11 Pereira, Carlos Edmar 41–2 PET bottles 106 Peterborough SIB 8, 20–2, 23–4, 25, 26–7, 30, 123–4 PFS (Pay for Success) (SIB in US) 22, 204 Pfund, Nancy 83 PGGM (pension fund) 73 philanthropy, impact 9, 70, 118–53, 187–8 DIBs (Development Impact Bonds) and 130–5 endowment and 138–46, 173 future of impact investment and 152–3 impact measurement and 118–21 measuring impact in 120–1 new crop of foundations 146–52 Outcome Funds and 134–8, 203 SIBs (Social Impact Bonds) and 121–30, 205 Phillips, Andi 127 Pioneers French Impact 175–6 PlantBottle 91 plastic 90, 91, 92, 97, 101–3, 104 PME (Dutch pension fund) 73–4 pollution 5, 28, 66, 138, 154, 155 Polman, Paul 88, 90 Porter, Professor Michael 26, 92–3 portfolio diversification 13, 67 Portland Trust, The 163, 235 Portugal 7, 31, 144, 153, 158, 160–2, 171, 173 Portugal Inovação Social (PIS) 171 poverty 16, 69–70, 84, 95, 140, 156, 167–8, 171, 182, 205 PPL Therapeutics 15 Principles of Responsible Investment (PRIs) 32, 203 Prior, Cliff 170 Pripp-Kovac, Lena 105 prisoner reoffending rates/recidivism 8, 20–2, 23–4, 25, 30, 80, 123–4, 161, 166 private equity 1, 3, 13, 53, 67, 71, 80, 171, 191, 235 PROESUS 176 profit-with-purpose model 35–6, 148 program-related investments (PRIs) 142–3, 148, 203–4 Prudential Financial 127 public-private partnerships 137, 204 QuantumScape 149 Rajasthan, India 131–2 Ratan Tata 153 Rausing, Sigrid 19 Reclaim Fund 169 recycling 90, 91, 97, 101–3, 104, 105, 106, 113 Red Cross 133 Refugees United 147 regulation boosting supply of impact capital through changes in 172–5, 187 risk of future 65–6, 92, 159–60 repurposing items 54 Responsible Investment (RI) 63 retail investors 204 Revolution Foods 50, 51–2, 57 Revolution Growth fund 52 Riboud, Franck 94 Richmond, Kristin Groos 51, 52 Rikers Island, New York City 80 Rinaudo, Keller 37–9 Rise Fund 79 risk defined 13 lower level of in impact investing 65–6, 92 measuring 7, 13, 67–8 risk and return, model of 6, 13, 67, 84, 93, 114 risk-return-impact, triple helix of 6, 9, 12–14, 27, 31, 33, 35, 60, 65, 66, 68, 72, 79, 84, 85, 93, 109, 115, 154, 155, 157, 178, 180, 183, 186, 190, 192 robotics 37–8 Rockefeller Foundation 11, 23, 151, 153 Root Capital 84 Rothschild, Lord (Jacob) 153 Rottenberg, Linda 59 Rousseau, Jean-Jacques: The Social Contract 184 Royal Bank of Scotland 169 Royal Dutch Shell 76, 111 Rubin, Jerry 128, 129 Ryan, Paul 179 Saildrone 149 Sankaran, Meena 53–4 Sasakawa Peace Foundation (SPF) 144 Sass, Christina 47–8, 49 SBB (Social Benefit Bond) 22, 204 school meals 50–3 Schroders 64, 80 Second Bounce of the Ball, The (Cohen) 7 Securities Exchange Commission, US 117 Serafeim, George 29, 109, 114 shareholder activism 66 Shashua, Professor Amnon 40 Siroya, Shivani 42–5 Skoll Foundation 148–9 Skoll World Forum (2019), Oxford 152 Small Business Administration, US 171 smart water grid management 54 Smiley, Scotty 39–40 Smith, Adam: The Theory of Moral Sentiment 10, 185 The Wealth of Nations 10, 184–5 Social Capital 83–4 social entrepreneurship 58, 82, 144, 175–7 Social Finance v, 19–20, 22, 23, 25, 26, 235 Social Finance Israel 163 Social Finance US 26, 127, 148 Social Impact Accelerator (SIA), EU 176–7 Social Impact Bond (SIB) 6, 8, 20–8, 67, 78, 80, 179, 198, 204–5 global spread of 25–8, 124–30 government and 122–4, 125, 126, 127, 130, 133, 157, 162–4, 165, 173 origins of 8, 20–5, 123–4 outlined 22–5 philanthropy and 121–30, 133–4, 135, 137, 138, 153, 187–8 Social Impact Contract 22, 162–3, 204 Social Impact Measurement Initiative (SIMI) 159 Social Impact Partnerships to Pay for Results Act (SIPPRA) (2018), US 165–6 social investment 7, 11–12, 141, 143, 160, 172–3, 179 social investment bank v, 19, 72, 76, 160, 169–70, 171–2, 175, 201 Social Investment Task Force (SITF) v, 6, 18, 19, 169, 235 Social Investment Tax Relief (SITR) 172–3 social pension funds 76 social prescribing 126 social service providers 22, 125, 130 Social Value Act (2012) 164 Social Value UK 162 solidarity funds, 90/10 75–6, 173–4, 187, 204, 205 Solomon, Sir Harry 163 South Korea 158, 160–1, 171, 176 sovereign wealth funds 70 Spark Capital 49 Starr, Megan 81 State of the Non-Profit Sector Survey 119–20 Straw, Jack 20–1 Subramanian, Savita 115 subscription services 105 Summers, Larry 6, 26 Sure 90 Sustainability Accounting Standards Board (SASB), The 108 Swensen, David 65–6 Tala 43–5 Task Force on Climate-Related Financial Disclosures (TCFD) 107 Tata Trusts 153 taxation 31, 36, 65, 66, 92, 141, 143, 154, 157, 158, 168, 172–5, 177, 185 Teach For America 58–9 Tech revolution 5, 7, 9, 13, 14–17, 35, 61, 138, 156, 178, 182, 189 Tesla 55–6, 83, 149 thermoplastic polyurethane (TPU) 102–3 Thompson, Mark 75 Tobey, Kirsten Saenz 51, 52 TOMS shoes 36, 54 Toniic 146 TPG 79, 80–1 trans fat 113 Treasury Department, US 6, 25–6, 141, 166 Treasury, UK 6 Triodos Investment Management 83 Troubled Families program 164 UBS 44, 79–80, 81 Optimus Fund/Optimus Foundation 80, 132, 137 UK government 6, 19, 26, 27, 30–1, 136, 158, 160, 161, 162, 164, 165, 167, 169, 170, 172, 175, 179 Ulukaya, Hamdi 99–101 unclaimed assets v, 19, 157, 168–72, 198, 201, 205 unemployment vii, 2, 30, 52, 100, 123, 124, 156, 164, 170 unicorn 35, 188–9 Unilever 89, 90–1 Unit Cost Database 1, 161 United Nations 32 Sustainable Development Goals (SDGs) 69–72, 73, 74, 78, 79, 85, 97, 104, 108, 131, 166, 174, 190–2, 205 United States 113 benefit corporation and 57 government 157, 158, 165–6, 167, 171, 177, 178, 179 pension funds in 76 PFS (pay for success) in 22, 80, 124, 204 philanthropy in 118, 119–20, 127, 129, 140–1, 143, 148, 149, 152 Social Finance US 26, 127, 148 US Agency for International Development (USAID) 167, 168 US Trust 65 venture capital 1, 2, 5, 7, 13, 14–16, 18, 20, 32, 35, 39, 49, 67, 71, 83, 138, 148, 157–8, 172, 175, 176, 178, 191, 205, 235 Village Enterprise DIB 167–8 Vir Biotechnology 150 Walker, Darren 140, 141, 142, 143 Wall Street Crash (1929) 116–17, 158–9 Warby Parker 36, 57 water usage 53, 54, 69, 73, 84, 90–1, 100, 106, 110–11, 112, 116, 205 Wesling, Kresse 55 WhiteWave 96–7 wholesalers, impact capital 168–72, 184, 201 World Bank 64, 68–9, 78, 163 World Benchmarking Alliance 108 World Economic Forum: International Business Council 108 Yad Hanadiv 153 Yale University 65–6 Yates, Shannon 44 Young, Todd 179 Yunus, Muhammad 94 Zipline 37–9, 42 Zuckerberg, Mark 48–9, 55, 151 THIS IS JUST THE BEGINNING Find us online and join the conversation Follow us on Twitter twitter.com/penguinukbooks Like us on Facebook facebook.com/penguinbooks Share the love on Instagram instagram.com/penguinukbooks Watch our authors on YouTube youtube.com/penguinbooks Pin Penguin books to your Pinterest pinterest.com/penguinukbooks Listen to audiobook clips at soundcloud.com/penguin-books Find out more about the author and discover your next read at penguin.co.uk This ebook is copyright material and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased or as strictly permitted by applicable copyright law.


pages: 205 words: 61,903

Survival of the Richest: Escape Fantasies of the Tech Billionaires by Douglas Rushkoff

"World Economic Forum" Davos, 4chan, A Declaration of the Independence of Cyberspace, agricultural Revolution, Airbnb, Alan Greenspan, Amazon Mechanical Turk, Amazon Web Services, Andrew Keen, AOL-Time Warner, artificial general intelligence, augmented reality, autonomous vehicles, basic income, behavioural economics, Big Tech, biodiversity loss, Biosphere 2, bitcoin, blockchain, Boston Dynamics, Burning Man, buy low sell high, Californian Ideology, carbon credits, carbon footprint, circular economy, clean water, cognitive dissonance, Colonization of Mars, coronavirus, COVID-19, creative destruction, Credit Default Swap, CRISPR, data science, David Graeber, DeepMind, degrowth, Demis Hassabis, deplatforming, digital capitalism, digital map, disinformation, Donald Trump, Elon Musk, en.wikipedia.org, energy transition, Ethereum, ethereum blockchain, European colonialism, Evgeny Morozov, Extinction Rebellion, Fairphone, fake news, Filter Bubble, game design, gamification, gig economy, Gini coefficient, global pandemic, Google bus, green new deal, Greta Thunberg, Haight Ashbury, hockey-stick growth, Howard Rheingold, if you build it, they will come, impact investing, income inequality, independent contractor, Jane Jacobs, Jeff Bezos, Jeffrey Epstein, job automation, John Nash: game theory, John Perry Barlow, Joseph Schumpeter, Just-in-time delivery, liberal capitalism, Mark Zuckerberg, Marshall McLuhan, mass immigration, megaproject, meme stock, mental accounting, Michael Milken, microplastics / micro fibres, military-industrial complex, Minecraft, mirror neurons, move fast and break things, Naomi Klein, New Urbanism, Norbert Wiener, Oculus Rift, One Laptop per Child (OLPC), operational security, Patri Friedman, pattern recognition, Peter Thiel, planetary scale, Plato's cave, Ponzi scheme, profit motive, QAnon, RAND corporation, Ray Kurzweil, rent-seeking, Richard Thaler, ride hailing / ride sharing, Robinhood: mobile stock trading app, Sam Altman, Shoshana Zuboff, Silicon Valley, Silicon Valley billionaire, SimCity, Singularitarianism, Skinner box, Snapchat, sovereign wealth fund, Stephen Hawking, Steve Bannon, Steve Jobs, Steven Levy, Steven Pinker, Stewart Brand, surveillance capitalism, tech billionaire, tech bro, technological solutionism, technoutopianism, Ted Nelson, TED Talk, the medium is the message, theory of mind, TikTok, Torches of Freedom, Tragedy of the Commons, universal basic income, urban renewal, warehouse robotics, We are as Gods, WeWork, Whole Earth Catalog, work culture , working poor

It’s meta , and once things go meta, they tend to keep on going that way. Land becomes property, property becomes mortgages, mortgages become derivatives, and so on. Abstracted properties can be bought and sold by people across an ocean—like those empty mega-luxury apartments in Manhattan owned by speculators and sovereign wealth funds. They may as well be stock certificates. At each level of abstraction, a new population of owners, bankers, or speculators arrives to stake its ever more leveraged claim on whatever core asset exists on the ground. Going meta is the American way, and a foundational premise of The Mindset.


pages: 554 words: 168,114

Oil: Money, Politics, and Power in the 21st Century by Tom Bower

"World Economic Forum" Davos, addicted to oil, Alan Greenspan, An Inconvenient Truth, Ayatollah Khomeini, banking crisis, bonus culture, California energy crisis, corporate governance, credit crunch, energy security, Exxon Valdez, falling living standards, fear of failure, financial engineering, forensic accounting, Global Witness, index fund, interest rate swap, John Deuss, Korean Air Lines Flight 007, kremlinology, land bank, LNG terminal, Long Term Capital Management, margin call, megaproject, Meghnad Desai, Mikhail Gorbachev, millennium bug, MITM: man-in-the-middle, Nelson Mandela, new economy, North Sea oil, offshore financial centre, oil shale / tar sands, oil shock, Oscar Wyatt, passive investing, peak oil, Piper Alpha, price mechanism, price stability, Ronald Reagan, shareholder value, short selling, Silicon Valley, sovereign wealth fund, transaction costs, transfer pricing, zero-sum game, éminence grise

Relishing their power to make more money by producing less, the national oil companies celebrated each cent added to the oil price, calculating the additional billions of dollars deposited in their treasuries. For the Gulf states, where production of a barrel of crude cost $2 in Saudi Arabia and at most $5 elsewhere, the daily windfall was enormous. Since oil had risen above $20, at least an additional $3 trillion had passed from consumers to the producers. The enhancement of the sovereign wealth funds was matched by the decline of the oil majors, although Tillerson’s gesture at the company’s staff Christmas party disguised any hint of shrinkage. The ground floor of the headquarters in Irving was covered with artificial snow, imported reindeer were tethered along the drive and the hospitality was uncommonly generous, reflecting record profits from high prices.

The Washington Post would report that the CFTC had noted that Vitol, which boasted an annual $147 billion turnover, had traded contracts for 57.7 million barrels by June 2008, three times the USA’s daily needs, and at one point in July held a huge 11 percent of the futures market. Vitol stated that it was “not in the business of taking large positions speculating on the rise or fall of market prices,” but others were unsure. Many in Congress regarded Vitol’s activity as speculation rather than trading. “It’s dirty hedge money and even dirtier sovereign wealth funds,” suspected Ed Morse, the senior oil analyst at Lehman’s. Russians and Arabs were assumed to be playing the markets by taking a position and then releasing price-sensitive rumors to move the market in a profitable direction. Commodity markets throughout history had experienced periods of boom and bust, but no oil trader had ever witnessed the sheer weight of money now being bet on oil.


pages: 566 words: 163,322

The Rise and Fall of Nations: Forces of Change in the Post-Crisis World by Ruchir Sharma

"World Economic Forum" Davos, Asian financial crisis, backtesting, bank run, banking crisis, Berlin Wall, Bernie Sanders, BRICs, business climate, business cycle, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, colonial rule, commodity super cycle, corporate governance, creative destruction, crony capitalism, currency peg, dark matter, debt deflation, deglobalization, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, driverless car, Edward Glaeser, Elon Musk, eurozone crisis, failed state, Fall of the Berlin Wall, falling living standards, financial engineering, Francis Fukuyama: the end of history, Freestyle chess, Gini coefficient, global macro, Goodhart's law, guns versus butter model, hiring and firing, hype cycle, income inequality, indoor plumbing, industrial robot, inflation targeting, Internet of things, Japanese asset price bubble, Jeff Bezos, job automation, John Markoff, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, Larry Ellison, lateral thinking, liberal capitalism, low interest rates, Malacca Straits, Mark Zuckerberg, market bubble, Mary Meeker, mass immigration, megacity, megaproject, Mexican peso crisis / tequila crisis, middle-income trap, military-industrial complex, mittelstand, moral hazard, New Economic Geography, North Sea oil, oil rush, oil shale / tar sands, oil shock, open immigration, pattern recognition, Paul Samuelson, Peter Thiel, pets.com, plutocrats, Ponzi scheme, price stability, Productivity paradox, purchasing power parity, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Simon Kuznets, smart cities, Snapchat, South China Sea, sovereign wealth fund, special economic zone, spectrum auction, Steve Jobs, tacit knowledge, tech billionaire, The Future of Employment, The Wisdom of Crowds, Thomas Malthus, total factor productivity, trade liberalization, trade route, tulip mania, Tyler Cowen: Great Stagnation, unorthodox policies, Washington Consensus, WikiLeaks, women in the workforce, work culture , working-age population

It is a common perception that the large shifts in money flows that can cause currency crises are dictated by global players, many of whom emerged on the international scene during the recent decades of go-go globalization. The most powerful among these players are hedge fund moguls, fund managers at various investment firms, sovereign wealth funds that invest the oil profits of petro-states like Saudi Arabia, and pension funds that handle savings for hundreds of millions of working people all over the world. A certain conspiratorial aura prevails around some of these “secretive” new agents of finance. They are often cast as all-seeing eyes—somewhat the way many countries view the CIA—with sources on the ground and technology in the ether that allow them to shape events and outfox rival investors in far corners of the world.

After Jonathan took power in 2010, those reserves were slowly drained from $50 billion to $33 billion, despite growing revenue from rising oil prices. When the oil price boom ended in 2014, Nigeria was left with dangerously low foreign reserves. By 2015 most large oil exporting nations had combined savings, stored in foreign exchange reserves and sovereign wealth funds, which at least matched the size of the economy. In Nigeria those savings had fallen to 8 percent of GDP. Much of this shortfall was due to theft, and the result is that Nigeria now has enough savings to cover its looming budget deficits for barely more than a year. A former general, Buhari came in promising to attack corruption and the terrorist rebels of Boko Haram, and both of those moves are vital to creating a foundation of trust and security in the economy.


pages: 726 words: 172,988

The Bankers' New Clothes: What's Wrong With Banking and What to Do About It by Anat Admati, Martin Hellwig

Alan Greenspan, Andrei Shleifer, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, bonus culture, book value, break the buck, business cycle, Carmen Reinhart, central bank independence, centralized clearinghouse, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, diversified portfolio, en.wikipedia.org, Exxon Valdez, financial deregulation, financial engineering, financial innovation, financial intermediation, fixed income, George Akerlof, Glass-Steagall Act, Growth in a Time of Debt, income inequality, information asymmetry, invisible hand, Jean Tirole, joint-stock company, joint-stock limited liability company, junk bonds, Kenneth Rogoff, Larry Wall, light touch regulation, London Interbank Offered Rate, Long Term Capital Management, margin call, Martin Wolf, Money creation, money market fund, moral hazard, mortgage debt, mortgage tax deduction, negative equity, Nick Leeson, Northern Rock, open economy, Paul Volcker talking about ATMs, peer-to-peer lending, proprietary trading, regulatory arbitrage, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Satyajit Das, Savings and loan crisis, shareholder value, sovereign wealth fund, subprime mortgage crisis, technology bubble, The Market for Lemons, the payments system, too big to fail, Upton Sinclair, Yogi Berra

Banks operating under Basel II, which included banks in Europe and U.S. investment banks, found many creative ways to have very high leverage and to evade the requirements by shifting risks to others or hiding them behind flawed risk models or misleading credit ratings.54 When the financial crisis began in 2007, the equity of some of the major financial institutions worldwide was 2 or 3 percent of their total assets. The fact that these margins of safety were so thin played a major role in the crisis.55 For example, without help from the Singapore Sovereign Wealth Fund and from the Swiss government, the Swiss bank UBS would have become insolvent, destroyed by losses from mortgage-backed securities and related derivatives that had been treated as riskless.56 In the aftermath of the crisis, regulators set out to strengthen capital regulation. Although the resulting accord, “Basel III,” eliminates some abuses, it fails to address the basic problem that banks can easily game the regulation.

., 330n17 Shleifer, Andrei, 277n13 short-term debt of banks: as beneficial to economy, 231n14; claimed disciplining effect of, 164, 301n56, 317n83; as factor in financial crisis of 2007-2009, 66, 164–65, 238n46; interest rates on, 138, 251n25, 281n10; liquidity problems in, 39–40, 63; in maturity transformation, 158–59; money market funds and, 62–63, 67; net stable funding ratio and, 272n42; safety nets for, 93 SIFIs. See systemically important financial institutions silent participations, 315n79, 319n8 Silver-Greenberg, Jessica, 244n6, 264n66 Sinclair, Upton, 115, 116 Singapore Sovereign Wealth Fund, 96 Singer, Paul, 327n65 Singh, Manmohan, 301n55, 317n88 single-counterparty credit limit proposal, 268n24 Sinn, Hans-Werner, 233n19, 238n47, 323n39 SIVs. See structured investment vehicles size of banking sector: excess capacity in, 172, 202, 293n5, 304nn17–18; ideal, 182–83, 335n48; need for reductions in, 176, 182–83 size of banks: efficient scale for, 50–51, 89, 144, 270n31, 290n29; higher capital requirements and, 221, 335n48; impact of subsidies on, 89, 130, 144, 270n31; as largest companies in world, 89, 269n29; as percentage of GDP, 238n49; regulatory restrictions on, 89, 270n33.


pages: 253 words: 65,834

Mastering the VC Game: A Venture Capital Insider Reveals How to Get From Start-Up to IPO on Your Terms by Jeffrey Bussgang

business cycle, business process, carried interest, deal flow, digital map, discounted cash flows, do well by doing good, hiring and firing, It's morning again in America, Jeff Bezos, Kickstarter, Marc Andreessen, Mark Zuckerberg, Menlo Park, moveable type in China, pattern recognition, Paul Graham, performance metric, Peter Thiel, pets.com, public intellectual, risk tolerance, rolodex, Ronald Reagan, Sand Hill Road, selection bias, shareholder value, Silicon Valley, Skype, software as a service, sovereign wealth fund, Steve Jobs, Steve Jurvetson, technology bubble, The Wisdom of Crowds

Every three to four years, when the venture capital firm is raising a new fund, the partners dash around the country (and sometimes the world) catching up with their LPs, presenting the performance of their portfolio, updating them on any strategy or personnel changes, and then asking again to invest their money in this risky asset class. There are numerous types of limited partners, including:Endowments, e.g., universities such as Harvard, Yale, or Stanford Public Pension Funds, e.g., state pension funds, such as the California pension fund, CALPERS Corporate Pension Funds, e.g., IBM’s pension fund Sovereign Wealth Funds, e.g., the government of Singapore’s investment arm Wealthy Families, e.g., the Rockefeller family’s investment fund Funds of Funds, e.g., special-purpose funds that are created to provide smaller institutions and families the scale to get into top-tier firms—such as Knightsbridge Advisers and FLAG Ventures Dave Swensen, the well-regarded head of the Yale endowment and author of Unconventional Success: A Fundamental Approach to Personal Investment, is famous for pointing out that VC returns are highly dependent on which individual firm you invest in.


pages: 257 words: 71,686

Swimming With Sharks: My Journey into the World of the Bankers by Joris Luyendijk

activist fund / activist shareholder / activist investor, bank run, barriers to entry, Bonfire of the Vanities, bonus culture, collapse of Lehman Brothers, collective bargaining, corporate raider, credit crunch, Credit Default Swap, Emanuel Derman, financial deregulation, financial independence, Flash crash, glass ceiling, Gordon Gekko, high net worth, hiring and firing, information asymmetry, inventory management, job-hopping, Large Hadron Collider, light touch regulation, London Whale, Money creation, Nick Leeson, offshore financial centre, regulatory arbitrage, Satyajit Das, selection bias, shareholder value, sovereign wealth fund, the payments system, too big to fail

Suppose, Smith wrote, that you buy a can of tuna to find that it contains dog food. What a nasty surprise, did the label on the can not say tuna? You turn to the legal document that came with the tuna and there it says ‘can also contain dog food’. The governments of Italy and Greece, the Libyan sovereign wealth fund, the American state of Alabama and ‘countless other endowments and foundations’ … over the past years all of them discovered dog food in their Goldman Sachs-made can of tuna, Smith wrote. This is immensely profitable, he added, especially with the category of clients Smith described as those ‘Who Don’t Know How to Ask Questions’.


pages: 233 words: 64,702

China's Disruptors: How Alibaba, Xiaomi, Tencent, and Other Companies Are Changing the Rules of Business by Edward Tse

3D printing, Airbnb, Airbus A320, Asian financial crisis, barriers to entry, bilateral investment treaty, business process, capital controls, commoditize, conceptual framework, corporate governance, creative destruction, crowdsourcing, currency manipulation / currency intervention, David Graeber, Deng Xiaoping, disruptive innovation, experimental economics, global supply chain, global value chain, Great Leap Forward, high net worth, high-speed rail, household responsibility system, industrial robot, Joseph Schumpeter, Lyft, Masayoshi Son, middle-income trap, money market fund, offshore financial centre, Pearl River Delta, reshoring, rising living standards, risk tolerance, Silicon Valley, Skype, Snapchat, SoftBank, sovereign wealth fund, special economic zone, speech recognition, Steve Jobs, thinkpad, trade route, wealth creators, working-age population

Significantly, each meeting is also attended by senior central and provincial government officials, figures such as Jiang Jianqing, the chairman of ICBC, China’s largest state-owned bank; Liu Mingkang, the former chairman of the China Banking Regulatory Commission; and Ding Xuedong, the head of China Investment Corporation, the country’s sovereign wealth fund. Most discussions at Yabuli center on business and economic issues. But since the start, broader themes have also consistently been broached: the damage China’s development has done to its natural environment, the broader responsibilities entrepreneurs have toward society, or, as in Wang’s case, the nature of the changes China is undergoing and where they might lead.


pages: 281 words: 69,107

Belt and Road: A Chinese World Order by Bruno Maçães

"World Economic Forum" Davos, active measures, Admiral Zheng, autonomous vehicles, Branko Milanovic, BRICs, cloud computing, deindustrialization, demographic dividend, Deng Xiaoping, different worldview, Donald Trump, energy security, European colonialism, eurozone crisis, export processing zone, Francis Fukuyama: the end of history, global supply chain, global value chain, high-speed rail, industrial cluster, industrial robot, Internet of things, Kenneth Rogoff, land reform, liberal world order, Malacca Straits, middle-income trap, one-China policy, Pearl River Delta, public intellectual, smart cities, South China Sea, sovereign wealth fund, special economic zone, subprime mortgage crisis, trade liberalization, trade route, zero-sum game

The state remains firmly in charge of the financial system, being able to redirect immense financial resources to pursue its policy objectives when that is deemed useful or necessary. Although the largest commercial banks are prompted to compete against each other, they remain under state control. By operating as the state’s bailout fund for the financial system, Central Huijin—a subsidiary of China’s sovereign wealth fund—has become the largest shareholder in the main commercial banks. As a result, it holds the reins of the vital credit channels linking the financial system to the booming—and nominally independent—private sector. Wang Yingyao shows that since the mid-1990s the Chinese state has “refashioned itself as a shareholder and institutional investor in the economy and resorted to financial means to manage its ownership, assets and public investments.”6 The state-owned banking system remains a critical instrument for managing development strategy, allocating credit to priority industries and projects, but the Chinese authorities know that they run the risk of exercising too much control over investment decisions at the expense of a more decentralized system for processing information, and one more clearly determined by a purely economic calculus.


pages: 232 words: 63,803

Billion Dollar Burger: Inside Big Tech's Race for the Future of Food by Chase Purdy

"World Economic Forum" Davos, agricultural Revolution, Big Tech, cognitive dissonance, corporate governance, Donald Trump, gig economy, global supply chain, Intergovernmental Panel on Climate Change (IPCC), Jeff Bezos, Marc Benioff, Paris climate accords, Peter Thiel, plant based meat, Salesforce, Silicon Valley, Silicon Valley startup, sovereign wealth fund, stealth mode startup, stem cell, Steve Jobs

Goldman Sachs Group in January 2018 pitched money into what ultimately wound up being a $65 million investment round for Ripple Foods, which makes a milk alternative with yellow peas. Impossible Foods, the maker of the plant-based Impossible Burger, has funding from UBS, Bill Gates, Singapore’s sovereign wealth fund, and one of JUST’s initial investors, Khosla Ventures. Tyson Foods, Cargill, and Richard Branson have invested in Memphis Meats, in which Kerr’s group had already invested. It’s an uncommon situation. Big Money and vegan activism have collided and have found a common rhythm. A purpose to drive mutual benefit.


pages: 232 words: 70,835

A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan by Ben Carlson

Albert Einstein, asset allocation, backtesting, Bernie Madoff, Black Monday: stock market crash in 1987, Black Swan, book value, business cycle, buy and hold, buy low sell high, commodity super cycle, corporate governance, delayed gratification, discounted cash flows, diversification, diversified portfolio, do what you love, endowment effect, family office, financial independence, fixed income, Gordon Gekko, high net worth, index fund, John Bogle, junk bonds, loss aversion, market bubble, medical residency, Occam's razor, paper trading, passive investing, Ponzi scheme, price anchoring, Reminiscences of a Stock Operator, Richard Thaler, risk tolerance, Robert Shiller, robo advisor, South Sea Bubble, sovereign wealth fund, stocks for the long run, technology bubble, Ted Nelson, transaction costs, Vanguard fund, Vilfredo Pareto

Fifty years ago, the little guy controlled the stock market, as individuals made up more than 90 percent of trading volume on the New York Stock Exchange. Today those roles are reversed, as institutions handle more than 95 percent of all trades in listed stocks while trading almost 100 percent of all other investable securities. Institutional investors such as pension funds, endowments, foundations, sovereign wealth funds, and wealthy family offices have trillions of dollars at their disposal to invest.3 Warren Buffett is probably the most well-known investor to the average guy or gal on the street. Not as many individual investors know who David Swensen is. Swensen is Warren Buffett in the world of institutional money management.


pages: 593 words: 189,857

Stress Test: Reflections on Financial Crises by Timothy F. Geithner

Affordable Care Act / Obamacare, Alan Greenspan, asset-backed security, Atul Gawande, bank run, banking crisis, Basel III, Bear Stearns, Bernie Madoff, Bernie Sanders, Black Monday: stock market crash in 1987, break the buck, Buckminster Fuller, Carmen Reinhart, central bank independence, collateralized debt obligation, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency risk, David Brooks, Doomsday Book, eurozone crisis, fear index, financial engineering, financial innovation, Flash crash, Goldman Sachs: Vampire Squid, Greenspan put, housing crisis, Hyman Minsky, illegal immigration, implied volatility, Kickstarter, London Interbank Offered Rate, Long Term Capital Management, low interest rates, margin call, market fundamentalism, Martin Wolf, McMansion, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mortgage debt, Nate Silver, negative equity, Northern Rock, obamacare, paradox of thrift, pets.com, price stability, profit maximization, proprietary trading, pushing on a string, quantitative easing, race to the bottom, RAND corporation, regulatory arbitrage, reserve currency, Saturday Night Live, Savings and loan crisis, savings glut, selection bias, Sheryl Sandberg, short selling, sovereign wealth fund, stock buybacks, tail risk, The Great Moderation, The Signal and the Noise by Nate Silver, Tobin tax, too big to fail, working poor

It would be unfair to the relatively strong, and it would make investments in financial firms less attractive, which could make it harder for the entire system to raise more capital if conditions deteriorated. However, we did force Citi to reduce its dividend, which it had pledged not to do, and we told it to raise new capital. The bank managed to raise $20 billion over the next few months, mostly from sovereign wealth funds in the Middle East and Asia. Those funds, the last big sources of liquidity left in the markets, also injected capital into other struggling firms, including Merrill and Morgan Stanley. I believed then and still believe now that forcing banks to hold enough capital and liquidity to absorb significant losses is the best defense against future crises, the ultimate shock absorber.

Hank had just received a conflict-of-interest waiver to work on Goldman issues a few days earlier, while Wachovia CEO Bob Steel, another Goldman alum, had been one of Hank’s deputies at Treasury until a few months earlier. Nothing was working. John Mack talked to Pandit, but a Morgan Stanley merger with Citi would have raised similar drunks-in-a-ditch problems. China’s sovereign wealth fund explored an investment in Morgan Stanley, but the talks fell apart quickly. Mack told us the Japanese bank Mitsubishi UFJ was interested in a major investment, but Hank and I were skeptical. We told Mack he needed a faster, more enduring solution, and we pressured him to try Jamie again. Mack basically told us to let him do his job.


pages: 265 words: 74,941

The Great Reset: How the Post-Crash Economy Will Change the Way We Live and Work by Richard Florida

"World Economic Forum" Davos, Alan Greenspan, banking crisis, big-box store, bike sharing, blue-collar work, business cycle, car-free, carbon footprint, collapse of Lehman Brothers, company town, congestion charging, congestion pricing, creative destruction, deskilling, edge city, Edward Glaeser, falling living standards, financial engineering, financial innovation, Ford paid five dollars a day, high net worth, high-speed rail, Home mortgage interest deduction, housing crisis, if you build it, they will come, income inequality, indoor plumbing, interchangeable parts, invention of the telephone, Jane Jacobs, Joseph Schumpeter, knowledge economy, Lewis Mumford, low skilled workers, manufacturing employment, McMansion, megaproject, Menlo Park, Nate Silver, New Economic Geography, new economy, New Urbanism, oil shock, Own Your Own Home, pattern recognition, peak oil, Ponzi scheme, post-industrial society, postindustrial economy, reserve currency, Richard Florida, Robert Shiller, scientific management, secular stagnation, Silicon Valley, Silicon Valley startup, social intelligence, sovereign wealth fund, starchitect, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, total factor productivity, urban decay, urban planning, urban renewal, white flight, young professional, Zipcar

Peter Ford, “Will Asian Financial Centers Overtake Wall Street?,” Christian Science Monitor, October 10, 2008. 13. See “Today in Lehman Poaching: Barclays and UBS,” Wall Street Journal, October 8, 2008, retrieved from http://blogs.wsj.com/deals/2008/10/08/today-in-lehman-poaching-barclays-and-ubs; “China’s Sovereign Wealth Fund Seeking Talent,” Reuters, June 17, 2009, retrieved from http://money.cnn.com/2009/06/17/news/international/CIC_hiring.reut; “Wall Street’s Job Losses May be Asia’s Gain,” Reuters, Trading Places, September 19, 2008, retrieved from http://blogs.reuters.com/trading-places/2008/09/19/wall-street-job-losses-may-be-asias-gain; Gavin Finch and Poppy Trowbridge, “Nomura, Barclays Lure Bankers as Rivals Cut Jobs, Cap Bonuses,” Bloomberg, November 6, 2009, retrieved from www.bloomberg.com/apps/news?


pages: 232 words: 77,956

Private Island: Why Britain Now Belongs to Someone Else by James Meek

Affordable Care Act / Obamacare, Berlin Wall, business continuity plan, call centre, clean water, Deng Xiaoping, electricity market, Etonian, Ford Model T, gentrification, HESCO bastion, housing crisis, illegal immigration, land bank, Leo Hollis, Martin Wolf, medical bankruptcy, Mikhail Gorbachev, post-industrial society, pre–internet, price mechanism, Right to Buy, risk tolerance, road to serfdom, Ronald Reagan, Rubik’s Cube, Skype, sovereign wealth fund, vertical integration, Washington Consensus, working poor

What if interest rates go up, you can’t make the loan payments, and you have to sell, just when everybody else is trying to sell for the same reason, driving prices down further? Well, that’s bad news for the ultimate owners – but not for everyone. Look again at the identities of the Thames Thirteen. Apart from Macquarie, which is acting as the agent for another group of smaller institutional investors, and the two sovereign wealth funds, most have something in common: they’re investing on behalf of present and future pensioners, and are, or grew out of, pension funds set up for state workforces. The Queensland Investment Corporation began as the pension fund for Queensland state employees; State Super caters for New South Wales civil servants.


The Handbook of Personal Wealth Management by Reuvid, Jonathan.

asset allocation, banking crisis, BRICs, business cycle, buy and hold, carbon credits, collapse of Lehman Brothers, correlation coefficient, credit crunch, cross-subsidies, currency risk, diversification, diversified portfolio, estate planning, financial deregulation, fixed income, global macro, high net worth, income per capita, index fund, interest rate swap, laissez-faire capitalism, land tenure, low interest rates, managed futures, market bubble, merger arbitrage, negative equity, new economy, Northern Rock, pattern recognition, Ponzi scheme, prediction markets, proprietary trading, Right to Buy, risk tolerance, risk-adjusted returns, risk/return, short selling, side project, sovereign wealth fund, statistical arbitrage, systematic trading, transaction costs, yield curve

Whilst there is pressure on rents there is, in most sub-sectors, no overdevelopment, so a rise in vacancy rates will not be substantial. Property fundamentals are still reasonably comfortable. There is a wall of equity raised by overseas funds to look at investing in European real estate. It has been widely publicized that US funds such as Carlyle, Blackstone and Apollo as well as several sovereign wealth funds have ________________________________________ UK COMMERCIAL PROPERTY REVIEW 67 ឣ raised equity and will be targeting Europe. With mainland Europe having seen capital values fall by less than in the UK so far, and in many cases with poorer occupier fundamentals, the first wave of this money is likely to target the UK.


pages: 276 words: 78,061

Worth Dying For: The Power and Politics of Flags by Tim Marshall

anti-communist, Ayatollah Khomeini, Berlin Wall, Black Lives Matter, British Empire, colonial rule, Donald Trump, drone strike, European colonialism, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, full employment, It's morning again in America, Johann Wolfgang von Goethe, Mahatma Gandhi, Malacca Straits, mass immigration, megacity, Neil Armstrong, Nelson Mandela, Ronald Reagan, sceptred isle, Scramble for Africa, South China Sea, sovereign wealth fund, trade route, white picket fence

It took until 1898 for Norway to be granted this right, and both the delay and necessity to campaign for it actually hastened the separation of Norway from Sweden in 1905. The Norwegians are now fiercely proud of their flag, country, currency and nationhood. That, and offshore oil and gas, which boost the world’s largest sovereign wealth fund, go a long way to explaining why it chose to remain outside the EU. Finland, meanwhile, was also under Swedish rule, from approximately 1150 right through to 1809, when Sweden was defeated by Russia in the Finnish War. It was then occupied by Russian troops, but whereas the previous masters had insisted that Swedish was the official language of Finland and that the administration of the country would be run from Sweden, the Russians allowed a greater deal of autonomy.


pages: 247 words: 78,961

The Return of Marco Polo's World: War, Strategy, and American Interests in the Twenty-First Century by Robert D. Kaplan

"World Economic Forum" Davos, Admiral Zheng, always be closing, California gold rush, collective bargaining, Deng Xiaoping, Donald Trump, Dr. Strangelove, failed state, Francis Fukuyama: the end of history, friendly fire, Great Leap Forward, Haight Ashbury, high-speed rail, kremlinology, load shedding, mass immigration, megacity, military-industrial complex, no-fly zone, oil-for-food scandal, one-China policy, Parag Khanna, Pax Mongolica, Ronald Reagan, South China Sea, sovereign wealth fund, the long tail, trade route, Westphalian system, Yom Kippur War

Take Saudi Arabia: a comparatively young and artificially drawn kingdom with no imperial legacy to draw upon, and with great regional differences between Najd and the Hejaz, whose water-starved population may double in a few decades, making it, in political terms, less and less coherent. Moreover, mainly because of the natural gas revolution in the United States, Saudi Arabia is no longer the global swing producer of hydrocarbons. Energy expert Daniel Yergin writes, “The new Saudi strategy is to use oil revenues to diversify the economy and build the world’s largest sovereign wealth fund as the investment engine for development.” The target, he writes, “is to increase non-oil government revenues at least sixfold by 2030.”*13 Nevertheless, even if the Kingdom achieves all or part of this goal—and that is very doubtful—it is safe to say that Saudi Arabia’s geopolitical power has, at best, peaked.


pages: 300 words: 77,787

Investing Demystified: How to Invest Without Speculation and Sleepless Nights by Lars Kroijer

Andrei Shleifer, asset allocation, asset-backed security, Bernie Madoff, bitcoin, Black Swan, BRICs, Carmen Reinhart, clean tech, compound rate of return, credit crunch, currency risk, diversification, diversified portfolio, equity premium, equity risk premium, estate planning, fixed income, high net worth, implied volatility, index fund, intangible asset, invisible hand, John Bogle, Kenneth Rogoff, low interest rates, market bubble, money market fund, passive investing, pattern recognition, prediction markets, risk tolerance, risk/return, Robert Shiller, selection bias, sovereign wealth fund, too big to fail, transaction costs, Vanguard fund, yield curve, zero-coupon bond

As a result the portfolio consist of companies like Apple, Exxon, Vodafone, PetroChina, General Electric, Nestlé, Google, IBM, Royal Dutch Shell, Petrobras, etc. While you also have some exposure to smaller companies in the broadest equity indices, the proportion of those stocks in the portfolio is far below what it would be in a portfolio of exclusively small- or medium-sized companies. Unless you have an investment portfolio the size of a sovereign wealth fund there should not be much of a liquidity concern with the world equity portfolio. Even if the values of your holding are dropping, you would be able to liquidate your portfolio in far less than a day without causing price movements. Likewise the liquidity of a rational portfolio that includes sub-AA rated government bonds and corporate bonds is very good.


The Fix: How Bankers Lied, Cheated and Colluded to Rig the World's Most Important Number (Bloomberg) by Liam Vaughan, Gavin Finch

Alan Greenspan, asset allocation, asset-backed security, bank run, banking crisis, Bear Stearns, Bernie Sanders, Big bang: deregulation of the City of London, buy low sell high, call centre, central bank independence, collapse of Lehman Brothers, corporate governance, credit crunch, Credit Default Swap, eurozone crisis, fear of failure, financial deregulation, financial innovation, fixed income, interest rate derivative, interest rate swap, Kickstarter, light touch regulation, London Interbank Offered Rate, London Whale, low interest rates, mortgage debt, Neil Armstrong, Northern Rock, performance metric, Ponzi scheme, Ronald Reagan, social intelligence, sovereign wealth fund, subprime mortgage crisis, urban sprawl

On Oct. 30, the day after Tucker’s call, Barclays’ three-month U.S. dollar Libor submission fell 60 basis points to 3.4 percent—the biggest one-day percentage fall in more than a month. The following day it went down another 20 basis points. The sterling figures followed a similar pattern. On Friday, Oct. 31, 2008, after another round of intense negotiations in Doha, Barclays announced it had secured a £7.3 billion capital injection from the Qataris and the Abu Dhabi sovereign wealth fund, assuring its independence.24 When the European Central Bank and the Bank of England slashed interest rates a week later, Libor plummeted across the board. The crisis had been averted. One individual raised concerns that what the bank was doing was wrong: Johnson, the veteran cash trader, who would later plead guilty to helping traders rig Libor by nudging the bank’s submissions up and down for years.25 In an e-mail to Barclays’s head of compliance, he wrote: “As per the telephonic communication today with Mark Dearlove.


pages: 935 words: 197,338

The Power Law: Venture Capital and the Making of the New Future by Sebastian Mallaby

"Susan Fowler" uber, 23andMe, 90 percent rule, Adam Neumann (WeWork), adjacent possible, Airbnb, Apple II, barriers to entry, Ben Horowitz, Benchmark Capital, Big Tech, bike sharing, Black Lives Matter, Blitzscaling, Bob Noyce, book value, business process, charter city, Chuck Templeton: OpenTable:, Clayton Christensen, clean tech, cloud computing, cognitive bias, collapse of Lehman Brothers, Colonization of Mars, computer vision, coronavirus, corporate governance, COVID-19, cryptocurrency, deal flow, Didi Chuxing, digital map, discounted cash flows, disruptive innovation, Donald Trump, Douglas Engelbart, driverless car, Dutch auction, Dynabook, Elon Musk, Fairchild Semiconductor, fake news, family office, financial engineering, future of work, game design, George Gilder, Greyball, guns versus butter model, Hacker Ethic, Henry Singleton, hiring and firing, Hyperloop, income inequality, industrial cluster, intangible asset, iterative process, Jeff Bezos, John Markoff, junk bonds, Kickstarter, knowledge economy, lateral thinking, liberal capitalism, Louis Pasteur, low interest rates, Lyft, Marc Andreessen, Mark Zuckerberg, market bubble, Marshall McLuhan, Mary Meeker, Masayoshi Son, Max Levchin, Metcalfe’s law, Michael Milken, microdosing, military-industrial complex, Mitch Kapor, mortgage debt, move fast and break things, Network effects, oil shock, PalmPilot, pattern recognition, Paul Graham, paypal mafia, Peter Thiel, plant based meat, plutocrats, power law, pre–internet, price mechanism, price stability, proprietary trading, prudent man rule, quantitative easing, radical decentralization, Recombinant DNA, remote working, ride hailing / ride sharing, risk tolerance, risk/return, Robert Metcalfe, ROLM, rolodex, Ronald Coase, Salesforce, Sam Altman, Sand Hill Road, self-driving car, shareholder value, side project, Silicon Valley, Silicon Valley startup, Skype, smart grid, SoftBank, software is eating the world, sovereign wealth fund, Startup school, Steve Jobs, Steve Wozniak, Steven Levy, super pumped, superconnector, survivorship bias, tech worker, Teledyne, the long tail, the new new thing, the strength of weak ties, TikTok, Travis Kalanick, two and twenty, Uber and Lyft, Uber for X, uber lyft, urban decay, UUNET, vertical integration, Vilfredo Pareto, Vision Fund, wealth creators, WeWork, William Shockley: the traitorous eight, Y Combinator, Zenefits

Borrowing an analogy from a game that he enjoyed, Gurley summed up the danger. The typical late-stage investor was “acting like a loose-aggressive player at a poker table.”[65] The following month, Kalanick fulfilled Gurley’s worst nightmares. He dispatched a fundraising lieutenant to pitch one of the loosest players of them all: Saudi Arabia’s $300 billion sovereign wealth fund. All Gurley could do was groan. A big capital raise from the Saudis would serve only to dilute Benchmark’s stake, and the money would disappear into the contest with Didi.[66] Now more than ever, fighting Didi seemed like a bad bet. By May 2016, the Chinese firm had a wide lead in its home market, and meanwhile it waltzed into Silicon Valley and raised $1 billion from Apple.

The truth is that standard venture capitalists were not the main villains: not at WeWork, not at Uber, and not at overmighty unicorns more generally. Between 2014 and 2016, more than three-quarters of late-stage venture funding in the United States came from nontraditional investors such as mutual funds, hedge funds, and sovereign wealth funds.[85] But that didn’t change the fact that the venture industry confronted a challenge: unicorn governance was broken. In his anguished essay of 2015, Gurley had pointed to the clearest fix: that unicorns should go public. A public listing would get rid of those distortive liquidation preferences that encouraged unicorn recklessness.


pages: 305 words: 79,356

Drowning in Oil: BP & the Reckless Pursuit of Profit by Loren C. Steffy

"World Economic Forum" Davos, Berlin Wall, clean water, corporate governance, corporate raider, Exxon Valdez, Fall of the Berlin Wall, North Sea oil, oil rush, oil shock, peak oil, Piper Alpha, Ronald Reagan, South China Sea, sovereign wealth fund, tech worker, Timothy McVeigh

Hayward traveled around the world, courting investments from foreign governments and winning assurances that they would vote against any buyout offers that BP might face because of its depressed stock price. He met with officials in Abu Dhabi to propose that the emirate buy 10 percent of BP’s shares, and he wooed investments from Kuwait, Qatar, and Singapore. With BP’s stock battered by the crisis, sovereign wealth funds suddenly started talking about buying double-digit stakes in BP. BP had signed a deal to drill off the Libyan coast, and Libya’s oil minister said he recommended that the country’s investment fund buy a stake in the company because “it’s a good opportunity for bargain hunters.”5 By the time Hayward returned to London and addressed shareholders on July 27, no oil had flowed into the Gulf for two weeks.


pages: 285 words: 81,743

Start-Up Nation: The Story of Israel's Economic Miracle by Dan Senor, Saul Singer

"World Economic Forum" Davos, agricultural Revolution, Albert Einstein, Apollo 11, Apollo 13, back-to-the-land, banking crisis, Benchmark Capital, Boycotts of Israel, call centre, Celtic Tiger, clean tech, Dissolution of the Soviet Union, Fairchild Semiconductor, friendly fire, Gene Kranz, immigration reform, labor-force participation, mass immigration, military-industrial complex, Neil Armstrong, new economy, pez dispenser, post scarcity, profit motive, Robert Solow, Silicon Valley, smart grid, social graph, sovereign wealth fund, Steve Ballmer, Suez crisis 1956, unit 8200, web application, women in the workforce, Yom Kippur War

But those racing cars crashed badly whereas the carts traveled more slowly and stayed on course.”1 This is the good news for Israel. Yet while Israel’s economy was not exposed to bad lending practices or complex credit products, it may be overexposed to venture finance, which could soon be in scarce supply. Venture capital firms are funded largely by institutional investors such as pension funds, endowments, and sovereign wealth funds. These investors set aside a specific allocation for what are called alternative investments (venture capital, private equity, hedge funds), typically in the range of 3 to 5 percent of their overall portfolios. But as the dollar value of their public equity (stock market) allocations has shrunk—due in large measure to crashing markets globally—it has shrunk the absolute dollar amount available for alternative investments.


pages: 301 words: 89,076

The Globotics Upheaval: Globalisation, Robotics and the Future of Work by Richard Baldwin

agricultural Revolution, Airbnb, AlphaGo, AltaVista, Amazon Web Services, Apollo 11, augmented reality, autonomous vehicles, basic income, Big Tech, bread and circuses, business process, business process outsourcing, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, commoditize, computer vision, Corn Laws, correlation does not imply causation, Credit Default Swap, data science, David Ricardo: comparative advantage, declining real wages, deep learning, DeepMind, deindustrialization, deskilling, Donald Trump, Douglas Hofstadter, Downton Abbey, Elon Musk, Erik Brynjolfsson, facts on the ground, Fairchild Semiconductor, future of journalism, future of work, George Gilder, Google Glasses, Google Hangouts, Hans Moravec, hiring and firing, hype cycle, impulse control, income inequality, industrial robot, intangible asset, Internet of things, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, Kevin Roose, knowledge worker, laissez-faire capitalism, Les Trente Glorieuses, low skilled workers, machine translation, Machine translation of "The spirit is willing, but the flesh is weak." to Russian and back, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, Metcalfe’s law, mirror neurons, new economy, optical character recognition, pattern recognition, Ponzi scheme, post-industrial society, post-work, profit motive, remote working, reshoring, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, robotic process automation, Ronald Reagan, Salesforce, San Francisco homelessness, Second Machine Age, self-driving car, side project, Silicon Valley, Skype, Snapchat, social intelligence, sovereign wealth fund, standardized shipping container, statistical model, Stephen Hawking, Steve Jobs, supply-chain management, systems thinking, TaskRabbit, telepresence, telepresence robot, telerobotics, Thomas Malthus, trade liberalization, universal basic income, warehouse automation

It will accelerate the trend toward telemigration. Think of standard telepresence as extremely good Skype—but so much better that it becomes a new experience. Telepresence makes it almost seem like people are in the same place even when they are not. I used it in spring 2017 to present my book, The Great Convergence, to the Norwegian sovereign wealth fund, Norges Bank Investment Management (NBIM). I was in London with a couple of analysts and connected via telepresence with another group of NBIM economists located in New York City and with yet a third group in Oslo. At first it seemed like nothing more than Skype with a really good screen.


pages: 310 words: 85,995

The Future of Capitalism: Facing the New Anxieties by Paul Collier

"Friedman doctrine" OR "shareholder theory", accounting loophole / creative accounting, Airbnb, An Inconvenient Truth, assortative mating, bank run, Bear Stearns, behavioural economics, Berlin Wall, Bernie Sanders, bitcoin, Bob Geldof, bonus culture, business cycle, call centre, central bank independence, centre right, commodity super cycle, computerized trading, corporate governance, creative destruction, cuban missile crisis, David Brooks, delayed gratification, deskilling, Donald Trump, eurozone crisis, fake news, financial deregulation, full employment, George Akerlof, Goldman Sachs: Vampire Squid, greed is good, income inequality, industrial cluster, information asymmetry, intangible asset, Jean Tirole, Jeremy Corbyn, job satisfaction, John Perry Barlow, Joseph Schumpeter, knowledge economy, late capitalism, loss aversion, Mark Zuckerberg, minimum wage unemployment, moral hazard, negative equity, New Urbanism, Northern Rock, offshore financial centre, out of africa, Peace of Westphalia, principal–agent problem, race to the bottom, rent control, rent-seeking, rising living standards, Robert Shiller, Robert Solow, Ronald Reagan, shareholder value, Silicon Valley, Silicon Valley ideology, sovereign wealth fund, The Wealth of Nations by Adam Smith, theory of mind, too big to fail, trade liberalization, urban planning, web of trust, zero-sum game

For decades, much of the capital flight out of Africa was facilitated by lawyers in London and banks in Switzerland. Similarly, the human capital exodus from Africa is an understandable response to public policies that create opportunities. To illustrate with an extreme example: Norway has accumulated a sovereign wealth fund worth $200,000 per person. If a family of five leaves its poor homeland and settles there, it gains an entitlement to a pro rata share of assets worth $1 million, over and above any income that the family members earn. The government of their homeland lacks any means of countering such an incentive to leave.


pages: 207 words: 86,639

The New Economics: A Bigger Picture by David Boyle, Andrew Simms

Abraham Maslow, Alan Greenspan, Alvin Toffler, Apollo 11, Asian financial crisis, back-to-the-land, banking crisis, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, Bretton Woods, capital controls, carbon footprint, carbon tax, clean water, collateralized debt obligation, colonial rule, Community Supported Agriculture, congestion charging, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Crossrail, delayed gratification, deskilling, digital divide, en.wikipedia.org, energy transition, financial deregulation, financial exclusion, financial innovation, full employment, garden city movement, Glass-Steagall Act, green new deal, happiness index / gross national happiness, if you build it, they will come, income inequality, informal economy, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Elkington, junk bonds, Kickstarter, land bank, land reform, light touch regulation, loss aversion, mega-rich, microcredit, Mikhail Gorbachev, Money creation, mortgage debt, neoliberal agenda, new economy, North Sea oil, Northern Rock, offshore financial centre, oil shock, peak oil, pension time bomb, pensions crisis, profit motive, purchasing power parity, quantitative easing, Ronald Reagan, seigniorage, Simon Kuznets, sovereign wealth fund, special drawing rights, systems thinking, the long tail, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trickle-down economics, Vilfredo Pareto, Washington Consensus, wealth creators, working-age population

Since then, as we know, the crisis accelerated until most of the investment banks on Wall Street had disappeared, and – spurred by the bankruptcy of Lehman Brothers – most of the banks in Europe and North America were forced to accept state bail outs and partial state control, or went cap in hand to the sovereign wealth funds in the Middle East, to avoid bankruptcy. The economic assumptions of the past generation lay in ruins, the advice provided by the best financial minds had been disastrous, and occasionally fraudulent, and the architecture that runs the world’s economies was broken beyond repair. The epicentre of the disaster on the ground was by then the city of Cleveland, Ohio, where one in ten homes was repossessed and vacant, nearly every street blighted by boarded up properties and street gangs.6 With one in five US mortgages now sub-prime, many of them facing major hikes in the repayment rate after two or three years, more than 2 million foreclosure proceedings began in the USA in 2007 alone, many of them against people sold mortgages where the terms and interest rates were misrepresented to them, which is what happens when products are believed to be risk free by those selling them.


pages: 268 words: 81,811

Flash Crash: A Trading Savant, a Global Manhunt, and the Most Mysterious Market Crash in History by Liam Vaughan

algorithmic trading, backtesting, bank run, barriers to entry, Bernie Madoff, Black Monday: stock market crash in 1987, Black Swan, Bob Geldof, centre right, collapse of Lehman Brothers, data science, Donald Trump, Elliott wave, eurozone crisis, family office, financial engineering, Flash crash, Great Grain Robbery, high net worth, High speed trading, information asymmetry, Jeff Bezos, Kickstarter, land bank, margin call, market design, market microstructure, Market Wizards by Jack D. Schwager, Navinder Sarao, Nick Leeson, offshore financial centre, pattern recognition, Ponzi scheme, proprietary trading, Ralph Nelson Elliott, Reminiscences of a Stock Operator, Ronald Reagan, selling pickaxes during a gold rush, sovereign wealth fund, spectrum auction, Stephen Hawking, the market place, Timothy McVeigh, Tobin tax, tulip mania, yield curve, zero-sum game

Afterward, they went for lunch by the river, where Garcia and Nav bonded over football while MacKinnon and Dupont gritted their teeth and Sawicki sweated through his suit. By the time the bill arrived, Nav had made up his mind to participate. Around the same time, however, a development back in London threatened to derail the deal before it got off the ground. One of the introducers at Garcia’s Mayfair presentation had convinced a sovereign wealth fund to invest hundreds of millions of pounds in the venture. Before signing contracts, the fund had hired a corporate investigator to carry out some due diligence, and, based on what it discovered, it had decided to walk away. The investigator had found a 2010 legal complaint filed in Florida in which both Garcia and IXE were accused by Mongolia’s central bank of participating in an elaborate scheme to rob it of more than $20 million.


pages: 263 words: 80,594

Stolen: How to Save the World From Financialisation by Grace Blakeley

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Basel III, basic income, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Big Tech, bitcoin, bond market vigilante , Bretton Woods, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, capitalist realism, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collective bargaining, corporate governance, corporate raider, credit crunch, Credit Default Swap, cryptocurrency, currency peg, David Graeber, debt deflation, decarbonisation, democratizing finance, Donald Trump, emotional labour, eurozone crisis, Extinction Rebellion, extractivism, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, fixed income, full employment, G4S, gender pay gap, gig economy, Gini coefficient, global reserve currency, global supply chain, green new deal, Greenspan put, housing crisis, Hyman Minsky, impact investing, income inequality, inflation targeting, Intergovernmental Panel on Climate Change (IPCC), Jeremy Corbyn, job polarisation, junk bonds, Kenneth Rogoff, Kickstarter, land value tax, light touch regulation, low interest rates, low skilled workers, market clearing, means of production, Modern Monetary Theory, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, neoliberal agenda, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, paradox of thrift, payday loans, pensions crisis, Phillips curve, Ponzi scheme, Post-Keynesian economics, post-war consensus, price mechanism, principal–agent problem, profit motive, quantitative easing, race to the bottom, regulatory arbitrage, reserve currency, Right to Buy, rising living standards, risk-adjusted returns, road to serfdom, Robert Solow, savings glut, secular stagnation, shareholder value, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, the built environment, The Great Moderation, too big to fail, transfer pricing, universal basic income, Winter of Discontent, working-age population, yield curve, zero-sum game

But instead, people ended up handing their savings over to the barons — the institutional investors previously prevented from directly engaging in trades themselves — who were able to extract large fees from their management of other peoples’ money.25 One can think of institutional investors as financial institutions sitting on huge piles of cash that they invest to make the largest possible return. These cash piles can come from ordinary people’s savings, as with pension funds, the savings of the wealthy, as with hedge funds, or even from states, as with sovereign wealth funds. Institutional investors can buy all sorts of financial securities — from bonds, to equities, to derivatives — as well as real assets like property. In 1963, individuals owned about 55% of publicly listed shares, whilst pension and insurance funds owned 6% and 10% respectively.26 By 1997, individual shareholdings had fallen to 17% of the value of total equity, whilst pension and insurance funds had risen to 22% and 23% respectively.


pages: 297 words: 84,447

The Star Builders: Nuclear Fusion and the Race to Power the Planet by Arthur Turrell

Albert Einstein, Arthur Eddington, autonomous vehicles, Boeing 747, Boris Johnson, carbon tax, coronavirus, COVID-19, data science, decarbonisation, deep learning, Donald Trump, Eddington experiment, energy security, energy transition, Ernest Rutherford, Extinction Rebellion, green new deal, Greta Thunberg, Higgs boson, Intergovernmental Panel on Climate Change (IPCC), ITER tokamak, Jeff Bezos, Kickstarter, Large Hadron Collider, lockdown, New Journalism, nuclear winter, Peter Thiel, planetary scale, precautionary principle, Project Plowshare, Silicon Valley, social distancing, sovereign wealth fund, statistical model, Stephen Hawking, Steve Bannon, TED Talk, The Rise and Fall of American Growth, Tunguska event

“Five years ago we went to Rolls-Royce and firms like that and said ‘can we work with you.’ ” At that time, the firms said no because they thought fusion was too early stage, he explained. “Now they’re coming to us and asking how they can win fusion contracts,” he continued. “You need the private sector for investment. A billion in the last ten years raised from private companies; venture capitalists, philanthropists, sovereign wealth funds, and, recently, energy companies: oil and gas firms.” Currently, the new star builders are behind the government laboratories in reaching a 100 percent energy gain from fusion. None have come close to JET’s fusion energy record, nor NIF’s best single-shot energy yield of 3 percent. Equally, they haven’t had decades to do fusion, or the same level of funding.


pages: 328 words: 84,682

The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power by Michael A. Cusumano, Annabelle Gawer, David B. Yoffie

activist fund / activist shareholder / activist investor, Airbnb, AltaVista, Amazon Web Services, AOL-Time Warner, asset light, augmented reality, autonomous vehicles, barriers to entry, bitcoin, blockchain, business logic, Cambridge Analytica, Chuck Templeton: OpenTable:, cloud computing, collective bargaining, commoditize, CRISPR, crowdsourcing, cryptocurrency, deep learning, Didi Chuxing, distributed ledger, Donald Trump, driverless car, en.wikipedia.org, fake news, Firefox, general purpose technology, gig economy, Google Chrome, GPS: selective availability, Greyball, independent contractor, Internet of things, Jeff Bezos, Jeff Hawkins, John Zimmer (Lyft cofounder), Kevin Roose, Lean Startup, Lyft, machine translation, Mark Zuckerberg, market fundamentalism, Metcalfe’s law, move fast and break things, multi-sided market, Network effects, pattern recognition, platform as a service, Ponzi scheme, recommendation engine, Richard Feynman, ride hailing / ride sharing, Robert Metcalfe, Salesforce, self-driving car, sharing economy, Silicon Valley, Skype, Snapchat, SoftBank, software as a service, sovereign wealth fund, speech recognition, stealth mode startup, Steve Ballmer, Steve Jobs, Steven Levy, subscription business, Susan Wojcicki, TaskRabbit, too big to fail, transaction costs, transport as a service, Travis Kalanick, two-sided market, Uber and Lyft, Uber for X, uber lyft, vertical integration, Vision Fund, web application, zero-sum game

Consequently, the company was forced to spend billions of dollars in venture capital and operating cash flow simply to maintain the status quo. Rapid growth in existing as well as new markets then required additional expenses and investments. Overall, Uber has grown mostly because of generous capital providers (largely sovereign wealth funds and SoftBank’s Vision Fund). Investors seem to be betting on a winner-take-all-or-most outcome where Uber outlasts both digital and conventional competitors, and then eventually raises prices or reduces costly subsidies. Second, transaction platforms “reduce friction” to facilitate interactions among platform participants.


pages: 251 words: 80,831

Super Founders: What Data Reveals About Billion-Dollar Startups by Ali Tamaseb

"World Economic Forum" Davos, 23andMe, additive manufacturing, Affordable Care Act / Obamacare, Airbnb, Anne Wojcicki, asset light, barriers to entry, Ben Horowitz, Benchmark Capital, bitcoin, business intelligence, buy and hold, Chris Wanstrath, clean water, cloud computing, coronavirus, corporate governance, correlation does not imply causation, COVID-19, cryptocurrency, data science, discounted cash flows, diversified portfolio, Elon Musk, Fairchild Semiconductor, game design, General Magic , gig economy, high net worth, hiring and firing, index fund, Internet Archive, Jeff Bezos, John Zimmer (Lyft cofounder), Kickstarter, late fees, lockdown, Lyft, Marc Andreessen, Marc Benioff, Mark Zuckerberg, Max Levchin, Mitch Kapor, natural language processing, Network effects, nuclear winter, PageRank, PalmPilot, Parker Conrad, Paul Buchheit, Paul Graham, peer-to-peer lending, Peter Thiel, Planet Labs, power law, QR code, Recombinant DNA, remote working, ride hailing / ride sharing, robotic process automation, rolodex, Ruby on Rails, Salesforce, Sam Altman, Sand Hill Road, self-driving car, shareholder value, sharing economy, side hustle, side project, Silicon Valley, Silicon Valley startup, Skype, Snapchat, SoftBank, software as a service, software is eating the world, sovereign wealth fund, Startup school, Steve Jobs, Steve Wozniak, survivorship bias, TaskRabbit, telepresence, the payments system, TikTok, Tony Fadell, Tony Hsieh, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, ubercab, web application, WeWork, work culture , Y Combinator

In order to have “skin in the game,” the general partners, or GPs, of a venture capital fund have to put some of their own capital into the fund, typically at least 1 or 2 percent of the fund size, which is called the GP commit. The rest of the money usually comes from institutional sources of capital, university endowments, investment offices of high-net-worth families, nonprofit foundations, pension funds, sovereign wealth funds, and the like. There are some VCs that only invest money on behalf of nonprofits. That is one key distinction between VCs and angel investors: angels invest their own money, while VCs invest other people’s money, often fifty to a hundred times more than their own. In fact, many VCs early in their careers have to borrow from banks to pay their “skin in the game” capital.


pages: 286 words: 86,480

Meantime: The Brilliant 'Unputdownable Crime Novel' From Frankie Boyle by Frankie Boyle

Big Tech, Large Hadron Collider, late capitalism, lateral thinking, printed gun, sovereign wealth fund, Stephen Hawking, technoutopianism, Turing test, WikiLeaks

Tends not to go down too well at the after-party, that line of chat. People want hope, the weak bastards.’ He gave a high-pitched giggle, and was maybe a little drunk already. Sophie smiled and shook her head at me apologetically. ‘There’s an idea that Britain attracts a lot of hot money, is a place where a lot of criminals invest, a lot of sovereign wealth funds, just cos everybody’s so fucking passive. When some oligarch buys a flat in London, he’s partly investing in the idea that Britain would never have a revolution. Maybe that’s Trident too. I mean, mere apathy alone wouldn’t let you have nuclear weapons up the road from where you tuck your kids in at night.


pages: 620 words: 214,639

House of Cards: A Tale of Hubris and Wretched Excess on Wall Street by William D. Cohan

Alan Greenspan, asset-backed security, Bear Stearns, book value, call centre, collateralized debt obligation, corporate governance, corporate raider, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, deal flow, Deng Xiaoping, diversification, Financial Instability Hypothesis, fixed income, Glass-Steagall Act, Hyman Minsky, Irwin Jacobs, Jim Simons, John Meriwether, junk bonds, Long Term Capital Management, low interest rates, margin call, merger arbitrage, Michael Milken, money market fund, moral hazard, mortgage debt, mutually assured destruction, Myron Scholes, New Journalism, Northern Rock, proprietary trading, Renaissance Technologies, Rod Stewart played at Stephen Schwarzman birthday party, Savings and loan crisis, savings glut, shareholder value, sovereign wealth fund, stock buybacks, too big to fail, traveling salesman, uptick rule, vertical integration, Y2K, yield curve

In mid-August, Christopher Flowers, of the eponymous private equity firm, came to 383 Madison to kick the tires about an investment in the firm for himself and, he claimed, for AIG. He met with Molinaro, Begleiter, and Friedman. But Flowers did not seem at all serious about the investment. The firm also spent time with the Saudis' sovereign wealth fund. “We went very far down the path with the Saudis,” Paul Friedman said. “We thought that they were going to make us a $10 billion loan and take a 20 percent equity stake.” But that did not happen, either. Then there were the discussions with PIMCO, where several Bear Stearns alumni worked. “PIMCO was going to make around a $10 billion investment and was going to take out some equity,” Friedman said.

“The next thing you would hear on the Street is, ‘Holy shit! Bear Stearns tried to sell its whole Alt-A portfolio and couldn't. Those guys are screwed,’” this executive continued. “It's one thing to say, ‘Just get out,' when you're out and you can announce to the Street: ‘I've sold my Alt-A's. I took my beating. I raised $2 billion from a sovereign wealth fund. It's dilutive, but I'm done. And oh, by the way, my business is going under.' So that you couldn't do.” Schwartz also determined the firm needed to continue its hedging strategies—even though by unwinding them there was some profit embedded in them that the firm could have benefited from—from time to time during the first three months of 2008.


pages: 356 words: 91,157

The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class?and What We Can Do About It by Richard Florida

affirmative action, Airbnb, back-to-the-city movement, basic income, Bernie Sanders, bike sharing, blue-collar work, business climate, Capital in the Twenty-First Century by Thomas Piketty, clean water, Columbine, congestion charging, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, Donald Trump, East Village, edge city, Edward Glaeser, failed state, Ferguson, Missouri, gentrification, Gini coefficient, Google bus, high net worth, high-speed rail, income inequality, income per capita, industrial cluster, informal economy, Jane Jacobs, jitney, Kitchen Debate, knowledge economy, knowledge worker, land value tax, low skilled workers, Lyft, megacity, megaproject, Menlo Park, mortgage tax deduction, Nate Silver, New Economic Geography, new economy, New Urbanism, occupational segregation, off-the-grid, opioid epidemic / opioid crisis, Paul Graham, plutocrats, RAND corporation, rent control, rent-seeking, restrictive zoning, Richard Florida, rising living standards, Ronald Reagan, secular stagnation, self-driving car, Silicon Valley, SimCity, sovereign wealth fund, streetcar suburb, superstar cities, tech worker, the built environment, The Chicago School, The Death and Life of Great American Cities, the High Line, The Rise and Fall of American Growth, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, trickle-down economics, Tyler Cowen, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, urban decay, urban planning, urban renewal, urban sprawl, white flight, young professional

Still, it highlights the extent to which certain highly prized areas of superstar cities are being turned into gilded enclaves for a global plutocracy of largely absentee owners.8 It’s not just wealthy plutocrats who are buying into superstar cities. Giant corporations, real estate investment trusts, hedge funds, and sovereign wealth funds are investing huge amounts in real estate there as well. Global cities expert Saskia Sassen estimated that by 2015 corporations had accumulated more than $1 trillion in urban real estate. Many of the super-rich hide their identities behind shell companies, as a detailed New York Times investigation of just one hyper-luxury complex, the Time Warner Center, revealed.


pages: 327 words: 90,542

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril by Satyajit Das

"there is no alternative" (TINA), "World Economic Forum" Davos, 9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Alan Greenspan, Albert Einstein, Alfred Russel Wallace, Anthropocene, Anton Chekhov, Asian financial crisis, banking crisis, Bear Stearns, Berlin Wall, bitcoin, bond market vigilante , Bretton Woods, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, digital divide, disintermediation, disruptive innovation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial engineering, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, geopolitical risk, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, Great Leap Forward, Greenspan put, happiness index / gross national happiness, high-speed rail, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), it is difficult to get a man to understand something, when his salary depends on his not understanding it, It's morning again in America, Jane Jacobs, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, Kevin Roose, knowledge economy, knowledge worker, Les Trente Glorieuses, light touch regulation, liquidity trap, Long Term Capital Management, low interest rates, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, middle-income trap, Mikhail Gorbachev, military-industrial complex, Minsky moment, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, PalmPilot, passive income, peak oil, peer-to-peer lending, pension reform, planned obsolescence, plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Robert Solow, Ronald Reagan, Russell Brand, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, Stephen Fry, systems thinking, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, uber lyft, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

Domestic credit expansion was augmented by foreign capital inflows. Loose monetary policies in developed countries encouraged capital inflows into emerging markets in search of higher returns. Banks, awash with liquidity, lent to emerging markets; international pension funds, investment managers, central banks, and sovereign wealth funds increased their investment in them. The effect of capital inflows was exacerbated by the small size of the local financial markets. A 1 percent increase in portfolio allocation by US pension funds and insurers equates to around US$500 billion, much more than emerging markets could absorb easily.


pages: 330 words: 91,805

Peers Inc: How People and Platforms Are Inventing the Collaborative Economy and Reinventing Capitalism by Robin Chase

Airbnb, Amazon Web Services, Andy Kessler, Anthropocene, Apollo 13, banking crisis, barriers to entry, basic income, Benevolent Dictator For Life (BDFL), bike sharing, bitcoin, blockchain, Burning Man, business climate, call centre, car-free, carbon tax, circular economy, cloud computing, collaborative consumption, collaborative economy, collective bargaining, commoditize, congestion charging, creative destruction, crowdsourcing, cryptocurrency, data science, deal flow, decarbonisation, different worldview, do-ocracy, don't be evil, Donald Shoup, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, Eyjafjallajökull, Ferguson, Missouri, Firefox, Free Software Foundation, frictionless, Gini coefficient, GPS: selective availability, high-speed rail, hive mind, income inequality, independent contractor, index fund, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Jane Jacobs, Jeff Bezos, jimmy wales, job satisfaction, Kickstarter, Kinder Surprise, language acquisition, Larry Ellison, Lean Startup, low interest rates, Lyft, machine readable, means of production, megacity, Minecraft, minimum viable product, Network effects, new economy, Oculus Rift, off-the-grid, openstreetmap, optical character recognition, pattern recognition, peer-to-peer, peer-to-peer lending, peer-to-peer model, Post-Keynesian economics, Richard Stallman, ride hailing / ride sharing, Ronald Coase, Ronald Reagan, Salesforce, Satoshi Nakamoto, Search for Extraterrestrial Intelligence, self-driving car, shareholder value, sharing economy, Silicon Valley, six sigma, Skype, smart cities, smart grid, Snapchat, sovereign wealth fund, Steve Crocker, Steve Jobs, Steven Levy, TaskRabbit, The Death and Life of Great American Cities, The Future of Employment, the long tail, The Nature of the Firm, Tragedy of the Commons, transaction costs, Turing test, turn-by-turn navigation, Uber and Lyft, uber lyft, vertical integration, Zipcar

And it too is experiencing phenomenal growth rates: Prosper took eight years to attract the first $1 billion in loans, and then, within just six months, they crossed the $2 billion-in-loans milestone.10 However, both Lending Club and Prosper, which started firmly as peer-to-peer lending marketplaces, now mostly facilitate loans from institutional lenders, not individuals. At Prosper, more than 80 percent of the loans made in March 2014 were financed by hedge funds, pension funds, asset managers, sovereign wealth funds, and foreign banks.11 And at Lending Club, that number—the percentage of loans fulfilled by institutional lenders—was about 70 percent.12 In October 2014, institutional investors issued $177 million in loans, three-and-a-half times more than they had in October 2013.13 Larry Summers, secretary of the treasury during the Clinton administration and now a Lending Club board member, said, “Lending Club’s platform has the potential to profoundly transform traditional banking over the next decade.”14 The question is, transform it into what?


pages: 302 words: 95,965

How to Be the Startup Hero: A Guide and Textbook for Entrepreneurs and Aspiring Entrepreneurs by Tim Draper

3D printing, Airbnb, Apple's 1984 Super Bowl advert, augmented reality, autonomous vehicles, basic income, Berlin Wall, bitcoin, blockchain, Buckminster Fuller, business climate, carried interest, connected car, CRISPR, crowdsourcing, cryptocurrency, deal flow, Deng Xiaoping, discounted cash flows, disintermediation, Donald Trump, Elon Musk, Ethereum, ethereum blockchain, fake news, family office, fiat currency, frictionless, frictionless market, growth hacking, high net worth, hiring and firing, initial coin offering, Jeff Bezos, Kickstarter, Larry Ellison, low earth orbit, Lyft, Mahatma Gandhi, Marc Benioff, Mark Zuckerberg, Menlo Park, Metcalfe's law, Metcalfe’s law, Michael Milken, Mikhail Gorbachev, Minecraft, Moneyball by Michael Lewis explains big data, Nelson Mandela, Network effects, peer-to-peer, Peter Thiel, pez dispenser, Ralph Waldo Emerson, risk tolerance, Robert Metcalfe, Ronald Reagan, Rosa Parks, Salesforce, Sand Hill Road, school choice, school vouchers, self-driving car, sharing economy, Sheryl Sandberg, short selling, Silicon Valley, Skype, smart contracts, Snapchat, sovereign wealth fund, stealth mode startup, stem cell, Steve Jobs, Steve Jurvetson, Tesla Model S, Twitter Arab Spring, Uber for X, uber lyft, universal basic income, women in the workforce, Y Combinator, zero-sum game

The country might be a 17-hour flight away from Silicon Valley, but it is very aligned with the Startup Hero on how to drive progress. My experience started when Finian Tan, then working for the Singapore government, called to say that he would like to invest $100 million from the Singapore sovereign wealth fund, GIC, into Draper Fisher Jurvetson ePlanet Ventures. We were so impressed with Finian, that several months later we hired him to run our Asian office. We set up an office in Singapore, and worked hard to make the GIC. a great return during what turned out to be a challenging venture capital environment.


pages: 288 words: 90,349

The Challenge for Africa by Wangari Maathai

"World Economic Forum" Davos, Berlin Wall, Bob Geldof, carbon credits, carbon footprint, carbon-based life, clean water, colonial rule, corporate social responsibility, deliberate practice, F. W. de Klerk, failed state, Fall of the Berlin Wall, Intergovernmental Panel on Climate Change (IPCC), Live Aid, Mahatma Gandhi, Mikhail Gorbachev, Nelson Mandela, Scramble for Africa, sovereign wealth fund, structural adjustment programs, sustainable-tourism, trade liberalization, transatlantic slave trade, urban planning, War on Poverty, Washington Consensus

However, by 2007, it had the third-highest GDP per capita in the world, average life expectancy at birth was eighty years, and it ranked second in the United Nations' Human Development Index.33 Norway maintains high rates of taxation, and costs of living are also high, which together mean that disparities in wealth are relatively small and within the society an egalitarian ethos predominates. Since 1990, Norway has been saving some of the money it receives from its oil exports in a sovereign wealth fund. As of June 2007, this fund was worth $300 billion, or $62,000 for every Norwegian citizen. The oil industry is largely controlled by the Norwegian government, a fact that suggests that a state-run enterprise need be neither inefficient nor a locus of corruption. The Norwegian economy's low inflation rate and the government's emphasis on research and development in non-oil sectors demonstrate its recognition that today's vast oil income should not be squandered.


pages: 339 words: 88,732

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson, Andrew McAfee

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, access to a mobile phone, additive manufacturing, Airbnb, Alan Greenspan, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, American Society of Civil Engineers: Report Card, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, barriers to entry, basic income, Baxter: Rethink Robotics, Boston Dynamics, British Empire, business cycle, business intelligence, business process, call centre, carbon tax, Charles Lindbergh, Chuck Templeton: OpenTable:, clean water, combinatorial explosion, computer age, computer vision, congestion charging, congestion pricing, corporate governance, cotton gin, creative destruction, crowdsourcing, data science, David Ricardo: comparative advantage, digital map, driverless car, employer provided health coverage, en.wikipedia.org, Erik Brynjolfsson, factory automation, Fairchild Semiconductor, falling living standards, Filter Bubble, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, Freestyle chess, full employment, G4S, game design, general purpose technology, global village, GPS: selective availability, Hans Moravec, happiness index / gross national happiness, illegal immigration, immigration reform, income inequality, income per capita, indoor plumbing, industrial robot, informal economy, intangible asset, inventory management, James Watt: steam engine, Jeff Bezos, Jevons paradox, jimmy wales, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Khan Academy, Kiva Systems, knowledge worker, Kodak vs Instagram, law of one price, low skilled workers, Lyft, Mahatma Gandhi, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Mars Rover, mass immigration, means of production, Narrative Science, Nate Silver, natural language processing, Network effects, new economy, New Urbanism, Nicholas Carr, Occupy movement, oil shale / tar sands, oil shock, One Laptop per Child (OLPC), pattern recognition, Paul Samuelson, payday loans, post-work, power law, price stability, Productivity paradox, profit maximization, Ralph Nader, Ray Kurzweil, recommendation engine, Report Card for America’s Infrastructure, Robert Gordon, Robert Solow, Rodney Brooks, Ronald Reagan, search costs, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Simon Kuznets, six sigma, Skype, software patent, sovereign wealth fund, speech recognition, statistical model, Steve Jobs, Steven Pinker, Stuxnet, supply-chain management, TaskRabbit, technological singularity, telepresence, The Bell Curve by Richard Herrnstein and Charles Murray, the Cathedral and the Bazaar, the long tail, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Vernor Vinge, warehouse robotics, Watson beat the top human players on Jeopardy!, winner-take-all economy, Y2K

What can we learn from industries with a concentration of high-income superstars like professional sports, motion pictures, and music? What challenges and opportunities do citizens of nations like Norway and the United Arab Emirates face when they have access to enormous wealth as a birthright via sovereign wealth funds? What were the institutions and incentives that helped some children of wealthy landowners in the seventeenth century go on to lead happy, inventive, and creative lives, while others did not? In the coming decade, we will have the good fortune to witness a wave of astonishing technologies unleashed.


pages: 324 words: 90,253

When the Money Runs Out: The End of Western Affluence by Stephen D. King

Alan Greenspan, Albert Einstein, Apollo 11, Asian financial crisis, asset-backed security, banking crisis, Basel III, Bear Stearns, Berlin Wall, Bernie Madoff, bond market vigilante , British Empire, business cycle, capital controls, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, congestion charging, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cross-subsidies, currency risk, debt deflation, Deng Xiaoping, Diane Coyle, endowment effect, eurozone crisis, Fall of the Berlin Wall, financial innovation, financial repression, fixed income, floating exchange rates, Ford Model T, full employment, George Akerlof, German hyperinflation, Glass-Steagall Act, Hyman Minsky, income inequality, income per capita, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, junk bonds, Kickstarter, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, London Interbank Offered Rate, loss aversion, low interest rates, market clearing, mass immigration, Minsky moment, moral hazard, mortgage debt, Neil Armstrong, new economy, New Urbanism, Nick Leeson, Northern Rock, Occupy movement, oil shale / tar sands, oil shock, old age dependency ratio, price mechanism, price stability, quantitative easing, railway mania, rent-seeking, reserve currency, rising living standards, risk free rate, Savings and loan crisis, seminal paper, South Sea Bubble, sovereign wealth fund, technology bubble, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, trickle-down economics, Washington Consensus, women in the workforce, working-age population

If that trust disappears, money becomes worthless. How might this mechanism – however unlikely – be triggered in practice? The most plausible route would surely be an initial loss of faith in the currency not so much from the public at large but, instead, from foreign creditors – reserve managers, sovereign wealth funds and the like. They, after all, are most vulnerable to what I labelled in chapter 6 the ‘democratic deficit’. Unlike the 1930s, when a government's creditors were almost entirely home-grown (and where, if international credit was available, it came from other governments, not from the private sector), creditors today come from all over the world.


pages: 304 words: 90,084

Net Zero: How We Stop Causing Climate Change by Dieter Helm

3D printing, autonomous vehicles, Berlin Wall, biodiversity loss, blockchain, Boris Johnson, carbon credits, carbon footprint, carbon tax, clean water, congestion charging, coronavirus, COVID-19, CRISPR, decarbonisation, deindustrialization, demand response, Deng Xiaoping, Donald Trump, electricity market, Extinction Rebellion, fixed income, food miles, Ford Model T, Francis Fukuyama: the end of history, general purpose technology, Great Leap Forward, green new deal, Greta Thunberg, Haber-Bosch Process, high-speed rail, hydrogen economy, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Jevons paradox, lockdown, market design, means of production, microplastics / micro fibres, North Sea oil, ocean acidification, off grid, off-the-grid, oil shale / tar sands, oil shock, peak oil, planetary scale, precautionary principle, price mechanism, quantitative easing, remote working, reshoring, rewilding, Ronald Reagan, smart meter, South China Sea, sovereign wealth fund, statistical model, systems thinking, Thomas Malthus

The parts per million of carbon that we pass on will almost certainly be much higher than the level we inherited. So we need an additional compensation to make up for the fact that the next generation is going to get all those costs from climate change, while we benefit from not paying for the pollution we are causing. This could be achieved by creating a sovereign wealth fund, building up the funds that future generations will need in order to deal with the mess we will have left them with. They should in effect borrow from us through our bequeathing these monies set aside, rather than us borrow from them by building up debt and expecting them to pay. Without this, current consumption is too high, and the economy is pursuing an unsustainable growth path.


pages: 319 words: 89,192

Spooked: The Trump Dossier, Black Cube, and the Rise of Private Spies by Barry Meier

Airbnb, business intelligence, citizen journalism, Citizen Lab, commoditize, coronavirus, corporate raider, COVID-19, digital map, disinformation, Donald Trump, fake news, false flag, forensic accounting, global pandemic, Global Witness, index card, Jeffrey Epstein, Julian Assange, Londongrad, medical malpractice, NSO Group, offshore financial centre, opioid epidemic / opioid crisis, Ponzi scheme, Ronald Reagan, Russian election interference, Silicon Valley, Silicon Valley startup, Skype, SoftBank, sovereign wealth fund, Steve Jobs, WikiLeaks

GLENN SIMPSON WAS SOON getting the type of material that a reporter usually only dreams about. Those documents—personal emails, confidential bank statements, credit card statements, cellphone records, etc.—detailed the personal and financial dealings of a consultant in Washington, Alexander Mirtchev, who was a top advisor to Kazakhstan’s sovereign wealth fund and a main target of Rakhat Aliyev. In mid-2008, Simpson and another investigative reporter at the Journal, Sue Schmidt, began writing a series of articles about Mirtchev and the Kazakh bribery scandal that depicted the consultant as a political and financial fixer for Kazakhstan’s president.


pages: 297 words: 89,292

2034: A Novel of the Next World War by Elliot Ackerman, James Admiral Stavridis

coronavirus, COVID-19, creative destruction, cuban missile crisis, digital map, loose coupling, mutually assured destruction, South China Sea, sovereign wealth fund, undersea cable

After the New Delhi Peace Accords, both the political world and business world opened up to him in a way he could never have anticipated. Not only had he served in the highest levels of the US executive branch; he was an India expert (or simply Indian, if the offending party hadn’t read his CV). International lobbyists, think tanks, venture capitalists, sovereign wealth funds—they aggressively courted him with board seats, stock options, and prestigious titles such as “Senior Distinguished Fellow” as they vied for his expertise as part of a general clamor to understand India’s ascendance as an economic and political juggernaut. For Chowdhury, this meant that he’d had no reason to go back to America.


pages: 339 words: 95,270

Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace by Matthew C. Klein

Alan Greenspan, Albert Einstein, Asian financial crisis, asset allocation, asset-backed security, Berlin Wall, Bernie Sanders, Branko Milanovic, Bretton Woods, British Empire, business climate, business cycle, capital controls, centre right, collective bargaining, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, deglobalization, deindustrialization, Deng Xiaoping, Donald Trump, Double Irish / Dutch Sandwich, Fall of the Berlin Wall, falling living standards, financial innovation, financial repression, fixed income, full employment, George Akerlof, global supply chain, global value chain, Great Leap Forward, high-speed rail, illegal immigration, income inequality, intangible asset, invention of the telegraph, joint-stock company, land reform, Long Term Capital Management, low interest rates, Malcom McLean invented shipping containers, manufacturing employment, Martin Wolf, mass immigration, Mikhail Gorbachev, Money creation, money market fund, mortgage debt, New Urbanism, Nixon triggered the end of the Bretton Woods system, offshore financial centre, oil shock, open economy, paradox of thrift, passive income, reserve currency, rising living standards, Robert Shiller, Ronald Reagan, savings glut, Scramble for Africa, sovereign wealth fund, stock buybacks, subprime mortgage crisis, The Nature of the Firm, The Wealth of Nations by Adam Smith, Tim Cook: Apple, trade liberalization, Wolfgang Streeck

The trauma of the global financial crisis encouraged even further accumulation: as of the beginning of 2019, foreign governments owned roughly $8 trillion in dollar-denominated assets.28 The necessary tradeoff has been a reduction in domestic spending in countries that accumulated reserves. Central banks and sovereign wealth funds bought foreign financial assets with purchasing power that otherwise would have been used to buy additional imports. Governments increased their wealth at the expense of ordinary households, who spent less on goods and services. The understandable desire for self-insurance has therefore led to a chronic shortfall of demand—and large trade surpluses—across much of East Asia.


pages: 282 words: 93,783

The Future Is Analog: How to Create a More Human World by David Sax

Alvin Toffler, augmented reality, autonomous vehicles, Bernie Sanders, big-box store, bike sharing, Black Lives Matter, blockchain, bread and circuses, Buckminster Fuller, Cal Newport, call centre, clean water, cognitive load, commoditize, contact tracing, contact tracing app, COVID-19, crowdsourcing, cryptocurrency, data science, David Brooks, deep learning, digital capitalism, Donald Trump, driverless car, Elon Musk, fiat currency, Francis Fukuyama: the end of history, future of work, gentrification, George Floyd, indoor plumbing, informal economy, Jane Jacobs, Jaron Lanier, Jeff Bezos, Kickstarter, knowledge worker, lockdown, Lyft, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Minecraft, New Urbanism, nuclear winter, opioid epidemic / opioid crisis, Peter Thiel, RAND corporation, Ray Kurzweil, remote working, retail therapy, RFID, Richard Florida, ride hailing / ride sharing, Saturday Night Live, Shoshana Zuboff, side hustle, Sidewalk Labs, Silicon Valley, Silicon Valley startup, Skype, smart cities, social distancing, sovereign wealth fund, Steve Jobs, Superbowl ad, supply-chain management, surveillance capitalism, tech worker, technological singularity, technoutopianism, TED Talk, The Death and Life of Great American Cities, TikTok, Uber and Lyft, uber lyft, unemployed young men, urban planning, walkable city, Y2K, zero-sum game

“You have to pick a side,” Saunders said, describing how restaurants were the central gathering points of many communities like his in Chicago, more important today than churches or bowling alleys or fraternal lodges. The future of commerce was about value creation, not value retention. He wanted to be on their side, not the side of a sovereign wealth fund looking for a return on its investment in a venture capital fund. “Why do I have to give 20 percent of my delivery charge to a company in California so a guy three blocks away can bring me a hamburger?” Saunders said. “There’s no reason for that middleman if there’s enough trust.” One of Captain’s earliest customers was Irazú, a Costa Rican restaurant in Chicago that opened in 1990.


pages: 292 words: 87,720

Volt Rush: The Winners and Losers in the Race to Go Green by Henry Sanderson

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, animal electricity, autonomous vehicles, Boris Johnson, carbon footprint, Carl Icahn, circular economy, commodity super cycle, corporate governance, corporate social responsibility, COVID-19, David Attenborough, decarbonisation, Deng Xiaoping, Dissolution of the Soviet Union, Donald Trump, Elon Musk, energy transition, Extinction Rebellion, Exxon Valdez, Fairphone, Ford Model T, gigafactory, global supply chain, Global Witness, income per capita, Internet of things, invention of the steam engine, Kickstarter, lockdown, megacity, Menlo Park, oil shale / tar sands, planned obsolescence, popular capitalism, purchasing power parity, QR code, reality distortion field, Ronald Reagan, Scramble for Africa, short squeeze, Silicon Valley, Silicon Valley startup, smart grid, sovereign wealth fund, Steve Jobs, supply-chain management, tech billionaire, Tesla Model S, The Chicago School, the new new thing, three-masted sailing ship, Tony Fadell, UNCLOS, WikiLeaks, work culture

Jiang also heeded the Communist Party’s call to ‘go global’ and secure overseas natural resources. Along with Vivian Wu, the young Tianqi president, Jiang got his second big break in 2012, when he won a bidding battle against US lithium producer Rockwood – now Albemarle – for control of Australia’s largest lithium mine, Greenbushes, paying $646 million in a deal backed by China’s sovereign wealth fund and largest state-owned policy lender China Development Bank. The mine had been in operation since the days of Australia’s gold rush in 1888, producing first tin and then tantalum, but it had been bought by a US investment fund following bankruptcy in 2007. Tianqi had been one of its main customers for lithium, buying forty percent of its supply to process in China.


pages: 328 words: 96,141

Rocket Billionaires: Elon Musk, Jeff Bezos, and the New Space Race by Tim Fernholz

Amazon Web Services, Apollo 13, autonomous vehicles, business climate, Charles Lindbergh, Clayton Christensen, cloud computing, Colonization of Mars, corporate governance, corporate social responsibility, deep learning, disruptive innovation, Donald Trump, Elon Musk, fail fast, fulfillment center, Gene Kranz, high net worth, high-speed rail, Iridium satellite, Jeff Bezos, Kickstarter, Kim Stanley Robinson, Kwajalein Atoll, low earth orbit, Marc Andreessen, Mark Zuckerberg, Mars Society, Masayoshi Son, megaproject, military-industrial complex, minimum viable product, multiplanetary species, mutually assured destruction, Neal Stephenson, Neil Armstrong, new economy, no-fly zone, nuclear paranoia, paypal mafia, Peter H. Diamandis: Planetary Resources, Peter Thiel, pets.com, planetary scale, private spaceflight, profit maximization, RAND corporation, Richard Feynman, Richard Feynman: Challenger O-ring, Ronald Reagan, satellite internet, Scaled Composites, shareholder value, Silicon Valley, skunkworks, SoftBank, sovereign wealth fund, space junk, SpaceShipOne, Stephen Hawking, Steve Jobs, Strategic Defense Initiative, trade route, undersea cable, vertical integration, Virgin Galactic, VTOL, We wanted flying cars, instead we got 140 characters, X Prize, Y2K

That same year, Branson hired George Whitesides, then the NASA administrator’s chief of staff, as the CEO of Virgin and the Spaceship Company. Whitesides had come far in the decade since he worked at BlastOff. Giving a boost to his mandate was a deal that Branson had cut the year before with the United Arab Emirates. The tiny, oil-rich collection of sheikhdoms sported a sovereign wealth fund dedicated to funneling its petroleum profits toward long-term investments in technology. Branson, in his own telling, flew to Abu Dhabi and sealed a $280 million investment in Virgin in a single day. The company was revitalized, but adaptations—including a redesign of the fuel tank to dispel any concerns about the use of nitrous oxide, hiring an outside company to redesign the propulsion system, and eventually bringing the project back in-house—pushed back Branson’s inaugural flight for years.


pages: 336 words: 95,773

The Theft of a Decade: How the Baby Boomers Stole the Millennials' Economic Future by Joseph C. Sternberg

Affordable Care Act / Obamacare, Airbnb, Alan Greenspan, American Legislative Exchange Council, Asian financial crisis, banking crisis, Basel III, Bear Stearns, Bernie Sanders, blue-collar work, centre right, corporate raider, Detroit bankruptcy, Donald Trump, Edward Glaeser, employer provided health coverage, Erik Brynjolfsson, eurozone crisis, financial engineering, future of work, gig economy, Gordon Gekko, hiring and firing, Home mortgage interest deduction, housing crisis, independent contractor, job satisfaction, job-hopping, labor-force participation, low interest rates, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, minimum wage unemployment, mortgage debt, mortgage tax deduction, Nate Silver, new economy, obamacare, oil shock, payday loans, pension reform, quantitative easing, Richard Florida, Ronald Reagan, Saturday Night Live, Second Machine Age, sharing economy, Silicon Valley, sovereign wealth fund, Steve Bannon, stop buying avocado toast, TaskRabbit, total factor productivity, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, unpaid internship, women in the workforce

Bonds issued by Fannie Mae and Freddie Mac (“agency debt” in financial parlance) were especially popular because foreign investors believed Washington would never allow the housing agencies to default, while the investments offered higher returns than normal Treasury bonds. As of July 2008, just months before Fannie and Freddie were placed into receivership for their bad debts, the Federal Reserve held nearly $890 billion worth of agency debts and mortgage-backed securities on behalf of foreign central banks and sovereign-wealth funds. America couldn’t have produced quite so bubbly a housing bubble without this foreign investment in the mortgage market—which was really just recycling Fed-produced easy money back into the American economy. ‡ That high level was probably a result of the combination of high-down-payment, short-duration mortgages and the hangover from the Depression-era wave of foreclosures that had effectively transferred full equity in the homes of the most indebted owners to banks and other institutions


pages: 330 words: 99,044

Reimagining Capitalism in a World on Fire by Rebecca Henderson

"Friedman doctrine" OR "shareholder theory", Airbnb, asset allocation, behavioural economics, benefit corporation, Berlin Wall, Bernie Sanders, business climate, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, circular economy, collaborative economy, collective bargaining, commoditize, corporate governance, corporate social responsibility, crony capitalism, dark matter, decarbonisation, disruptive innovation, double entry bookkeeping, Elon Musk, Erik Brynjolfsson, export processing zone, Exxon Valdez, Fall of the Berlin Wall, family office, fixed income, George Akerlof, Gini coefficient, global supply chain, greed is good, Greta Thunberg, growth hacking, Hans Rosling, Howard Zinn, Hyman Minsky, impact investing, income inequality, independent contractor, index fund, Intergovernmental Panel on Climate Change (IPCC), joint-stock company, Kickstarter, Lyft, Marc Benioff, Mark Zuckerberg, Max Levchin, means of production, meta-analysis, microcredit, middle-income trap, Minsky moment, mittelstand, Mont Pelerin Society, Neil Armstrong, Nelson Mandela, opioid epidemic / opioid crisis, Paris climate accords, passive investing, Paul Samuelson, Philip Mirowski, plant based meat, profit maximization, race to the bottom, ride hailing / ride sharing, Ronald Reagan, Rosa Parks, Salesforce, scientific management, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Snapchat, sovereign wealth fund, Steven Pinker, stocks for the long run, Tim Cook: Apple, total factor productivity, Toyota Production System, uber lyft, urban planning, Washington Consensus, WeWork, working-age population, Zipcar

Investors as Enforcers Cooperation among investors is another key to progress. More than a third of the world’s invested capital—about $19 trillion—is controlled by the world’s hundred largest asset owners. Nearly two-thirds of this money is in pension funds, while the remaining third is in sovereign wealth funds.69 The fifteen largest asset managers collectively handle nearly half of the world’s invested capital. They include BlackRock, which currently manages just under $7.0 trillion; the Vanguard Group, which controls $4.5 trillion; and State Street, which has $2.5 trillion under management.70 A very high proportion of this money, as we saw earlier in the chapter on rewiring finance, is in passive investments.


pages: 332 words: 100,245

Mine!: How the Hidden Rules of Ownership Control Our Lives by Michael A. Heller, James Salzman

23andMe, Airbnb, behavioural economics, Berlin Wall, Big Tech, British Empire, Cass Sunstein, clean water, collaborative consumption, Cornelius Vanderbilt, coronavirus, COVID-19, CRISPR, crowdsourcing, Donald Trump, Downton Abbey, Elon Musk, endowment effect, estate planning, facts on the ground, Fall of the Berlin Wall, Firefox, Garrett Hardin, gig economy, Hernando de Soto, Internet of things, land tenure, Mason jar, Neil Armstrong, new economy, North Sea oil, offshore financial centre, oil rush, planetary scale, race to the bottom, recommendation engine, rent control, Richard Thaler, Ronald Coase, sharing economy, Shoshana Zuboff, Silicon Valley, Silicon Valley startup, social distancing, South China Sea, sovereign wealth fund, stem cell, surveillance capitalism, TaskRabbit, The future is already here, Tim Cook: Apple, Tony Fadell, Tragedy of the Commons, you are the product, Zipcar

Not surprisingly, owners and squatters in forests focus instead on things they can sell. They burn forests to clear them for grazing, logging, and agriculture. The challenge is to make trees worth more standing than cut down. Norway is doing just that, trying to offset some of the climate harm it has caused by extracting North Sea oil. Thanks to its sovereign wealth fund—profits the country accumulated from oil sales—Norway has been able to spend tens of billions of dollars paying people in the Amazon, Indonesia, and Mexico for their efforts to reduce local deforestation rates. If the rate of forest loss slows, more trees are left standing and more carbon is captured from the atmosphere.


pages: 362 words: 97,288

Ghost Road: Beyond the Driverless Car by Anthony M. Townsend

A Pattern Language, active measures, AI winter, algorithmic trading, Alvin Toffler, Amazon Robotics, asset-backed security, augmented reality, autonomous vehicles, backpropagation, big-box store, bike sharing, Blitzscaling, Boston Dynamics, business process, Captain Sullenberger Hudson, car-free, carbon footprint, carbon tax, circular economy, company town, computer vision, conceptual framework, congestion charging, congestion pricing, connected car, creative destruction, crew resource management, crowdsourcing, DARPA: Urban Challenge, data is the new oil, Dean Kamen, deep learning, deepfake, deindustrialization, delayed gratification, deliberate practice, dematerialisation, deskilling, Didi Chuxing, drive until you qualify, driverless car, drop ship, Edward Glaeser, Elaine Herzberg, Elon Musk, en.wikipedia.org, extreme commuting, financial engineering, financial innovation, Flash crash, food desert, Ford Model T, fulfillment center, Future Shock, General Motors Futurama, gig economy, Google bus, Greyball, haute couture, helicopter parent, independent contractor, inventory management, invisible hand, Jane Jacobs, Jeff Bezos, Jevons paradox, jitney, job automation, John Markoff, John von Neumann, Joseph Schumpeter, Kickstarter, Kiva Systems, Lewis Mumford, loss aversion, Lyft, Masayoshi Son, megacity, microapartment, minimum viable product, mortgage debt, New Urbanism, Nick Bostrom, North Sea oil, Ocado, openstreetmap, pattern recognition, Peter Calthorpe, random walk, Ray Kurzweil, Ray Oldenburg, rent-seeking, ride hailing / ride sharing, Rodney Brooks, self-driving car, sharing economy, Shoshana Zuboff, Sidewalk Labs, Silicon Valley, Silicon Valley startup, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, SoftBank, software as a service, sovereign wealth fund, Stephen Hawking, Steve Jobs, surveillance capitalism, technological singularity, TED Talk, Tesla Model S, The Coming Technological Singularity, The Death and Life of Great American Cities, The future is already here, The Future of Employment, The Great Good Place, too big to fail, traffic fines, transit-oriented development, Travis Kalanick, Uber and Lyft, uber lyft, urban planning, urban sprawl, US Airways Flight 1549, Vernor Vinge, vertical integration, Vision Fund, warehouse automation, warehouse robotics

Congestion pricing could be the gateway drug to a future where financiers and mayors team up to tax our movements in endlessly creative and lucrative ways. If you think I’m paranoid, consider that in 2008, Chicago mayor Richard Daley signed a 75-year contract putting the city’s parking meters in the hands of a consortium of sovereign wealth funds led by Morgan Stanley. “Since then, rates have skyrocketed (downtown parking more than doubled in cost to $6.50 an hour by 2013) and the company has netted $778.6 million in revenue. By 2020, the company will have made back its initial $1.15 billion investment and will continue to profit for 60 years.”


pages: 328 words: 96,678

MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them by Nouriel Roubini

"World Economic Forum" Davos, 2021 United States Capitol attack, 3D printing, 9 dash line, AI winter, AlphaGo, artificial general intelligence, asset allocation, assortative mating, autonomous vehicles, bank run, banking crisis, basic income, Bear Stearns, Big Tech, bitcoin, Bletchley Park, blockchain, Boston Dynamics, Bretton Woods, British Empire, business cycle, business process, call centre, carbon tax, Carmen Reinhart, cashless society, central bank independence, collateralized debt obligation, Computing Machinery and Intelligence, coronavirus, COVID-19, creative destruction, credit crunch, crony capitalism, cryptocurrency, currency manipulation / currency intervention, currency peg, data is the new oil, David Ricardo: comparative advantage, debt deflation, decarbonisation, deep learning, DeepMind, deglobalization, Demis Hassabis, democratizing finance, Deng Xiaoping, disintermediation, Dogecoin, Donald Trump, Elon Musk, en.wikipedia.org, energy security, energy transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, eurozone crisis, failed state, fake news, family office, fiat currency, financial deregulation, financial innovation, financial repression, fixed income, floating exchange rates, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, friendshoring, full employment, future of work, game design, geopolitical risk, George Santayana, Gini coefficient, global pandemic, global reserve currency, global supply chain, GPS: selective availability, green transition, Greensill Capital, Greenspan put, Herbert Marcuse, high-speed rail, Hyman Minsky, income inequality, inflation targeting, initial coin offering, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of movable type, Isaac Newton, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, knowledge worker, Long Term Capital Management, low interest rates, low skilled workers, low-wage service sector, M-Pesa, margin call, market bubble, Martin Wolf, mass immigration, means of production, meme stock, Michael Milken, middle-income trap, Mikhail Gorbachev, Minsky moment, Modern Monetary Theory, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Mustafa Suleyman, Nash equilibrium, natural language processing, negative equity, Nick Bostrom, non-fungible token, non-tariff barriers, ocean acidification, oil shale / tar sands, oil shock, paradox of thrift, pets.com, Phillips curve, planetary scale, Ponzi scheme, precariat, price mechanism, price stability, public intellectual, purchasing power parity, quantitative easing, race to the bottom, Ralph Waldo Emerson, ransomware, Ray Kurzweil, regulatory arbitrage, reserve currency, reshoring, Robert Shiller, Ronald Reagan, Salesforce, Satoshi Nakamoto, Savings and loan crisis, Second Machine Age, short selling, Silicon Valley, smart contracts, South China Sea, sovereign wealth fund, Stephen Hawking, TED Talk, The Great Moderation, the payments system, Thomas L Friedman, TikTok, too big to fail, Turing test, universal basic income, War on Poverty, warehouse robotics, Washington Consensus, Watson beat the top human players on Jeopardy!, working-age population, Yogi Berra, Yom Kippur War, zero-sum game, zoonotic diseases

But one proxy for the firms and industries of the future is the Nasdaq 100: this index of mostly tech stock includes some firms that will become obsolete, some that will remain strong, and some newly listed firms that will flourish in the future. But given the current high and frothy P/E ratio for the Nasdaq 100, you may want to wait until the next severe recession depresses this index further rather than buying it at inflated levels. The right portfolio mix and components of stocks and bonds can be debated, this much is clear: sovereign wealth funds, pension funds, endowments, foundations, family offices, and individuals following the 60/40 rule should start to think about diversifying their holdings to hedge against rising inflation, negative growth shocks, political and geopolitical, technological, health, and environmental risks. While these risks will disrupt and/or wipe out many individual jobs, firms, and entire industries, any type of individual or institutional investor can start protecting their savings and investments from the coming financial instability and chaos.


pages: 289 words: 95,046

Chaos Kings: How Wall Street Traders Make Billions in the New Age of Crisis by Scott Patterson

"World Economic Forum" Davos, 2021 United States Capitol attack, 4chan, Alan Greenspan, Albert Einstein, asset allocation, backtesting, Bear Stearns, beat the dealer, behavioural economics, Benoit Mandelbrot, Bernie Madoff, Bernie Sanders, bitcoin, Bitcoin "FTX", Black Lives Matter, Black Monday: stock market crash in 1987, Black Swan, Black Swan Protection Protocol, Black-Scholes formula, blockchain, Bob Litterman, Boris Johnson, Brownian motion, butterfly effect, carbon footprint, carbon tax, Carl Icahn, centre right, clean tech, clean water, collapse of Lehman Brothers, Colonization of Mars, commodity super cycle, complexity theory, contact tracing, coronavirus, correlation does not imply causation, COVID-19, Credit Default Swap, cryptocurrency, Daniel Kahneman / Amos Tversky, decarbonisation, disinformation, diversification, Donald Trump, Doomsday Clock, Edward Lloyd's coffeehouse, effective altruism, Elliott wave, Elon Musk, energy transition, Eugene Fama: efficient market hypothesis, Extinction Rebellion, fear index, financial engineering, fixed income, Flash crash, Gail Bradbrook, George Floyd, global pandemic, global supply chain, Gordon Gekko, Greenspan put, Greta Thunberg, hindsight bias, index fund, interest rate derivative, Intergovernmental Panel on Climate Change (IPCC), Jeff Bezos, Jeffrey Epstein, Joan Didion, John von Neumann, junk bonds, Just-in-time delivery, lockdown, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, Mark Spitznagel, Mark Zuckerberg, market fundamentalism, mass immigration, megacity, Mikhail Gorbachev, Mohammed Bouazizi, money market fund, moral hazard, Murray Gell-Mann, Nick Bostrom, off-the-grid, panic early, Pershing Square Capital Management, Peter Singer: altruism, Ponzi scheme, power law, precautionary principle, prediction markets, proprietary trading, public intellectual, QAnon, quantitative easing, quantitative hedge fund, quantitative trading / quantitative finance, Ralph Nader, Ralph Nelson Elliott, random walk, Renaissance Technologies, rewilding, Richard Thaler, risk/return, road to serfdom, Ronald Reagan, Ronald Reagan: Tear down this wall, Rory Sutherland, Rupert Read, Sam Bankman-Fried, Silicon Valley, six sigma, smart contracts, social distancing, sovereign wealth fund, statistical arbitrage, statistical model, stem cell, Stephen Hawking, Steve Jobs, Steven Pinker, Stewart Brand, systematic trading, tail risk, technoutopianism, The Chicago School, The Great Moderation, the scientific method, too big to fail, transaction costs, University of East Anglia, value at risk, Vanguard fund, We are as Gods, Whole Earth Catalog

Once, after showing up for a Universa Christmas bash, which involved driving around Los Angeles in limousines, he crashed in the spacious trunk of the limo for the entire night’s festivities. When Spitznagel wasn’t trading options, herding goats, or trying out new goat cheeses, he was rubbing shoulders with some of the world’s biggest investors, including those running sovereign wealth funds, the deep-pocketed funds that invest on behalf of governments. The days of fruitlessly trying to explain the Black Swan stategy to clueless fund managers were over. Universa was in talks with China’s $300 billion fund, China Investment Corp., big Middle Eastern government funds, wealthy investors in European capitals such as London and Geneva, and giant pension funds across the U.S.


The Metropolitan Revolution: How Cities and Metros Are Fixing Our Broken Politics and Fragile Economy by Bruce Katz, Jennifer Bradley

"World Economic Forum" Davos, 3D printing, additive manufacturing, Affordable Care Act / Obamacare, benefit corporation, British Empire, business climate, carbon footprint, clean tech, clean water, collapse of Lehman Brothers, company town, congestion pricing, data science, deindustrialization, demographic transition, desegregation, Donald Shoup, double entry bookkeeping, edge city, Edward Glaeser, financial engineering, global supply chain, immigration reform, income inequality, industrial cluster, intermodal, Jane Jacobs, jitney, Kickstarter, knowledge economy, Lewis Mumford, lone genius, longitudinal study, Mark Zuckerberg, Masdar, megacity, megaproject, Menlo Park, Moneyball by Michael Lewis explains big data, Network effects, new economy, New Urbanism, Occupy movement, place-making, postindustrial economy, purchasing power parity, Quicken Loans, race to the bottom, Richard Florida, Shenzhen was a fishing village, Silicon Valley, smart cities, smart grid, sovereign wealth fund, tech worker, TechCrunch disrupt, TED Talk, the built environment, The Death and Life of Great American Cities, the market place, The Spirit Level, Tony Hsieh, too big to fail, trade route, transit-oriented development, urban planning, white flight, Yochai Benkler

The Manufacturing Institute estimates that “about 1.68 million Americans are directly employed by foreign-owned manufacturing firms.”44 Foreign equity investment is also a critical source of capital for largescale redevelopment projects. Throughout the country, there are numerous examples of significant investments in urban regeneration in cities and metropolitan areas by sovereign wealth funds. In Washington, D.C., for instance, the Qatari Investment Authority announced in 2011 its plan to invest $700 million in the redevelopment of a ten-acre mixed-use project on the site of the former downtown convention center. The CenterCityDC project is estimated to create as many as 1,700 construction jobs in the near term and an additional 3,700 permanent jobs on completion.45 As the world urbanizes, the United States has one other asset: U.S. metros and their leaders are singularly positioned to leverage the economic opportunities presented by global urbanization in ways that treat rising cities not just as markets but as partners grappling with supersize challenges.


pages: 484 words: 104,873

Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford

3D printing, additive manufacturing, Affordable Care Act / Obamacare, AI winter, algorithmic management, algorithmic trading, Amazon Mechanical Turk, artificial general intelligence, assortative mating, autonomous vehicles, banking crisis, basic income, Baxter: Rethink Robotics, Bernie Madoff, Bill Joy: nanobots, bond market vigilante , business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Charles Babbage, Chris Urmson, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, commoditize, computer age, creative destruction, data science, debt deflation, deep learning, deskilling, digital divide, disruptive innovation, diversified portfolio, driverless car, Erik Brynjolfsson, factory automation, financial innovation, Flash crash, Ford Model T, Fractional reserve banking, Freestyle chess, full employment, general purpose technology, Geoffrey Hinton, Goldman Sachs: Vampire Squid, Gunnar Myrdal, High speed trading, income inequality, indoor plumbing, industrial robot, informal economy, iterative process, Jaron Lanier, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Kenneth Arrow, Khan Academy, Kiva Systems, knowledge worker, labor-force participation, large language model, liquidity trap, low interest rates, low skilled workers, low-wage service sector, Lyft, machine readable, machine translation, manufacturing employment, Marc Andreessen, McJob, moral hazard, Narrative Science, Network effects, new economy, Nicholas Carr, Norbert Wiener, obamacare, optical character recognition, passive income, Paul Samuelson, performance metric, Peter Thiel, plutocrats, post scarcity, precision agriculture, price mechanism, public intellectual, Ray Kurzweil, rent control, rent-seeking, reshoring, RFID, Richard Feynman, Robert Solow, Rodney Brooks, Salesforce, Sam Peltzman, secular stagnation, self-driving car, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, single-payer health, software is eating the world, sovereign wealth fund, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, Steven Pinker, strong AI, Stuxnet, technological singularity, telepresence, telepresence robot, The Bell Curve by Richard Herrnstein and Charles Murray, The Coming Technological Singularity, The Future of Employment, the long tail, Thomas L Friedman, too big to fail, Tragedy of the Commons, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, union organizing, Vernor Vinge, very high income, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, women in the workforce

It’s possible that as the issue of inequality, and especially its impact on the political process in the United States, gains ever more visibility with the public, the kind of wealth tax that Piketty advocates might someday become viable. If so, I would argue that rather than portioning out redistributed capital to individuals, it would be better to set up a centrally managed sovereign wealth fund (similar to the Alaska fund) and then use the resulting returns to help fund a basic income. Near-Term Policies While the establishment of a guaranteed income will probably remain politically unfeasible for the foreseeable future, there are a number of other things that might prove helpful in the nearer term.


pages: 431 words: 107,868

The Great Race: The Global Quest for the Car of the Future by Levi Tillemann

Affordable Care Act / Obamacare, An Inconvenient Truth, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, banking crisis, Bear Stearns, car-free, carbon footprint, clean tech, creative destruction, decarbonisation, deindustrialization, demand response, Deng Xiaoping, Donald Trump, driverless car, electricity market, Elon Musk, en.wikipedia.org, energy security, factory automation, Fairchild Semiconductor, Ford Model T, foreign exchange controls, gigafactory, global value chain, high-speed rail, hydrogen economy, index card, Intergovernmental Panel on Climate Change (IPCC), joint-stock company, Joseph Schumpeter, Kanban, Kickstarter, manufacturing employment, market design, megacity, Nixon shock, obamacare, off-the-grid, oil shock, planned obsolescence, Ralph Nader, RFID, rolodex, Ronald Reagan, Rubik’s Cube, self-driving car, shareholder value, Shenzhen special economic zone , short squeeze, Silicon Valley, Silicon Valley startup, skunkworks, smart cities, Solyndra, sovereign wealth fund, special economic zone, Steve Jobs, Tesla Model S, too big to fail, Unsafe at Any Speed, zero-sum game, Zipcar

It looked like powerful VC groups from liberal California using their connections and resources to aggressively pursue government handouts.33 They were willing to go to great lengths and they were succeeding in getting money, but the results of these investments were clearly uneven. No “Perpetual Motion Machines” Of course, these investments were no easy task. And it is vital to remember that the purpose was not to fine-tune an asset portfolio for a new American sovereign wealth fund, but to salvage and stimulate the U.S. economy. In the wake of the financial meltdown the entire point of the stimulus was to move massive volumes of money out the door as quickly as possible. The fact that this ended up being a “green” stimulus was an added bonus. Responsibility for administering the “green” portion of these funds was delegated, overwhelmingly, to the Department of Energy.


pages: 358 words: 106,729

Fault Lines: How Hidden Fractures Still Threaten the World Economy by Raghuram Rajan

"World Economic Forum" Davos, accounting loophole / creative accounting, Alan Greenspan, Andrei Shleifer, Asian financial crisis, asset-backed security, assortative mating, bank run, barriers to entry, Bear Stearns, behavioural economics, Bernie Madoff, Bretton Woods, business climate, business cycle, carbon tax, Clayton Christensen, clean water, collapse of Lehman Brothers, collateralized debt obligation, colonial rule, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, currency risk, diversification, Edward Glaeser, financial innovation, fixed income, floating exchange rates, full employment, Glass-Steagall Act, global supply chain, Goldman Sachs: Vampire Squid, Greenspan put, illegal immigration, implied volatility, income inequality, index fund, interest rate swap, Joseph Schumpeter, Kaizen: continuous improvement, Kenneth Rogoff, knowledge worker, labor-force participation, Long Term Capital Management, longitudinal study, low interest rates, machine readable, market bubble, Martin Wolf, medical malpractice, microcredit, money market fund, moral hazard, new economy, Northern Rock, offshore financial centre, open economy, Phillips curve, price stability, profit motive, proprietary trading, Real Time Gross Settlement, Richard Florida, Richard Thaler, risk tolerance, Robert Shiller, Ronald Reagan, Savings and loan crisis, school vouchers, seminal paper, short selling, sovereign wealth fund, tail risk, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, upwardly mobile, Vanguard fund, women in the workforce, World Values Survey

One reason the authorities bail out financial-firm claim holders is that they do not know whether these claims are held by other financial firms: by letting the claims bear losses, they could be precipitating a cascade of failures. It is therefore important that regulators prohibit any levered financial firms from holding contingent convertibles or writing capital insurance (or, for that matter, holding unsecured long-term debt issued by other leveraged financial firms). Instead mutual funds, pension funds, and sovereign wealth funds should be the holders of choice. By requiring systemically important entities to have stronger buffers against failure, regulators would reduce the likelihood that they would take advantage of their status. If a firm is made near fail-safe by its equity cushion, the prospect of government protection against failure confers little advantage.


pages: 311 words: 17,232

Living in a Material World: The Commodity Connection by Kevin Morrison

addicted to oil, Alan Greenspan, An Inconvenient Truth, barriers to entry, Berlin Wall, biodiversity loss, carbon credits, carbon footprint, carbon tax, clean water, commoditize, commodity trading advisor, computerized trading, diversified portfolio, Doha Development Round, Elon Musk, energy security, European colonialism, flex fuel, food miles, Ford Model T, Great Grain Robbery, Gregor Mendel, Hernando de Soto, Hugh Fearnley-Whittingstall, hydrogen economy, Intergovernmental Panel on Climate Change (IPCC), junk bonds, Kickstarter, Long Term Capital Management, managed futures, Market Wizards by Jack D. Schwager, Michael Milken, new economy, North Sea oil, oil rush, oil shale / tar sands, oil shock, out of africa, Paul Samuelson, peak oil, planned obsolescence, price mechanism, Ronald Coase, Ronald Reagan, Silicon Valley, sovereign wealth fund, the payments system, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, uranium enrichment, vertical integration, young professional

This has seen a dramatic rise in the region’s economy, which has outpaced global economic growth rates for the past eight years (International Monetary Fund, 2007). The Middle East is spending on new infrastructure and oil and gas projects, as well as topping up public coffers (International Monetary Fund, 2007).6 According to the Asian Development Bank’s World Outlook 2007, the sovereign wealth fund of Abu Dhabi – the biggest oil-producing emirate of the UAE – had $875 bn at the end of June 2007. The large amounts of expenditure and saving by Middle Eastern governments is dependent on higher oil prices, which is something that these governments can help influence through Opec. With bulging pockets, Arab oil sheiks and sultans are broadening their economic influence by acquiring established businesses such as ports in the West, as well as taking large stakes in the world’s biggest investment banks.


pages: 376 words: 109,092

Paper Promises by Philip Coggan

accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, Alan Greenspan, balance sheet recession, bank run, banking crisis, barriers to entry, Bear Stearns, Berlin Wall, Bernie Madoff, Black Monday: stock market crash in 1987, Black Swan, bond market vigilante , Bretton Woods, British Empire, business cycle, call centre, capital controls, Carmen Reinhart, carried interest, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, debt deflation, delayed gratification, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, falling living standards, fear of failure, financial innovation, financial repression, fixed income, floating exchange rates, full employment, German hyperinflation, global reserve currency, Goodhart's law, Greenspan put, hiring and firing, Hyman Minsky, income inequality, inflation targeting, Isaac Newton, John Meriwether, joint-stock company, junk bonds, Kenneth Rogoff, Kickstarter, labour market flexibility, Les Trente Glorieuses, light touch regulation, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, market clearing, Martin Wolf, Minsky moment, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Myron Scholes, negative equity, Nick Leeson, Northern Rock, oil shale / tar sands, paradox of thrift, peak oil, pension reform, plutocrats, Ponzi scheme, price stability, principal–agent problem, purchasing power parity, quantitative easing, QWERTY keyboard, railway mania, regulatory arbitrage, reserve currency, Robert Gordon, Robert Shiller, Ronald Reagan, savings glut, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, Suez crisis 1956, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, time value of money, too big to fail, trade route, tulip mania, value at risk, Washington Consensus, women in the workforce, zero-sum game

As a result, investment returns were high as bond yields fell from their late 1970s peaks. From the late 1990s onwards, however, the main investors in government bonds were not retail investors or professional fund managers, looking to maximize returns. Instead they were central banks and sovereign wealth funds in Asia and the Middle East, looking to park the foreign exchange reserves earned through accumulating current account surpluses. Such buyers have been relatively indifferent to yield. Nevertheless, eventually even the patience of those investors must wear thin. By the autumn of 2011, government bond yields were very low round the world, leaving investors very vulnerable to inflation, currency depreciation or default.


pages: 385 words: 111,807

A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

"there is no alternative" (TINA), Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, antiwork, AOL-Time Warner, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Bear Stearns, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, Charles Babbage, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, corporate raider, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial engineering, financial innovation, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, Glass-Steagall Act, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, Great Leap Forward, greed is good, Gunnar Myrdal, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, information asymmetry, intangible asset, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land bank, land reform, liberation theology, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Neal Stephenson, Nelson Mandela, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, Pareto efficiency, Paul Samuelson, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, proprietary trading, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, scientific management, Scramble for Africa, search costs, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Vilfredo Pareto, Washington Consensus, working-age population, World Values Survey

They only deal with large investors, such as extremely rich individuals (‘high net worth individuals’ is the jargon) or institutional investors, that is, large funds created by individual investors pooling their money. The most important types of funds include: pension funds, investing money that individuals save for their pensions; sovereign wealth funds, which manage state-owned assets of a country (Government Pension Fund of Norway and Abu Dhabi Investment Council are two of the biggest examples); mutual funds or unit trusts, which manage money pooled by small individual investors that buy into them in the open market; hedge funds, which invest actively in high-risk, high-return assets, using a pool of large sums given to them by very rich individuals or other, more ‘conservative’, funds (e.g., pension funds); private equity funds, which are like hedge funds, but make money solely out of buying up companies, restructuring them and selling at a profit.


pages: 408 words: 108,985

Rewriting the Rules of the European Economy: An Agenda for Growth and Shared Prosperity by Joseph E. Stiglitz

"World Economic Forum" Davos, accelerated depreciation, Airbnb, Alan Greenspan, balance sheet recession, bank run, banking crisis, barriers to entry, Basel III, basic income, behavioural economics, benefit corporation, Berlin Wall, bilateral investment treaty, business cycle, business process, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, central bank independence, collapse of Lehman Brothers, collective bargaining, corporate governance, corporate raider, corporate social responsibility, creative destruction, credit crunch, deindustrialization, discovery of DNA, diversified portfolio, Donald Trump, eurozone crisis, Fall of the Berlin Wall, financial engineering, financial intermediation, Francis Fukuyama: the end of history, full employment, gender pay gap, George Akerlof, gig economy, Gini coefficient, Glass-Steagall Act, hiring and firing, housing crisis, Hyman Minsky, income inequality, independent contractor, inflation targeting, informal economy, information asymmetry, intangible asset, investor state dispute settlement, invisible hand, Isaac Newton, labor-force participation, liberal capitalism, low interest rates, low skilled workers, market fundamentalism, mini-job, moral hazard, non-tariff barriers, offshore financial centre, open economy, Paris climate accords, patent troll, pension reform, price mechanism, price stability, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, Robert Shiller, Ronald Reagan, selection bias, shareholder value, Silicon Valley, sovereign wealth fund, TaskRabbit, too big to fail, trade liberalization, transaction costs, transfer pricing, trickle-down economics, tulip mania, universal basic income, unorthodox policies, vertical integration, zero-sum game

The reforms proposed by the Troika (the European Central Bank, the European Commission, and the IMF) have been questioned in national courts, and were found unconstitutional in Portugal, Latvia, and Romania, thus leading to their reversals. World Social Protection Report 2014–15 (Geneva: International Labour Organization, 2014), p. 138. § The Irish National Pension Reserve Fund—a sovereign wealth fund established to finance civil service pensions—was tapped to participate in the IMF-led bailout of private banks, jeopardizing its future financial viability. ¶ There are many details associated with the public option that each country would have to work out. For instance, for these supplementary programs, early withdrawals could be allowed and pension savings could be used as collateral for housing mortgages


pages: 324 words: 106,699

Permanent Record by Edward Snowden

A Declaration of the Independence of Cyberspace, Aaron Swartz, air gap, Berlin Wall, call centre, Chelsea Manning, cloud computing, cognitive dissonance, company town, disinformation, drone strike, Edward Snowden, Fall of the Berlin Wall, Free Software Foundation, information security, it's over 9,000, job-hopping, John Perry Barlow, Julian Assange, Laura Poitras, Mark Zuckerberg, McMansion, Neal Stephenson, Occupy movement, off-the-grid, operational security, pattern recognition, peak oil, pre–internet, Rubik’s Cube, Silicon Valley, Skype, Snow Crash, sovereign wealth fund, surveillance capitalism, trade route, WikiLeaks, zero day

With a touch of a conspiratorial tone, he said that he worked in private wealth management. Within moments I was getting a full-on polished presentation about what, exactly, makes a private bank private, and the challenge of investing without moving markets when your clients are the size of sovereign wealth funds. “Your clients?” I asked. That’s when he said, “Most of my work is on Saudi accounts.” After a few minutes, I excused myself to go to the bathroom, and on the way there I leaned over to tell the CO who worked finance targets what I’d learned. After a necessarily too-long interval “fixing my hair,” or texting Lindsay in front of the bathroom mirror, I returned to find the CO sitting in my chair.


pages: 407 words: 104,622

The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution by Gregory Zuckerman

affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, Andrew Wiles, automated trading system, backtesting, Bayesian statistics, Bear Stearns, beat the dealer, behavioural economics, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Black Monday: stock market crash in 1987, blockchain, book value, Brownian motion, butter production in bangladesh, buy and hold, buy low sell high, Cambridge Analytica, Carl Icahn, Claude Shannon: information theory, computer age, computerized trading, Credit Default Swap, Daniel Kahneman / Amos Tversky, data science, diversified portfolio, Donald Trump, Edward Thorp, Elon Musk, Emanuel Derman, endowment effect, financial engineering, Flash crash, George Gilder, Gordon Gekko, illegal immigration, index card, index fund, Isaac Newton, Jim Simons, John Meriwether, John Nash: game theory, John von Neumann, junk bonds, Loma Prieta earthquake, Long Term Capital Management, loss aversion, Louis Bachelier, mandelbrot fractal, margin call, Mark Zuckerberg, Michael Milken, Monty Hall problem, More Guns, Less Crime, Myron Scholes, Naomi Klein, natural language processing, Neil Armstrong, obamacare, off-the-grid, p-value, pattern recognition, Peter Thiel, Ponzi scheme, prediction markets, proprietary trading, quantitative hedge fund, quantitative trading / quantitative finance, random walk, Renaissance Technologies, Richard Thaler, Robert Mercer, Ronald Reagan, self-driving car, Sharpe ratio, Silicon Valley, sovereign wealth fund, speech recognition, statistical arbitrage, statistical model, Steve Bannon, Steve Jobs, stochastic process, the scientific method, Thomas Bayes, transaction costs, Turing machine, Two Sigma

By early 2008, problems for subprime mortgages had infected almost every corner of the US and global stock and bond markets, but Medallion was thriving from the chaos, as usual, rising over 20 percent in the year’s first few months. Simons revived the idea of selling as much as 20 percent of Renaissance. In May 2008, Simons, Brown, and a few other Renaissance executives flew to Qatar to meet representatives of the country’s sovereign-wealth fund, to discuss selling a piece of Renaissance. Because they arrived on a Friday, a day of prayer for Muslims, their meetings couldn’t be scheduled until the next day. The hotel’s concierge recommended the group try dune bashing, a popular form of off-roading in which four-wheel-drive vehicles climb and then slide down steep sand dunes at high speeds and dangerous angles, much like a desert roller coaster.


pages: 344 words: 104,522

Woke, Inc: Inside Corporate America's Social Justice Scam by Vivek Ramaswamy

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 2021 United States Capitol attack, activist fund / activist shareholder / activist investor, affirmative action, Airbnb, Amazon Web Services, An Inconvenient Truth, anti-bias training, Bernie Sanders, Big Tech, BIPOC, Black Lives Matter, carbon footprint, clean tech, cloud computing, contact tracing, coronavirus, corporate governance, corporate social responsibility, COVID-19, critical race theory, crony capitalism, cryptocurrency, defund the police, deplatforming, desegregation, disinformation, don't be evil, Donald Trump, en.wikipedia.org, Eugene Fama: efficient market hypothesis, fudge factor, full employment, George Floyd, glass ceiling, global pandemic, green new deal, hiring and firing, Hyperloop, impact investing, independent contractor, index fund, Jeff Bezos, lockdown, Marc Benioff, Mark Zuckerberg, microaggression, military-industrial complex, Network effects, Parler "social media", plant based meat, Ponzi scheme, profit maximization, random walk, ride hailing / ride sharing, risk-adjusted returns, Robert Bork, Robinhood: mobile stock trading app, Ronald Reagan, Salesforce, self-driving car, shareholder value, short selling, short squeeze, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, single source of truth, Snapchat, social distancing, Social Responsibility of Business Is to Increase Its Profits, source of truth, sovereign wealth fund, Susan Wojcicki, the scientific method, Tim Cook: Apple, too big to fail, trade route, transcontinental railway, traveling salesman, trickle-down economics, Vanguard fund, Virgin Galactic, WeWork, zero-sum game

The Saudis had sent a fifteen-man team to the consulate, including a forensics doctor. The mission was led by Ahmad al Asiri, a close advisor to MBS; news reports claimed the Crown Prince personally assigned the assassination to him, though the Saudis deny that.4 Seven of the fifteen hit men were MBS’s personal bodyguards.5 Saudi Arabia’s sovereign wealth fund was an investor in an investment fund that had invested in my own company. As it turns out, that’s why I had been invited to meet the Crown Prince in the first place. After the Khashoggi incident, one of my close advisors gave me an alarming warning to keep an eye on the situation. “Just be careful with those guys,” he warned me, referring to the Saudis.


pages: 369 words: 107,073

Madoff Talks: Uncovering the Untold Story Behind the Most Notorious Ponzi Scheme in History by Jim Campbell

algorithmic trading, Bear Stearns, Bernie Madoff, currency risk, delta neutral, family office, fear of failure, financial thriller, fixed income, forensic accounting, full employment, Gordon Gekko, high net worth, index fund, Jim Simons, margin call, merger arbitrage, money market fund, mutually assured destruction, offshore financial centre, payment for order flow, Ponzi scheme, proprietary trading, Renaissance Technologies, risk free rate, riskless arbitrage, Robinhood: mobile stock trading app, Sharpe ratio, short selling, sovereign wealth fund, time value of money, two and twenty, walking around money

Not only could Bernie have still been in business, but at the 11 percent compounded faked returns, his customer assets more than a decade after the collapse of the Ponzi scheme might have reached $240 billion.* Bernie himself believed it. “In spite of what people thought. I stopped because the stress was killing me. I was still being offered money in huge sums from two sovereign wealth funds, the Pritzker family, as well as others.”2 In reality, he was having a rough time as a result of the financial crisis, desperately seeking more funds for the relentless cash appetite of a Ponzi scheme. He’d suffered net withdrawals of almost $6 billion (with the max the 703 account ever held being $5.6 billion, as Madoff told me).


Reset by Ronald J. Deibert

23andMe, active measures, air gap, Airbnb, Amazon Web Services, Anthropocene, augmented reality, availability heuristic, behavioural economics, Bellingcat, Big Tech, bitcoin, blockchain, blood diamond, Brexit referendum, Buckminster Fuller, business intelligence, Cal Newport, call centre, Cambridge Analytica, carbon footprint, cashless society, Citizen Lab, clean water, cloud computing, computer vision, confounding variable, contact tracing, contact tracing app, content marketing, coronavirus, corporate social responsibility, COVID-19, crowdsourcing, data acquisition, data is the new oil, decarbonisation, deep learning, deepfake, Deng Xiaoping, disinformation, Donald Trump, Doomsday Clock, dual-use technology, Edward Snowden, Elon Musk, en.wikipedia.org, end-to-end encryption, Evgeny Morozov, failed state, fake news, Future Shock, game design, gig economy, global pandemic, global supply chain, global village, Google Hangouts, Great Leap Forward, high-speed rail, income inequality, information retrieval, information security, Internet of things, Jaron Lanier, Jeff Bezos, John Markoff, Lewis Mumford, liberal capitalism, license plate recognition, lockdown, longitudinal study, Mark Zuckerberg, Marshall McLuhan, mass immigration, megastructure, meta-analysis, military-industrial complex, move fast and break things, Naomi Klein, natural language processing, New Journalism, NSO Group, off-the-grid, Peter Thiel, planetary scale, planned obsolescence, post-truth, proprietary trading, QAnon, ransomware, Robert Mercer, Sheryl Sandberg, Shoshana Zuboff, Silicon Valley, single source of truth, Skype, Snapchat, social distancing, sorting algorithm, source of truth, sovereign wealth fund, sparse data, speech recognition, Steve Bannon, Steve Jobs, Stuxnet, surveillance capitalism, techlash, technological solutionism, the long tail, the medium is the message, The Structural Transformation of the Public Sphere, TikTok, TSMC, undersea cable, unit 8200, Vannevar Bush, WikiLeaks, zero day, zero-sum game

Several of these countries are known to engage in systematic human rights violations, but that didn’t seem to concern Clearview AI’s CEO, who sidestepped whether the company does any due diligence around whether it will sell to government clients in countries in which being gay is a crime. The breach also showed that Clearview’s system was being queried by a sovereign wealth fund in the UAE, local police in India, and a think tank in Saudi Arabia. BuzzFeed’s analysis revealed a callous disregard at Clearview AI for legal or other guardrails against misuse. According to BuzzFeed, “Clearview has taken a flood-the-zone approach to seeking out new clients, providing access not just to organizations, but to individuals within those organizations — sometimes with little or no oversight or awareness from their own management.”


pages: 341 words: 107,933

The Dealmaker: Lessons From a Life in Private Equity by Guy Hands

Airbus A320, banking crisis, Bear Stearns, British Empire, Bullingdon Club, corporate governance, COVID-19, credit crunch, data science, deal flow, Etonian, family office, financial engineering, fixed income, flag carrier, high net worth, junk bonds, lockdown, Long Term Capital Management, low cost airline, Nelson Mandela, North Sea oil, old-boy network, Paul Samuelson, plutocrats, proprietary trading, Silicon Valley, South Sea Bubble, sovereign wealth fund, subprime mortgage crisis, traveling salesman

We also had to trim our fee structure to 1.5 per cent, when most private equity firms were being paid 2 per cent per annum. No matter – Mike and I left the meeting feeling elated. CPP unlocked the door for us. Soon another €100 million came from the state of North Carolina. Now we moved on to Abu Dhabi, where we gave a number of presentations to the Abu Dhabi Investment Authority (ADIA), a sovereign wealth fund. At our meeting in an old building in the Arab quarter, they told us we were competing with two blue-chip private equity firms for investment. As we left in the blazing heat, Mike and I talked about how we had done. We decided we had probably not quite made it. Half an hour after we got back to our hotel I received a call from ADIA.


pages: 367 words: 110,161

The Bond King: How One Man Made a Market, Built an Empire, and Lost It All by Mary Childs

Alan Greenspan, asset allocation, asset-backed security, bank run, Bear Stearns, beat the dealer, break the buck, buy and hold, Carl Icahn, collateralized debt obligation, commodity trading advisor, coronavirus, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, currency peg, diversification, diversified portfolio, Edward Thorp, financial innovation, fixed income, global macro, high net worth, hiring and firing, housing crisis, Hyman Minsky, index card, index fund, interest rate swap, junk bonds, Kevin Roose, low interest rates, Marc Andreessen, Minsky moment, money market fund, mortgage debt, Myron Scholes, NetJets, Northern Rock, off-the-grid, pneumatic tube, Ponzi scheme, price mechanism, quantitative easing, Robert Shiller, Savings and loan crisis, skunkworks, sovereign wealth fund, stem cell, Steve Jobs, stocks for the long run, The Great Moderation, too big to fail, Vanguard fund, yield curve

Its primary and most effective advertising was Bill Gross on TV, in The Wall Street Journal, along with its network of salespeople pushing its products to wirehouses that sold to the mom-and-pops; and its army of salespeople targeting pensions, insurance companies, and consultants, with their own vast institutional networks. The firm could tap more into sovereign wealth funds, the mega pools of money belonging to Singapore or China or Saudi Arabia, or the UAE. Or it could focus more on high-net-worth individuals. But to help with any of that, it needed something shiny to sell. That could be hedge funds, those high-fee vehicles that had proliferated after they emerged from the dot-com bust unbloodied and victorious—by 2007, it seemed a new one was founded every minute.


pages: 368 words: 106,185

A Shot to Save the World: The Inside Story of the Life-Or-Death Race for a COVID-19 Vaccine by Gregory Zuckerman

"World Economic Forum" Davos, Albert Einstein, blockchain, Boris Johnson, contact tracing, coronavirus, COVID-19, diversified portfolio, Donald Trump, double helix, Edward Jenner, future of work, Recombinant DNA, ride hailing / ride sharing, Silicon Valley, sovereign wealth fund, stealth mode startup, stem cell, Steve Jobs, TikTok, Travis Kalanick, WeWork

Moderna’s new factory, unveiled in 2018, came at an enormous expense for a company nowhere near recording profits. At the same time, research and other costs were also surging. Yes, Bancel was still finding investors willing to write enormous checks to cover their costs, another reason he was in such good spirits. In February 2018, he helped raise $500 million from Geneva-based Pictet Group, the sovereign wealth fund of Abu Dhabi, and New York hedge fund Viking Global Investors, among others. But many of Moderna’s newest backers weren’t health-care specialists. In corners of that world, skepticism of Bancel and Moderna had turned into outright derision, a shift in sentiment that was about to cause problems for the company.


pages: 312 words: 108,194

Invention: A Life by James Dyson

3D printing, additive manufacturing, augmented reality, Boris Johnson, Buckminster Fuller, car-free, carbon footprint, coronavirus, country house hotel, COVID-19, electricity market, Elon Musk, Etonian, Fellow of the Royal Society, Ford Model T, global supply chain, Google Glasses, Indoor air pollution, James Dyson, James Watt: steam engine, lockdown, microplastics / micro fibres, mittelstand, remote working, rewilding, Saturday Night Live, side project, Silicon Valley, Silicon Valley startup, social distancing, sovereign wealth fund, uranium enrichment, warehouse automation, Winter of Discontent, Yom Kippur War, young professional

A part of what is so special about Singapore is that everything, in terms of research, engineering, manufacturing, and commerce, connects within short distances, while the city is connected physically to a huge and growing regional market and, thanks to excellent communications, to the rest of the world. The Singapore government understands the operational needs of companies developing and manufacturing technology. It has several sovereign wealth funds specifically there to invest in new technology ideas and ventures. Intelligence from these wealth funds helps governments form their policies. Although a small island state, it has become the world’s second-largest exporter of technology. In 2012, we opened our first advanced and automated manufacturing facility in Singapore, known as SAM—Singapore Advanced Manufacturing.


pages: 356 words: 106,161

The Glass Half-Empty: Debunking the Myth of Progress in the Twenty-First Century by Rodrigo Aguilera

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Anthropocene, availability heuristic, barriers to entry, basic income, benefit corporation, Berlin Wall, Bernie Madoff, Bernie Sanders, bitcoin, Boris Johnson, Branko Milanovic, Bretton Woods, Brexit referendum, Capital in the Twenty-First Century by Thomas Piketty, capitalist realism, carbon footprint, Carmen Reinhart, centre right, clean water, cognitive bias, collapse of Lehman Brothers, Colonization of Mars, computer age, Corn Laws, corporate governance, corporate raider, creative destruction, cryptocurrency, cuban missile crisis, David Graeber, David Ricardo: comparative advantage, death from overwork, decarbonisation, deindustrialization, Deng Xiaoping, Doha Development Round, don't be evil, Donald Trump, Doomsday Clock, Dunning–Kruger effect, Elon Musk, European colonialism, fake news, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, fundamental attribution error, gig economy, Gini coefficient, Glass-Steagall Act, Great Leap Forward, green new deal, Hans Rosling, housing crisis, income inequality, income per capita, index fund, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, Jeff Bezos, Jeremy Corbyn, Jevons paradox, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, karōshi / gwarosa / guolaosi, Kenneth Rogoff, Kickstarter, lake wobegon effect, land value tax, Landlord’s Game, late capitalism, liberal capitalism, long peace, loss aversion, low interest rates, Mark Zuckerberg, market fundamentalism, means of production, meta-analysis, military-industrial complex, Mont Pelerin Society, moral hazard, moral panic, neoliberal agenda, Network effects, North Sea oil, Northern Rock, offshore financial centre, opioid epidemic / opioid crisis, Overton Window, Pareto efficiency, passive investing, Peter Thiel, plutocrats, principal–agent problem, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, risk tolerance, road to serfdom, Robert Shiller, Robert Solow, savings glut, Scientific racism, secular stagnation, Silicon Valley, Silicon Valley ideology, Slavoj Žižek, Social Justice Warrior, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Stanislav Petrov, Steven Pinker, structural adjustment programs, surveillance capitalism, tail risk, tech bro, TED Talk, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transatlantic slave trade, trolley problem, unbiased observer, universal basic income, Vilfredo Pareto, Washington Consensus, Winter of Discontent, Y2K, young professional, zero-sum game

A third proposal that is rapidly gaining attention is Universal Basic Services (UBS) which rather than provide a basic income, would provide citizens with free services such as housing, food, transport, and internet access; above those services that most states already provide free such as education and healthcare.37 Given that many of these services — most notoriously housing and transport — instantly wipe out a good chunk of each worker’s monthly paycheck, the income needed to lead a minimally decent life would be far lower if they were provided for free. Another proposal to complement UBI-like transfers would be a sovereign wealth fund (SWF). SWFs were popularized during the pre-crisis commodity boom as a way to manage the profits from resource wealth or current account surpluses for the national interest such as by placing them into pensions or for investment. The world’s largest SWF is Norway’s Government Pension Fund Global with $1.1 trillion in assets in 2018 (around $200,000 for every Norwegian citizen), which was capitalized almost entirely from North Sea oil wealth.


pages: 864 words: 272,918

Palo Alto: A History of California, Capitalism, and the World by Malcolm Harris

2021 United States Capitol attack, Aaron Swartz, affirmative action, air traffic controllers' union, Airbnb, Alan Greenspan, Alvin Toffler, Amazon Mechanical Turk, Amazon Web Services, Apple II, Apple's 1984 Super Bowl advert, back-to-the-land, bank run, Bear Stearns, Big Tech, Bill Gates: Altair 8800, Black Lives Matter, Bob Noyce, book scanning, British Empire, business climate, California gold rush, Cambridge Analytica, capital controls, Charles Lindbergh, classic study, cloud computing, collective bargaining, colonial exploitation, colonial rule, Colonization of Mars, commoditize, company town, computer age, conceptual framework, coronavirus, corporate personhood, COVID-19, cuban missile crisis, deindustrialization, Deng Xiaoping, desegregation, deskilling, digital map, double helix, Douglas Engelbart, Edward Snowden, Elon Musk, Erlich Bachman, estate planning, European colonialism, Fairchild Semiconductor, financial engineering, financial innovation, fixed income, Frederick Winslow Taylor, fulfillment center, future of work, Garrett Hardin, gentrification, George Floyd, ghettoisation, global value chain, Golden Gate Park, Google bus, Google Glasses, greed is good, hiring and firing, housing crisis, hydraulic fracturing, if you build it, they will come, illegal immigration, immigration reform, invisible hand, It's morning again in America, iterative process, Jeff Bezos, Joan Didion, John Markoff, joint-stock company, Jony Ive, Kevin Kelly, Kickstarter, knowledge worker, land reform, Larry Ellison, Lean Startup, legacy carrier, life extension, longitudinal study, low-wage service sector, Lyft, manufacturing employment, Marc Andreessen, Marc Benioff, Mark Zuckerberg, Marshall McLuhan, Max Levchin, means of production, Menlo Park, Metcalfe’s law, microdosing, Mikhail Gorbachev, military-industrial complex, Monroe Doctrine, Mont Pelerin Society, moral panic, mortgage tax deduction, Mother of all demos, move fast and break things, mutually assured destruction, new economy, Oculus Rift, off grid, oil shale / tar sands, PageRank, PalmPilot, passive income, Paul Graham, paypal mafia, Peter Thiel, pets.com, phenotype, pill mill, platform as a service, Ponzi scheme, popular electronics, power law, profit motive, race to the bottom, radical life extension, RAND corporation, Recombinant DNA, refrigerator car, Richard Florida, ride hailing / ride sharing, rising living standards, risk tolerance, Robert Bork, Robert Mercer, Robert Metcalfe, Ronald Reagan, Salesforce, San Francisco homelessness, Sand Hill Road, scientific management, semantic web, sexual politics, Sheryl Sandberg, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, social web, SoftBank, software as a service, sovereign wealth fund, special economic zone, Stanford marshmallow experiment, Stanford prison experiment, stem cell, Steve Bannon, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, stock buybacks, strikebreaker, Suez canal 1869, super pumped, TaskRabbit, tech worker, Teledyne, telemarketer, the long tail, the new new thing, thinkpad, Thorstein Veblen, Tim Cook: Apple, Tony Fadell, too big to fail, Toyota Production System, Tragedy of the Commons, transcontinental railway, traumatic brain injury, Travis Kalanick, TSMC, Uber and Lyft, Uber for X, uber lyft, ubercab, union organizing, Upton Sinclair, upwardly mobile, urban decay, urban renewal, value engineering, Vannevar Bush, vertical integration, Vision Fund, W. E. B. Du Bois, War on Poverty, warehouse robotics, Wargames Reagan, Washington Consensus, white picket fence, William Shockley: the traitorous eight, women in the workforce, Y Combinator, Y2K, Yogi Berra, éminence grise

He put $380 million in Twitter, and in 2011 he teamed with famed Silicon Valley angel Ron Conway to offer $150,000 to each and every start-up in the Bay Area tech accelerator Y Combinator, laying down a bet on the whole regional ecosystem.29 When it came out in 2017 that a significant amount of DST’s capital originated with the Russian state, the news yielded shrugs in the industry.30 No one could suck that kind of money out of the country without close ties to the government.vii And besides, sovereign wealth funds invest in Silicon Valley all the time. Saudi prince Al Waleed bin Talal made a crucial nine-figure investment in Apple in 1997.31 SoftBank, one of the biggest investment funds hunting in Silicon Valley, got most of its game-changing $100 billion Vision Fund from Gulf monarchies.32 Why wouldn’t Putin want to put money in Facebook?

When author Brad Stone asked Kalanick why the company raised over $10 billion in the previous two years alone, the billionaire’s answer comes off as more resigned than pumped: “If you didn’t do it, it would be a strategic disadvantage, especially when you’re operating globally,” he told Stone. “It’s not my preference for how to build a company, but it’s required when that money is available.”14 That last part is worth repeating: It’s required when that money is available. If Uber didn’t take $3.5 billion from Mohammed bin Salman and the Saudi kingdom’s sovereign wealth fund, the royals would have put it on Lyft, and then maybe no one would want to invest in Uber, and then it would all be over. These companies didn’t choose to become crabs—that’s not how evolution works. The founders couldn’t stop themselves any more than the railroad barons could. Staying in the game was much more important than any imminent prospect of profitability, and platforms courted big bucks from Russian oligarchs, Emirati sheikhs, and cosmopolitan capitalists of every stripe.


pages: 424 words: 115,035

How Will Capitalism End? by Wolfgang Streeck

"there is no alternative" (TINA), accounting loophole / creative accounting, air traffic controllers' union, Airbnb, Alan Greenspan, basic income, behavioural economics, Ben Bernanke: helicopter money, billion-dollar mistake, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, Clayton Christensen, collective bargaining, conceptual framework, corporate governance, creative destruction, credit crunch, David Brooks, David Graeber, debt deflation, deglobalization, deindustrialization, disruptive innovation, en.wikipedia.org, eurozone crisis, failed state, financial deregulation, financial innovation, first-past-the-post, fixed income, full employment, Gini coefficient, global reserve currency, Google Glasses, haute cuisine, income inequality, information asymmetry, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, junk bonds, Kenneth Rogoff, labour market flexibility, labour mobility, late capitalism, liberal capitalism, low interest rates, market bubble, means of production, military-industrial complex, moral hazard, North Sea oil, offshore financial centre, open borders, pension reform, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, post-industrial society, private sector deleveraging, profit maximization, profit motive, quantitative easing, reserve currency, rising living standards, Robert Gordon, savings glut, secular stagnation, shareholder value, sharing economy, sovereign wealth fund, tacit knowledge, technological determinism, The Future of Employment, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Uber for X, upwardly mobile, Vilfredo Pareto, winner-take-all economy, Wolfgang Streeck

In practice, it turned out to be possible, at least for a while, to keep interest rates low by deregulating financial markets while containing inflation through continued union-busting.8 Still, the US in particular, with its exceptionally low national savings rate, was soon selling its government bonds not just to citizens but also to foreign investors, including sovereign wealth funds of various sorts.9 Moreover, as debt burdens rose, a growing share of public spending had to be devoted to debt service, even with interest rates remaining low. Above all, there had to be a point, although apparently unknowable beforehand, at which creditors, foreign and domestic alike, would begin to worry about getting their money back.


pages: 436 words: 114,278

Crude Volatility: The History and the Future of Boom-Bust Oil Prices by Robert McNally

"World Economic Forum" Davos, Alan Greenspan, American energy revolution, Asian financial crisis, banking crisis, barriers to entry, Bear Stearns, Bretton Woods, collective bargaining, credit crunch, energy security, energy transition, geopolitical risk, housing crisis, hydraulic fracturing, Ida Tarbell, index fund, Induced demand, interchangeable parts, invisible hand, joint-stock company, market clearing, market fundamentalism, megaproject, moral hazard, North Sea oil, oil rush, oil shale / tar sands, oil shock, peak oil, price discrimination, price elasticity of demand, price stability, sovereign wealth fund, subprime mortgage crisis, Suez canal 1869, Suez crisis 1956, transfer pricing, vertical integration

The price run-up during 2004–2008 spawned accusations against speculators once again, especially against a new type of speculator: the “massive passives.”42 Unlike old-style speculators perfectly happy to either buy or sell oil contracts depending on which way they saw prices heading in the future, new “passive” or “long-only” investors only bought. Retail investors, pension funds, and sovereign wealth funds became interested in “long-only” holdings in oil and other commodities during the post-2000 commodity price boom. They sought oil and other commodity exposure because of weak returns on other asset classes like equities or bonds. In addition, commodities offered diversity and returns that were uncorrelated to the usual equities and bonds holdings.


pages: 401 words: 115,959

Philanthrocapitalism by Matthew Bishop, Michael Green, Bill Clinton

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, Abraham Maslow, Albert Einstein, An Inconvenient Truth, anti-communist, AOL-Time Warner, barriers to entry, battle of ideas, Bernie Madoff, Big Tech, Bob Geldof, Bonfire of the Vanities, business process, business process outsourcing, Charles Lindbergh, clean tech, clean water, corporate governance, corporate social responsibility, Dava Sobel, David Ricardo: comparative advantage, digital divide, do well by doing good, don't be evil, family office, financial innovation, full employment, global pandemic, global village, Global Witness, God and Mammon, Hernando de Soto, high net worth, Ida Tarbell, Intergovernmental Panel on Climate Change (IPCC), invisible hand, James Dyson, John Elkington, John Harrison: Longitude, joint-stock company, junk bonds, knowledge economy, knowledge worker, Larry Ellison, Live Aid, lone genius, Marc Andreessen, Marc Benioff, market bubble, mass affluent, Michael Milken, microcredit, Mikhail Gorbachev, Neil Armstrong, Nelson Mandela, new economy, offshore financial centre, old-boy network, PalmPilot, peer-to-peer lending, performance metric, Peter Singer: altruism, plutocrats, profit maximization, profit motive, Richard Feynman, risk tolerance, risk-adjusted returns, Ronald Coase, Ronald Reagan, Salesforce, scientific management, seminal paper, shareholder value, Silicon Valley, Slavoj Žižek, South Sea Bubble, sovereign wealth fund, SpaceShipOne, stem cell, Steve Jobs, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade liberalization, transaction costs, trickle-down economics, Tyler Cowen, wealth creators, winner-take-all economy, working poor, World Values Survey, X Prize

As a result of growth and innovation, there is now a huge variety of specialist fund managers, ranging from mutual fund companies like Fidelity to company or public sector pension funds, hedge funds, and private-equity firms. Even governments have been getting in on the act by creating specialist “sovereign wealth funds.” In each case, the aim of fund management—not always delivered—is to invest capital where it will have the greatest impact (i.e., the highest return) by using professional expertise that the owner of the money does not have. In philanthropy, too, the specialist fund manager is on the rise (and not just Bill Gates working for Warren Buffett).


pages: 399 words: 114,787

Dark Towers: Deutsche Bank, Donald Trump, and an Epic Trail of Destruction by David Enrich

"World Economic Forum" Davos, Affordable Care Act / Obamacare, Alan Greenspan, anti-globalists, Asian financial crisis, banking crisis, Bear Stearns, Berlin Wall, buy low sell high, collateralized debt obligation, commoditize, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, Donald Trump, East Village, estate planning, Fall of the Berlin Wall, financial innovation, forensic accounting, high net worth, housing crisis, interest rate derivative, interest rate swap, Jeffrey Epstein, junk bonds, London Interbank Offered Rate, low interest rates, Lyft, Mikhail Gorbachev, NetJets, obamacare, offshore financial centre, post-materialism, proprietary trading, Quicken Loans, Ralph Waldo Emerson, Renaissance Technologies, risk tolerance, Robert Mercer, rolodex, SoftBank, sovereign wealth fund, Steve Bannon, too big to fail, transcontinental railway, Vision Fund, yield curve

A month after he stepped down from Deutsche, he traveled to Saint Petersburg for an economic forum. Putin invited him to a private meeting. The Russian president had a proposition: Would he be interested in working for the Kremlin? Putin said the job on offer involved helping to run the country’s enormous and not-always-squeaky-clean sovereign-wealth fund. Ackermann said he was open to considering the gig. The job ultimately fell through, but it signaled just how intimate Deutsche had become with the Kremlin under Ackermann’s leadership. Directly off a busy parkway in Jacksonville, Florida, just down the street from the FBI’s field office, a three-story white office building with blue-tinted windows blended into the suburban sprawl.


The City on the Thames by Simon Jenkins

Ascot racecourse, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Boris Johnson, bread and circuses, Brexit referendum, British Empire, clean water, computerized trading, congestion charging, Corn Laws, cross-subsidies, Crossrail, deindustrialization, estate planning, Frank Gehry, gentrification, housing crisis, informal economy, Isaac Newton, Jane Jacobs, John Snow's cholera map, light touch regulation, Louis Blériot, negative equity, new economy, New Urbanism, Northern Rock, Peace of Westphalia, place-making, railway mania, Richard Florida, Right to Buy, South Sea Bubble, sovereign wealth fund, strikebreaker, the built environment, The Death and Life of Great American Cities, the market place, Traffic in Towns by Colin Buchanan, upwardly mobile, urban renewal, Winter of Discontent, women in the workforce

Lawson’s financial wild west was aided by the recent eruption in the global Eurodollar and petrodollar markets, on which a free-wheeling London was well placed to capitalize. Foreign banks poured into what seemed freedom city. Though there was an immediate loss of jobs in traditional banking, incoming firms led to rents in the City shooting up by 52 per cent between 1985 and 1989. Canary Wharf itself was rescued by a Qatari sovereign wealth fund, while foreign banks lapped up the Wharf’s cheap accommodation. They did not care where Poplar was, so long as it had a computerized trading floor, no taxes and no meddlesome government. By the end of the 1990s, the Isle of Dogs was employing 50,000 people, with its own new residential quarter spreading along the banks of the Thames.


pages: 573 words: 115,489

Prosperity Without Growth: Foundations for the Economy of Tomorrow by Tim Jackson

"World Economic Forum" Davos, Alan Greenspan, bank run, banking crisis, banks create money, Basel III, basic income, biodiversity loss, bonus culture, Boris Johnson, business cycle, carbon footprint, Carmen Reinhart, Cass Sunstein, choice architecture, circular economy, collapse of Lehman Brothers, creative destruction, credit crunch, Credit Default Swap, critique of consumerism, David Graeber, decarbonisation, degrowth, dematerialisation, en.wikipedia.org, energy security, financial deregulation, Financial Instability Hypothesis, financial intermediation, full employment, Garrett Hardin, Glass-Steagall Act, green new deal, Growth in a Time of Debt, Hans Rosling, Hyman Minsky, impact investing, income inequality, income per capita, intentional community, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, liberal capitalism, low interest rates, Mahatma Gandhi, mass immigration, means of production, meta-analysis, Money creation, moral hazard, mortgage debt, Murray Bookchin, Naomi Klein, negative emissions, new economy, ocean acidification, offshore financial centre, oil shale / tar sands, open economy, paradox of thrift, peak oil, peer-to-peer lending, Philip Mirowski, Post-Keynesian economics, profit motive, purchasing power parity, quantitative easing, retail therapy, Richard Thaler, road to serfdom, Robert Gordon, Robert Solow, Ronald Reagan, science of happiness, secular stagnation, short selling, Simon Kuznets, Skype, smart grid, sovereign wealth fund, Steve Jobs, TED Talk, The Chicago School, The Great Moderation, The Rise and Fall of American Growth, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, Tragedy of the Commons, universal basic income, Works Progress Administration, World Values Survey, zero-sum game

In fact, one of the most striking developments in the years since this book was first published is the rise of the so-called ‘divest–invest’ movement: a concerted effort, often student-led and supported by progressive funders, to shift investment markets away from fossil fuels and towards renewable energy, energy efficiency, resource productivity and clean technologies.24 The movement has gathered an impressive momentum in recent years, spurred on in particular by some high-profile divestments from major investors. In June 2015, the Norwegian parliament agreed to sell off all the coal-based assets in Norway’s $900 billion sovereign wealth fund. Divestment is vital not only to avoid locking in the damaging impacts of fossil fuel technologies for another half a century, but also to free up much-needed funds to invest in alternatives.25 Recapitalising the world’s energy systems for a low carbon world is a formidable challenge. In the run-up to the Paris conference in December 2015, the IEA estimated that just meeting the climate pledges made by participating nations would entail investments of $13.5 trillion in renewable energy and energy efficiency before the year 2030.


pages: 458 words: 116,832

The Costs of Connection: How Data Is Colonizing Human Life and Appropriating It for Capitalism by Nick Couldry, Ulises A. Mejias

"World Economic Forum" Davos, 23andMe, Airbnb, Amazon Mechanical Turk, Amazon Web Services, behavioural economics, Big Tech, British Empire, call centre, Cambridge Analytica, Cass Sunstein, choice architecture, cloud computing, colonial rule, computer vision, corporate governance, dark matter, data acquisition, data is the new oil, data science, deep learning, different worldview, digital capitalism, digital divide, discovery of the americas, disinformation, diversification, driverless car, Edward Snowden, emotional labour, en.wikipedia.org, European colonialism, Evgeny Morozov, extractivism, fake news, Gabriella Coleman, gamification, gig economy, global supply chain, Google Chrome, Google Earth, hiring and firing, income inequality, independent contractor, information asymmetry, Infrastructure as a Service, intangible asset, Internet of things, Jaron Lanier, job automation, Kevin Kelly, late capitalism, lifelogging, linked data, machine readable, Marc Andreessen, Mark Zuckerberg, means of production, military-industrial complex, move fast and break things, multi-sided market, Naomi Klein, Network effects, new economy, New Urbanism, PageRank, pattern recognition, payday loans, Philip Mirowski, profit maximization, Ray Kurzweil, RFID, Richard Stallman, Richard Thaler, Salesforce, scientific management, Scientific racism, Second Machine Age, sharing economy, Shoshana Zuboff, side hustle, Sidewalk Labs, Silicon Valley, Slavoj Žižek, smart cities, Snapchat, social graph, social intelligence, software studies, sovereign wealth fund, surveillance capitalism, techlash, The Future of Employment, the scientific method, Thomas Davenport, Tim Cook: Apple, trade liberalization, trade route, undersea cable, urban planning, W. E. B. Du Bois, wages for housework, work culture , workplace surveillance

Another example is when, as in China’s Xianjiang province in February 2017, the government banned petrol sales to anyone without GPS tracking installed in his or her car.114 The logical limit of consent is when—as is increasingly common in China today—paying for transactions or just walking around public space involves facial recognition by algorithmically enhanced tracking systems linked to national databases. The development of systems that manage these barely consensual relations is a growth area: the Beijing company Face ++ was valued at $1.5 billion before its latest fund-raising from the Chinese and Russian sovereign wealth funds.115 Not all data is immediately available to be commodified. Indeed, much data gathered by corporations may lack a value until a specific use for it can be found in the context of much larger data sets. But some data—for example, about potential interest in a purchase signaled when a link is clicked—may have a precise value on an advertising auction platform such as Google’s Adsense and Alibaba’s Alimama.


Human Frontiers: The Future of Big Ideas in an Age of Small Thinking by Michael Bhaskar

"Margaret Hamilton" Apollo, 3D printing, additive manufacturing, AI winter, Albert Einstein, algorithmic trading, AlphaGo, Anthropocene, artificial general intelligence, augmented reality, autonomous vehicles, backpropagation, barriers to entry, basic income, behavioural economics, Benoit Mandelbrot, Berlin Wall, Big bang: deregulation of the City of London, Big Tech, Bletchley Park, blockchain, Boeing 747, brain emulation, Brexit referendum, call centre, carbon tax, charter city, citizen journalism, Claude Shannon: information theory, Clayton Christensen, clean tech, clean water, cognitive load, Columbian Exchange, coronavirus, cosmic microwave background, COVID-19, creative destruction, CRISPR, crony capitalism, cyber-physical system, dark matter, David Graeber, deep learning, DeepMind, deindustrialization, dematerialisation, Demis Hassabis, demographic dividend, Deng Xiaoping, deplatforming, discovery of penicillin, disruptive innovation, Donald Trump, double entry bookkeeping, Easter island, Edward Jenner, Edward Lorenz: Chaos theory, Elon Musk, en.wikipedia.org, endogenous growth, energy security, energy transition, epigenetics, Eratosthenes, Ernest Rutherford, Eroom's law, fail fast, false flag, Fellow of the Royal Society, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, general purpose technology, germ theory of disease, glass ceiling, global pandemic, Goodhart's law, Google Glasses, Google X / Alphabet X, GPT-3, Haber-Bosch Process, hedonic treadmill, Herman Kahn, Higgs boson, hive mind, hype cycle, Hyperloop, Ignaz Semmelweis: hand washing, Innovator's Dilemma, intangible asset, interchangeable parts, Internet of things, invention of agriculture, invention of the printing press, invention of the steam engine, invention of the telegraph, invisible hand, Isaac Newton, ITER tokamak, James Watt: steam engine, James Webb Space Telescope, Jeff Bezos, jimmy wales, job automation, Johannes Kepler, John von Neumann, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, Large Hadron Collider, liberation theology, lockdown, lone genius, loss aversion, Louis Pasteur, Mark Zuckerberg, Martin Wolf, megacity, megastructure, Menlo Park, Minecraft, minimum viable product, mittelstand, Modern Monetary Theory, Mont Pelerin Society, Murray Gell-Mann, Mustafa Suleyman, natural language processing, Neal Stephenson, nuclear winter, nudge unit, oil shale / tar sands, open economy, OpenAI, opioid epidemic / opioid crisis, PageRank, patent troll, Peter Thiel, plutocrats, post scarcity, post-truth, precautionary principle, public intellectual, publish or perish, purchasing power parity, quantum entanglement, Ray Kurzweil, remote working, rent-seeking, Republic of Letters, Richard Feynman, Robert Gordon, Robert Solow, secular stagnation, shareholder value, Silicon Valley, Silicon Valley ideology, Simon Kuznets, skunkworks, Slavoj Žižek, sovereign wealth fund, spinning jenny, statistical model, stem cell, Steve Jobs, Stuart Kauffman, synthetic biology, techlash, TED Talk, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, Thomas Bayes, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, TikTok, total factor productivity, transcontinental railway, Two Sigma, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, uranium enrichment, We wanted flying cars, instead we got 140 characters, When a measure becomes a target, X Prize, Y Combinator

Earlier we saw how the West now has slower long-term productivity growth, lower and less successful business creation, more concentration among big established firms and lower overall growth. One key change, exemplified by Boeing's nineties shift, was in ownership, which was increasingly dominated by what two researchers call ‘gray capital’: pension funds, sovereign wealth funds, hedge funds . . . Eighty per cent of US stock is held by such institutions, more in the UK. Ownership of the firms driving large-scale innovation is hence diffuse, devolved to a cadre of professional asset managers removed from immediate responsibility, lacking a clear vision or leadership and relentlessly focused on quarterly earnings.


pages: 495 words: 114,451

Life on the Rocks: Building a Future for Coral Reefs by Juli Berwald

23andMe, 3D printing, Alfred Russel Wallace, Anthropocene, Black Lives Matter, carbon footprint, Charles Lindbergh, circular economy, clean water, coronavirus, COVID-19, en.wikipedia.org, Fellow of the Royal Society, financial innovation, Garrett Hardin, George Floyd, Google Earth, Gregor Mendel, Greta Thunberg, Intergovernmental Panel on Climate Change (IPCC), lateral thinking, Maui Hawaii, microbiome, mouse model, ocean acidification, Panamax, Paris climate accords, Skype, social distancing, sovereign wealth fund, stem cell, TED Talk, the scientific method, too big to fail, Tragedy of the Commons

But about a year later, just around the time I expected the XPRIZE to go live, the community dialogue went quiet, and then it disappeared entirely. I sent a note to Matt Mulrennan, who had introduced the XPRIZE at the meeting, asking for an update. As I had begun to suspect, the problem was funding. Originally, the country of Abu Dhabi, which has a sovereign wealth fund, was going to support the XPRIZE. But that effort hadn’t worked out. Other funders hadn’t been identified. This is a chronic problem. Ever since the possibility of launching humans into space was broached, humanity collectively turned its attention away from the dark, unknown seas in favor of the vast, mysterious heavens.


pages: 396 words: 113,613

Chokepoint Capitalism by Rebecca Giblin, Cory Doctorow

Aaron Swartz, AltaVista, barriers to entry, Berlin Wall, Bernie Sanders, Big Tech, big-box store, Black Lives Matter, book value, collective bargaining, commoditize, coronavirus, corporate personhood, corporate raider, COVID-19, disintermediation, distributed generation, Fairchild Semiconductor, fake news, Filter Bubble, financial engineering, Firefox, forensic accounting, full employment, gender pay gap, George Akerlof, George Floyd, gig economy, Golden age of television, Google bus, greed is good, green new deal, high-speed rail, Hush-A-Phone, independent contractor, index fund, information asymmetry, Jeff Bezos, John Gruber, Kickstarter, laissez-faire capitalism, low interest rates, Lyft, Mark Zuckerberg, means of production, microplastics / micro fibres, Modern Monetary Theory, moral hazard, multi-sided market, Naomi Klein, Network effects, New Journalism, passive income, peak TV, Peter Thiel, precision agriculture, regulatory arbitrage, remote working, rent-seeking, ride hailing / ride sharing, Robert Bork, Saturday Night Live, shareholder value, sharing economy, Silicon Valley, SoftBank, sovereign wealth fund, Steve Jobs, Steven Levy, stock buybacks, surveillance capitalism, Susan Wojcicki, tech bro, tech worker, The Chicago School, The Wealth of Nations by Adam Smith, TikTok, time value of money, transaction costs, trickle-down economics, Turing complete, Uber and Lyft, uber lyft, union organizing, Vanguard fund, vertical integration, WeWork

It suggests the firm “will continue to strategically purchase firms that aren’t able to sustain this latest cycle”—a polite way of saying they will gobble up distressed businesses at fire sale prices.17 Live Nation raised $1.2 billion in new capital in May 2020, and its share price has more than doubled since the early pandemic nadir. That was helped along by Saudi Arabia’s sovereign wealth fund, which became the third-largest shareholder after buying up a 5.7 percent stake.18 Through this book, we’ve been focusing on chokepoints, but this needs to be understood as an effect, rather than a cause. The cause of chokepoint capitalism is oligarchy, the concentration of wealth and power into too few hands.


pages: 386 words: 112,064

Rich White Men: What It Takes to Uproot the Old Boys' Club and Transform America by Garrett Neiman

"World Economic Forum" Davos, Affordable Care Act / Obamacare, Albert Einstein, basic income, Bernie Sanders, BIPOC, Black Lives Matter, Branko Milanovic, British Empire, Capital in the Twenty-First Century by Thomas Piketty, carried interest, clean water, confounding variable, coronavirus, COVID-19, critical race theory, dark triade / dark tetrad, data science, Donald Trump, drone strike, effective altruism, Elon Musk, gender pay gap, George Floyd, glass ceiling, green new deal, high net worth, Home mortgage interest deduction, Howard Zinn, impact investing, imposter syndrome, impulse control, income inequality, Jeff Bezos, Jeffrey Epstein, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge worker, Larry Ellison, liberal capitalism, Lyft, Mahatma Gandhi, mandatory minimum, Mark Zuckerberg, mass incarceration, means of production, meritocracy, meta-analysis, Michael Milken, microaggression, mortgage tax deduction, move fast and break things, Nelson Mandela, new economy, obamacare, occupational segregation, offshore financial centre, Paul Buchheit, Peter Thiel, plutocrats, Ralph Waldo Emerson, randomized controlled trial, rent-seeking, Ronald Reagan, Rutger Bregman, Sheryl Sandberg, Silicon Valley, Snapchat, sovereign wealth fund, Steve Jobs, subprime mortgage crisis, TED Talk, The Bell Curve by Richard Herrnstein and Charles Murray, Travis Kalanick, trickle-down economics, uber lyft, universal basic income, Upton Sinclair, War on Poverty, white flight, William MacAskill, winner-take-all economy, women in the workforce, work culture , working poor

The most robust evidence about the impact of relatively large unconditional cash transfers comes out of Kenya: when researchers Johannes Haushofer and Jeremy Shapiro gave low-income Kenyan households cash transfers that were enough to cover household expenses for two years, they found significant impacts on economic outcomes and psychological well-being.37 One approach that America could try is a universal basic capital. Economist Joseph Stiglitz suggests establishing a sovereign wealth fund, or national endowment, that distributes regular dividends to all citizens.38 Models for this approach already exist: Alaska has a fund that pays dividends to citizens from the state’s oil revenues; a Norway fund, also from oil revenues, pays into the general pension system; and citizens can draw from Singapore’s Central Provident Fund to pay for health and housing needs.


pages: 435 words: 120,574

Strangers in Their Own Land: Anger and Mourning on the American Right by Arlie Russell Hochschild

affirmative action, Affordable Care Act / Obamacare, Bernie Sanders, Black Lives Matter, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, clean water, collective bargaining, Deep Water Horizon, desegregation, Donald Trump, emotional labour, ending welfare as we know it, equal pay for equal work, Exxon Valdez, feminist movement, full employment, greed is good, guest worker program, invisible hand, knowledge economy, man camp, McMansion, minimum wage unemployment, new economy, obamacare, off-the-grid, oil shock, payday loans, precautionary principle, Richard Florida, Ronald Reagan, school vouchers, Silicon Valley, Solyndra, sovereign wealth fund, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, urban sprawl, working poor, Yogi Berra

It has a long coast and its people, like you, look to the water, boats, and fishing. Like you, Norway has oil. One difference between Louisiana and Norway, however, is their philosophy of governance and concept of freedom. Norwegians expect—and get—a great amount from their elected officials. Norway has the world’s largest sovereign wealth fund—$800 billion—and the vast majority of Norwegians live upper-middle-class lives. They enjoy the very high scores in health, education, and overall well-being that come with such affluence—they enjoy freedom from need. We Americans have our own culture, but at our best we’re good at drawing on good ideas from around the world.


pages: 413 words: 117,782

What Happened to Goldman Sachs: An Insider's Story of Organizational Drift and Its Unintended Consequences by Steven G. Mandis

activist fund / activist shareholder / activist investor, algorithmic trading, Bear Stearns, Berlin Wall, Bob Litterman, bonus culture, book value, BRICs, business process, buy and hold, Carl Icahn, collapse of Lehman Brothers, collateralized debt obligation, commoditize, complexity theory, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, disintermediation, diversification, eat what you kill, Emanuel Derman, financial innovation, fixed income, friendly fire, Glass-Steagall Act, Goldman Sachs: Vampire Squid, high net worth, housing crisis, junk bonds, London Whale, Long Term Capital Management, merger arbitrage, Myron Scholes, new economy, passive investing, performance metric, proprietary trading, radical decentralization, risk tolerance, Ronald Reagan, Saturday Night Live, Satyajit Das, shareholder value, short selling, sovereign wealth fund, subprime mortgage crisis, systems thinking, The Nature of the Firm, too big to fail, value at risk

Interestingly, they were both outside the US market. One was London’s Robert Maxwell, whom Goldman acquired at the very end of John L. Weinberg’s watch, when it was still trying to establish itself in London—and well before the IPO. The other recent example was Libya. In early 2008, Libya’s sovereign-wealth fund controlled by Col. Moammar Gadhafi gave $1.3 billion to Goldman to sink into a currency bet and other complicated trades. At one time, the investments lost 98 percent of their value. Also, according to reports, afterward Goldman had to arrange for security to protect its employees dealing with Libya.


pages: 460 words: 122,556

The End of Wall Street by Roger Lowenstein

"World Economic Forum" Davos, Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, Bear Stearns, benefit corporation, Berlin Wall, Bernie Madoff, Black Monday: stock market crash in 1987, Black Swan, break the buck, Brownian motion, Carmen Reinhart, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, fear of failure, financial deregulation, financial engineering, fixed income, geopolitical risk, Glass-Steagall Act, Greenspan put, high net worth, Hyman Minsky, interest rate derivative, invisible hand, junk bonds, Ken Thompson, Kenneth Rogoff, London Interbank Offered Rate, Long Term Capital Management, low interest rates, margin call, market bubble, Martin Wolf, Michael Milken, money market fund, moral hazard, mortgage debt, negative equity, Northern Rock, Ponzi scheme, profit motive, race to the bottom, risk tolerance, Ronald Reagan, Rubik’s Cube, Savings and loan crisis, savings glut, short selling, sovereign wealth fund, statistical model, the payments system, too big to fail, tulip mania, Y2K

CHAPTER 15 1 Some biographical details from Emily Thornton, “Morgan Stanley’s Mack Attack,” BusinessWeek, June 21, 2006. 2 Premiums: CMA (Credit Market Analysis). 3 Many details of Morgan’s Stanley’s duress are from Susan Pulliam, Liz Rappaport, Aaron Lucchetti, Jenny Strasburg, and Tom McGinty, “Anatomy of the Morgan Stanley Panic,” Wall Street Journal, November 24, 2008, and Lisa Kassenaar and Christine Harper, “Mack Tells Wife He May Lose Firm Before Brokerage Bid,” Bloomberg, January 26, 2009. 4 Kendrick Wilson, interview with the author. 5 Gretchen Morgenson and Don Van Natta Jr., “Paulson’s Calls to Goldman Tested Ethics During Crisis,” New York Times, August 8, 2009. 6 Joe Nocera, “As Credit Crisis Spiraled, Alarm Led to Action,” New York Times, October 2, 2008. 7 China announced that its sovereign wealth fund would invest $200 billion in shares of the country’s three largest banks. Russia approved a $120 billion plan to rescue its financial system. Both moves were announced September 18. On Bernanke, the New York Times (Edmund L. Andrews, Carl Hulse, and David M. Herszenhorn, “Federal Reserve and Treasury Offer Congress a Plan for a Vast Bailout,” September 19, 2008) estimated that the Fed pumped almost $300 billion into “global credit markets” on a single day. 8 Interviews with the author; see also Joe Nocera and Edmund L.


pages: 481 words: 120,693

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bear Stearns, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Black Swan, Boris Johnson, Branko Milanovic, Bretton Woods, BRICs, Bullingdon Club, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, disruptive innovation, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial engineering, financial innovation, Flash crash, Ford Model T, Frank Gehry, Gini coefficient, Glass-Steagall Act, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Max Levchin, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, seminal paper, Sheryl Sandberg, short selling, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, starchitect, stem cell, Steve Jobs, TED Talk, the long tail, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

On March 3, 2011, he resigned as director of the LSE because of the embarrassment he had caused the school by accepting a £1.5 million donation from Saif Gadhafi, son of the dictator, and agreeing to a £2.2 million deal to train Libyan civil servants. Sir Howard had also been a paid adviser to Libya’s sovereign wealth fund.) Once you get beyond how jarringly wrong all of these bold-faced names were, and how uniform, bipartisan, and international their consensus, you notice the epistemological wrong turn at the center of their mistake. The premise of this entire 2006–2007 conversation about the regulation of U.S. financial markets was that you learn whether your rules are working by asking the banks upon which they are imposed.


The Party: The Secret World of China's Communist Rulers by Richard McGregor

activist lawyer, banking crisis, corporate governance, credit crunch, Deng Xiaoping, financial innovation, Gini coefficient, glass ceiling, global reserve currency, Great Leap Forward, haute couture, high-speed rail, hiring and firing, income inequality, invisible hand, kremlinology, land reform, Martin Wolf, megaproject, Mikhail Gorbachev, military-industrial complex, old-boy network, one-China policy, Panopticon Jeremy Bentham, pre–internet, reserve currency, risk/return, Shenzhen special economic zone , South China Sea, sovereign wealth fund, special economic zone, Upton Sinclair

A retired Politburo member ominously suggested the US needed to make sure it ‘protected the interests of Asian countries’ if it wanted China to keep buying its debt. When it was his turn at the mike at the session in the resort’s Oriental Room, the man anointed as the global face of China Inc. dropped his polite façade as well. Lou Jiwei, as the first head of the China Investment Corporation, the country’s sovereign wealth fund, had been careful to project a conciliatory image since the body’s establishment in 2007. The first difficult years in the job had slowly soured Lou’s good cheer. The fund’s bold initial investments offshore had lost money, attracting vitriolic criticism at home. Abroad, Lou became bitter at the opposition he faced to investing in the US and Germany.


pages: 516 words: 116,875

Greater: Britain After the Storm by Penny Mordaunt, Chris Lewis

"World Economic Forum" Davos, 2021 United States Capitol attack, 3D printing, accelerated depreciation, Ada Lovelace, Airbnb, banking crisis, battle of ideas, behavioural economics, Bernie Madoff, bitcoin, Black Lives Matter, blockchain, Bob Geldof, Boeing 747, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, carbon footprint, Charles Babbage, collective bargaining, Corn Laws, corporate social responsibility, COVID-19, credit crunch, crowdsourcing, data is not the new oil, data is the new oil, David Attenborough, death from overwork, Deng Xiaoping, Diane Coyle, Donald Trump, Downton Abbey, driverless car, Elon Musk, en.wikipedia.org, experimental economics, failed state, fake news, Firefox, fixed income, full employment, gender pay gap, global pandemic, global supply chain, green new deal, happiness index / gross national happiness, high-speed rail, impact investing, Jeremy Corbyn, Khartoum Gordon, lateral thinking, Live Aid, lockdown, loss aversion, low skilled workers, microaggression, mittelstand, moral hazard, Neil Kinnock, Nelson Mandela, Ocado, off-the-grid, offshore financial centre, Panamax, Ponzi scheme, post-truth, quantitative easing, remote working, road to serfdom, Salesforce, Sheryl Sandberg, Skype, smart cities, social distancing, South China Sea, sovereign wealth fund, Steve Jobs, Steven Pinker, surveillance capitalism, transaction costs, transcontinental railway

The absence of national missions for the country flows into this issue, as does the need to aim high and be aspirational and the need for a large majority to deliver reform. The main problem is that the book requires every initiative to be evidence-based. If you want to do something with government money, you must be able to prove best practice. But what if you didn’t want to use government money? Suppose you wanted to bring in a sovereign wealth fund or create a new national bank that didn’t charge interest but only offered tax credits? We need to create an environment in which government doesn’t stop new initiatives without good reason. It needs a more organic entrepreneurial approach. Government rarely works in financial partnerships.


pages: 444 words: 124,631

Buy Now, Pay Later: The Extraordinary Story of Afterpay by Jonathan Shapiro, James Eyers

Airbnb, Alan Greenspan, Apple Newton, bank run, barriers to entry, Big Tech, Black Lives Matter, blockchain, book value, British Empire, clockwatching, cloud computing, collapse of Lehman Brothers, computer age, coronavirus, corporate governance, corporate raider, COVID-19, cryptocurrency, delayed gratification, diversification, Dogecoin, Donald Trump, Elon Musk, financial deregulation, George Floyd, greed is good, growth hacking, index fund, Jones Act, Kickstarter, late fees, light touch regulation, lockdown, low interest rates, managed futures, Max Levchin, meme stock, Mount Scopus, Network effects, new economy, passive investing, payday loans, paypal mafia, Peter Thiel, pre–internet, Rainbow capitalism, regulatory arbitrage, retail therapy, ride hailing / ride sharing, Robinhood: mobile stock trading app, rolodex, Salesforce, short selling, short squeeze, side hustle, Silicon Valley, Snapchat, SoftBank, sovereign wealth fund, tech bro, technology bubble, the payments system, TikTok, too big to fail, transaction costs, Vanguard fund

Afterpay was on track for inclusion into the ASX index of the twenty largest companies, and that meant multitrillion-dollar funds such as Blackrock and Vanguard had to accumulate Afterpay shares. So-called passive funds had grown in popularity as investors—from self-directed investors to enormous sovereign wealth funds—lost faith that the professionals who charged high fees could consistently beat the market. A better option was to pay lower fees and accept the returns of the market indices via the index funds. The net result was a global increase in passively managed funds from US$2.4 trillion a decade ago to US$12 trillion.


pages: 419 words: 130,627

Last Man Standing: The Ascent of Jamie Dimon and JPMorgan Chase by Duff McDonald

"World Economic Forum" Davos, Alan Greenspan, AOL-Time Warner, bank run, Bear Stearns, Blythe Masters, Bonfire of the Vanities, book value, business logic, centralized clearinghouse, collateralized debt obligation, conceptual framework, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Exxon Valdez, financial innovation, fixed income, G4S, Glass-Steagall Act, Greenspan put, housing crisis, interest rate swap, Jeff Bezos, John Meriwether, junk bonds, Kickstarter, laissez-faire capitalism, Long Term Capital Management, margin call, market bubble, Michael Milken, money market fund, moral hazard, negative equity, Nelson Mandela, Northern Rock, profit motive, proprietary trading, Renaissance Technologies, risk/return, Rod Stewart played at Stephen Schwarzman birthday party, Saturday Night Live, sovereign wealth fund, statistical model, Steve Ballmer, Steve Jobs, technology bubble, The Chicago School, too big to fail, Vanguard fund, zero-coupon bond, zero-sum game

“We are prepared to manage through this down part of the economic cycle, given the strength of our liquidity, credit reserves, capital and operating margins, and to successfully position our company well for the future,” said Dimon. Unlike most of his competitors, Dimon had not needed to go hat in hand to foreign sovereign wealth funds for a capital infusion, and the message was that he wouldn’t have to. He had, however, taken advantage of a relative respite in the market’s turmoil to issue $6 billion in preferred stock in an opportunity timed sale. JPMorgan Chase also knocked out Citigroup as Wall Street’s top underwriter in the first quarter of 2008.


pages: 430 words: 140,405

A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers by Lawrence G. Mcdonald, Patrick Robinson

"World Economic Forum" Davos, Alan Greenspan, AOL-Time Warner, asset-backed security, bank run, Bear Stearns, Black Monday: stock market crash in 1987, book value, business cycle, Carl Icahn, collateralized debt obligation, corporate raider, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, cuban missile crisis, diversification, fixed income, Glass-Steagall Act, high net worth, hiring and firing, if you build it, they will come, it's over 9,000, junk bonds, London Interbank Offered Rate, Long Term Capital Management, margin call, money market fund, moral hazard, mortgage debt, naked short selling, negative equity, new economy, Ronald Reagan, Savings and loan crisis, short selling, sovereign wealth fund, value at risk

Both of them were devoted to the commercial mortgage-backed securities—CMBS—another gigantic securitized debt portfolio, this one based on huge buildings not yet paid for with real money. Again, Lehman was slicing them up and packaging them, getting them rated AAA, and selling the bonds to banks, hedge funds, and sovereign wealth funds all over the world. Instead of the vast army of struggling homeowners, this derivative, the CMBS, offered the backing of major corporations in the form of cash flow paid by rents to those who owned the buildings. And so far as Dick and Joe were concerned, this was perfect: a hedge against the residential real estate, a safe diversification.


pages: 462 words: 129,022

People, Power, and Profits: Progressive Capitalism for an Age of Discontent by Joseph E. Stiglitz

affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, AlphaGo, antiwork, barriers to entry, basic income, battle of ideas, behavioural economics, Berlin Wall, Bernie Madoff, Bernie Sanders, Big Tech, business cycle, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, carried interest, central bank independence, clean water, collective bargaining, company town, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, crony capitalism, DeepMind, deglobalization, deindustrialization, disinformation, disintermediation, diversified portfolio, Donald Trump, driverless car, Edward Snowden, Elon Musk, Erik Brynjolfsson, fake news, Fall of the Berlin Wall, financial deregulation, financial innovation, financial intermediation, Firefox, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, George Akerlof, gig economy, Glass-Steagall Act, global macro, global supply chain, greed is good, green new deal, income inequality, information asymmetry, invisible hand, Isaac Newton, Jean Tirole, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John von Neumann, Joseph Schumpeter, labor-force participation, late fees, low interest rates, low skilled workers, Mark Zuckerberg, market fundamentalism, mass incarceration, meta-analysis, minimum wage unemployment, moral hazard, new economy, New Urbanism, obamacare, opioid epidemic / opioid crisis, patent troll, Paul Samuelson, pension reform, Peter Thiel, postindustrial economy, price discrimination, principal–agent problem, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, Richard Thaler, Robert Bork, Robert Gordon, Robert Mercer, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, search costs, secular stagnation, self-driving car, shareholder value, Shoshana Zuboff, Silicon Valley, Simon Kuznets, South China Sea, sovereign wealth fund, speech recognition, Steve Bannon, Steve Jobs, surveillance capitalism, TED Talk, The Chicago School, The Future of Employment, The Great Moderation, the market place, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, trickle-down economics, two-sided market, universal basic income, Unsafe at Any Speed, Upton Sinclair, uranium enrichment, War on Poverty, working-age population, Yochai Benkler

In some European countries, the decrease was even larger.8 So too, banks did a poor job in one of the central areas where intermediation was necessary—between long-term savers and long-term investors. Around the world, many of the savers are long-term—pension funds; university and foundation endowments; and sovereign wealth funds, which hold a country’s money for future generations. Many of the most important investment needs are also long-term, for example, infrastructure and retrofitting the world’s energy system to reflect the reality of climate change. But standing between long-term investors and long-term savers are shortsighted financial markets.


pages: 502 words: 128,126

Rule Britannia: Brexit and the End of Empire by Danny Dorling, Sally Tomlinson

3D printing, Ada Lovelace, Alfred Russel Wallace, anti-communist, anti-globalists, Big bang: deregulation of the City of London, Boris Johnson, Brexit referendum, British Empire, Bullingdon Club, Cambridge Analytica, centre right, colonial rule, Corn Laws, correlation does not imply causation, David Ricardo: comparative advantage, deindustrialization, disinformation, Dominic Cummings, Donald Trump, Edward Snowden, electricity market, en.wikipedia.org, epigenetics, Etonian, falling living standards, Flynn Effect, gentrification, housing crisis, illegal immigration, imperial preference, income inequality, inflation targeting, invisible hand, Jeremy Corbyn, knowledge economy, market fundamentalism, mass immigration, megacity, New Urbanism, Nick Leeson, North Sea oil, offshore financial centre, out of africa, Right to Buy, Ronald Reagan, Silicon Valley, South China Sea, sovereign wealth fund, spinning jenny, Steven Pinker, Suez canal 1869, Suez crisis 1956, The Wealth of Nations by Adam Smith, Thomas Malthus, University of East Anglia, Wayback Machine, We are the 99%, wealth creators

You might say that such profligacy was all in the distant past, but over the past forty years, Scotland’s North Sea oil has been largely squandered, to pay for 1980s tax cuts which mostly benefited better-off people in England, and which then encouraged economic inequality to grow further. This compares very badly with the Norwegian approach, where oil was and still is used to underwrite a sovereign wealth fund, and has been extracted more slowly as a result. Norway has also maintained high top income tax rates, which has discouraged vast disparities in pay between chief executives and workers. The British might have a poor record when it comes to carbon pollution but they have been good at banking and financial services, despite some very dodgy dealing.


pages: 483 words: 143,123

The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters by Gregory Zuckerman

activist fund / activist shareholder / activist investor, addicted to oil, Alan Greenspan, American energy revolution, Asian financial crisis, Bakken shale, Bear Stearns, Bernie Sanders, Buckminster Fuller, Carl Icahn, corporate governance, corporate raider, credit crunch, energy security, Exxon Valdez, Great Leap Forward, housing crisis, hydraulic fracturing, Kickstarter, LNG terminal, man camp, margin call, Maui Hawaii, North Sea oil, oil rush, oil shale / tar sands, oil shock, peak oil, Peter Thiel, reshoring, self-driving car, Silicon Valley, sovereign wealth fund, Steve Jobs, Timothy McVeigh, urban decay

But McClendon told Ralph Eads, the senior Houston investment banker at the firm Jefferies & Co., that he had an idea where to get the billions he needed. “If we’re going to look for new money, let’s go to Asia,” McClendon told his old college friend, well aware of the growing coffers of companies and sovereign wealth funds on that continent. “They have the money and they’re short on energy.” McClendon and Eads began traveling to Asia to sell stakes in new American fields suddenly churning out oil and gas. With remarkable speed, Chesapeake established a 600,000-net-acre position in the Eagle Ford in 2010 for $1.2 billion and then sold a one-third interest to the China National Offshore Oil Corporation for $2.2 billion.


pages: 486 words: 139,713

Land: How the Hunger for Ownership Shaped the Modern World by Simon Winchester

agricultural Revolution, British Empire, Cape to Cairo, climate change refugee, colonial rule, Donald Trump, Eratosthenes, European colonialism, Fellow of the Royal Society, Garrett Hardin, glass ceiling, Haight Ashbury, invention of the steam engine, Isaac Newton, James Watt: steam engine, Jeff Bezos, Jones Act, Khyber Pass, land reform, land tenure, land value tax, Mahatma Gandhi, Nelson Mandela, oil shale / tar sands, Ralph Nader, rewilding, Right to Buy, Ronald Reagan, Scramble for Africa, sovereign wealth fund, stakhanovite, Tragedy of the Commons, white flight, white picket fence

The business in which they played a critical part from its very beginnings is environmentally disastrous, but in the United States wildly popular—and similarly so in those countries that allow extractive industries like coal mining, oil drilling, and fracking to do more or less as they please. And under a succession of Republican presidents, governors, and Texas county bosses, so the Wilkses’ company, Frac Tech, made them millions, and very quickly. In 2011 they sold their young firm to a group of investors, led by the Singapore sovereign wealth fund, for $3.5 billion, of which they each kept $1.4 billion. They now had unimaginable wealth almost overnight, and after little enough thought they opted to spend as much of it as they could on buying grand parcels of western lands. It has not been an unalloyed success. Battles between private landowners and custodians of the public lands are nothing new in the American west, for sure—nor is rivalry between adjacent private owners either, as any student of American cinema will know all too well.


pages: 517 words: 139,477

Stocks for the Long Run 5/E: the Definitive Guide to Financial Market Returns & Long-Term Investment Strategies by Jeremy Siegel

Alan Greenspan, AOL-Time Warner, Asian financial crisis, asset allocation, backtesting, banking crisis, Bear Stearns, behavioural economics, Black Monday: stock market crash in 1987, Black-Scholes formula, book value, break the buck, Bretton Woods, business cycle, buy and hold, buy low sell high, California gold rush, capital asset pricing model, carried interest, central bank independence, cognitive dissonance, compound rate of return, computer age, computerized trading, corporate governance, correlation coefficient, Credit Default Swap, currency risk, Daniel Kahneman / Amos Tversky, Deng Xiaoping, discounted cash flows, diversification, diversified portfolio, dividend-yielding stocks, dogs of the Dow, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, Financial Instability Hypothesis, fixed income, Flash crash, forward guidance, fundamental attribution error, Glass-Steagall Act, housing crisis, Hyman Minsky, implied volatility, income inequality, index arbitrage, index fund, indoor plumbing, inflation targeting, invention of the printing press, Isaac Newton, it's over 9,000, John Bogle, joint-stock company, London Interbank Offered Rate, Long Term Capital Management, loss aversion, machine readable, market bubble, mental accounting, Minsky moment, Money creation, money market fund, mortgage debt, Myron Scholes, new economy, Northern Rock, oil shock, passive investing, Paul Samuelson, Peter Thiel, Ponzi scheme, prediction markets, price anchoring, price stability, proprietary trading, purchasing power parity, quantitative easing, random walk, Richard Thaler, risk free rate, risk tolerance, risk/return, Robert Gordon, Robert Shiller, Ronald Reagan, shareholder value, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, stocks for the long run, survivorship bias, technology bubble, The Great Moderation, the payments system, The Wisdom of Crowds, transaction costs, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, uptick rule, Vanguard fund

For non-dollar investors, bad news increases the demand for dollar-denominated assets and in particular Treasury bonds. This leads to an even higher negative correlation of U.S. Treasury bonds and stock markets measured in non-dollar currencies. Long-term Treasuries have de facto become the world’s ultimate “hedge” asset, and this explains why so many sovereign wealth funds hold a high percentage of their assets in Treasury bonds despite their very low yields and expected returns. The single asset class whose correlation with the equity markets has not been impacted by the financial crisis is gold. The rise in the price of gold after the financial crisis has been caused by the increased fear of hyperinflation and financial collapse, but the correlation with the equity markets has remained near zero over the past 50 years.


pages: 524 words: 130,909

The Contrarian: Peter Thiel and Silicon Valley's Pursuit of Power by Max Chafkin

3D printing, affirmative action, Airbnb, anti-communist, bank run, Bernie Sanders, Big Tech, bitcoin, Black Lives Matter, Black Monday: stock market crash in 1987, Blitzscaling, Boeing 747, borderless world, Cambridge Analytica, charter city, cloud computing, cognitive dissonance, Cornelius Vanderbilt, coronavirus, COVID-19, Credit Default Swap, cryptocurrency, David Brooks, David Graeber, DeepMind, digital capitalism, disinformation, don't be evil, Donald Trump, driverless car, Electric Kool-Aid Acid Test, Elon Musk, Ethereum, Extropian, facts on the ground, Fairchild Semiconductor, fake news, Ferguson, Missouri, Frank Gehry, Gavin Belson, global macro, Gordon Gekko, Greyball, growth hacking, guest worker program, Hacker News, Haight Ashbury, helicopter parent, hockey-stick growth, illegal immigration, immigration reform, Internet Archive, Jeff Bezos, John Markoff, Kevin Roose, Kickstarter, Larry Ellison, life extension, lockdown, low interest rates, Lyft, Marc Andreessen, Mark Zuckerberg, Maui Hawaii, Max Levchin, Menlo Park, military-industrial complex, moral panic, move fast and break things, Neal Stephenson, Nelson Mandela, Network effects, off grid, offshore financial centre, oil shale / tar sands, open borders, operational security, PalmPilot, Paris climate accords, Patri Friedman, paypal mafia, Peter Gregory, Peter Thiel, pets.com, plutocrats, Ponzi scheme, prosperity theology / prosperity gospel / gospel of success, public intellectual, QAnon, quantitative hedge fund, quantitative trading / quantitative finance, randomized controlled trial, regulatory arbitrage, Renaissance Technologies, reserve currency, ride hailing / ride sharing, risk tolerance, Robinhood: mobile stock trading app, Ronald Reagan, Sam Altman, Sand Hill Road, self-driving car, sharing economy, Sheryl Sandberg, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, Silicon Valley startup, skunkworks, social distancing, software is eating the world, sovereign wealth fund, Steve Bannon, Steve Jobs, Steven Levy, Stewart Brand, surveillance capitalism, TaskRabbit, tech billionaire, tech worker, TechCrunch disrupt, techlash, technology bubble, technoutopianism, Ted Kaczynski, TED Talk, the new new thing, the scientific method, Tim Cook: Apple, transaction costs, Travis Kalanick, Tyler Cowen, Uber and Lyft, uber lyft, Upton Sinclair, Vitalik Buterin, We wanted flying cars, instead we got 140 characters, Whole Earth Catalog, WikiLeaks, William Shockley: the traitorous eight, Y Combinator, Y2K, yellow journalism, Zenefits

Moreover, Thiel had been right about the rebound in stock prices, which started in December 2008, thanks to action by the Federal Reserve and the Bush and Obama administrations. He’d only missed the market’s bottom by a couple of months. Rightly or wrongly, Thiel came to believe that the real reason for the mass redemptions was Gawker Media. Some of Clarium’s big investors, according to former employees, were Arab sovereign wealth funds, controlled by governments that considered homosexuality to be a crime. Thiel has never explicitly acknowledged this, but he has hinted at why he might have wanted to keep his sexual orientation out of view. “If we talk about outing it’s never a simply factual thing,” Thiel said in a 2018 interview.


pages: 601 words: 135,202

Limitless: The Federal Reserve Takes on a New Age of Crisis by Jeanna Smialek

Alan Greenspan, bank run, banking crisis, Bear Stearns, Berlin Wall, Bernie Sanders, bitcoin, Black Lives Matter, blockchain, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, Colonization of Mars, coronavirus, COVID-19, crowdsourcing, cryptocurrency, decarbonisation, distributed ledger, Donald Trump, Fall of the Berlin Wall, fiat currency, financial engineering, financial innovation, financial intermediation, Fractional reserve banking, full employment, George Akerlof, George Floyd, Glass-Steagall Act, global pandemic, Henri Poincaré, housing crisis, income inequality, inflation targeting, junk bonds, laissez-faire capitalism, light touch regulation, lockdown, low interest rates, margin call, market bubble, market clearing, meme stock, Modern Monetary Theory, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Nixon shock, offshore financial centre, paradox of thrift, price stability, quantitative easing, race to the bottom, risk tolerance, Robinhood: mobile stock trading app, Ronald Reagan, secular stagnation, short squeeze, social distancing, sovereign wealth fund, The Great Moderation, too big to fail, trade route, Tragedy of the Commons, working-age population, yield curve

Deliberations about the reappointment had dragged on for long months, leaving pundits wondering if Biden would choose Powell, Brainard, or someone else entirely for the job. The decision, in some ways, completed the end of the early pandemic era in economic policy. Steven Mnuchin was long gone from government and back to building his fortune in finance. He had started a $2.5 billion investment fund in mid-2021, promptly raising money from the Saudi sovereign wealth fund—a deal so close to home relative to his government work that it looked like a possible payoff. It caused some ethics experts to suggest that top officials in U.S. government should have mandatory cooling-off periods before they jumped back into private work related to their public experience.[1] It had been clear since the 2020 election that Fed vice-chair Richard Clarida, also a Trump appointee, would not win a second term when his governor seat expired in early 2022.


pages: 514 words: 152,903

The Best Business Writing 2013 by Dean Starkman

Alvin Toffler, Asperger Syndrome, bank run, Basel III, Bear Stearns, call centre, carbon tax, clean water, cloud computing, collateralized debt obligation, Columbine, computer vision, Credit Default Swap, credit default swaps / collateralized debt obligations, crowdsourcing, Erik Brynjolfsson, eurozone crisis, Evgeny Morozov, Exxon Valdez, Eyjafjallajökull, factory automation, fixed income, fulfillment center, full employment, Future Shock, gamification, Goldman Sachs: Vampire Squid, hiring and firing, hydraulic fracturing, Ida Tarbell, income inequality, jimmy wales, job automation, John Markoff, junk bonds, Kickstarter, late fees, London Whale, low interest rates, low skilled workers, Mahatma Gandhi, market clearing, Maui Hawaii, Menlo Park, Occupy movement, oil shale / tar sands, One Laptop per Child (OLPC), Parag Khanna, Pareto efficiency, price stability, proprietary trading, Ray Kurzweil, San Francisco homelessness, Silicon Valley, Skype, sovereign wealth fund, stakhanovite, Stanford prison experiment, Steve Jobs, Stuxnet, synthetic biology, tail risk, technological determinism, the payments system, too big to fail, Vanguard fund, wage slave, warehouse automation, warehouse robotics, Y2K, zero-sum game

I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival. Over the course of my career I have had the privilege of advising two of the largest hedge funds on the planet, five of the largest asset managers in the United States, and three of the most prominent sovereign wealth funds in the Middle East and Asia. My clients have a total asset base of more than a trillion dollars. I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs.


pages: 504 words: 143,303

Why We Can't Afford the Rich by Andrew Sayer

"World Economic Forum" Davos, accounting loophole / creative accounting, Alan Greenspan, Albert Einstein, Anthropocene, anti-globalists, asset-backed security, banking crisis, banks create money, basic income, biodiversity loss, bond market vigilante , Boris Johnson, Bretton Woods, British Empire, Bullingdon Club, business cycle, call centre, capital controls, carbon footprint, carbon tax, collective bargaining, corporate raider, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Graeber, David Ricardo: comparative advantage, debt deflation, decarbonisation, declining real wages, deglobalization, degrowth, deindustrialization, delayed gratification, demand response, don't be evil, Double Irish / Dutch Sandwich, en.wikipedia.org, Etonian, financial engineering, financial innovation, financial intermediation, Fractional reserve banking, full employment, G4S, Goldman Sachs: Vampire Squid, green new deal, high net worth, high-speed rail, income inequality, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", James Dyson, job automation, Julian Assange, junk bonds, Kickstarter, labour market flexibility, laissez-faire capitalism, land bank, land value tax, long term incentive plan, low skilled workers, Mark Zuckerberg, market fundamentalism, Martin Wolf, mass immigration, means of production, moral hazard, mortgage debt, negative equity, neoliberal agenda, new economy, New Urbanism, Northern Rock, Occupy movement, offshore financial centre, oil shale / tar sands, patent troll, payday loans, Philip Mirowski, plutocrats, popular capitalism, predatory finance, price stability, proprietary trading, pushing on a string, quantitative easing, race to the bottom, rent-seeking, retail therapy, Ronald Reagan, shareholder value, short selling, sovereign wealth fund, Steve Jobs, tacit knowledge, TED Talk, The Nature of the Firm, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transfer pricing, trickle-down economics, universal basic income, unpaid internship, upwardly mobile, Washington Consensus, wealth creators, WikiLeaks, Winter of Discontent, working poor, Yom Kippur War, zero-sum game

It was also driven by an expansion of demand for them – ‘a growing “wall of money” chasing yield’40 – from spare cash seeking ‘investments’, at a time when productive investment outlets have been choked by overcapacity and slow growth in demand. As we’ve seen, one source of this surplus capital looking for outlets was non-finance companies, switching into financial investment. A second source was so-called sovereign wealth funds held by governments, such as China and Saudi Arabia, that had large trade surpluses to ‘invest’. They account for 1.5% of the world’s total private wealth, equal to the share of the world’s billionaires.41 They too faced limited opportunities for profitable productive investment, so much of their activity has been rent-seeking – for example, buying up land in Africa in anticipation of future commercial exploitation, or property in the US in the expectation of price inflation.


pages: 790 words: 150,875

Civilization: The West and the Rest by Niall Ferguson

Admiral Zheng, agricultural Revolution, Albert Einstein, Andrei Shleifer, Atahualpa, Ayatollah Khomeini, Berlin Wall, BRICs, British Empire, business cycle, clean water, collective bargaining, colonial rule, conceptual framework, Copley Medal, corporate governance, creative destruction, credit crunch, David Ricardo: comparative advantage, Dean Kamen, delayed gratification, Deng Xiaoping, discovery of the americas, Dissolution of the Soviet Union, Easter island, European colonialism, Fall of the Berlin Wall, financial engineering, Francisco Pizarro, full employment, Great Leap Forward, Gregor Mendel, guns versus butter model, Hans Lippershey, haute couture, Hernando de Soto, income inequality, invention of movable type, invisible hand, Isaac Newton, James Hargreaves, James Watt: steam engine, John Harrison: Longitude, joint-stock company, Joseph Schumpeter, Kickstarter, Kitchen Debate, land reform, land tenure, liberal capitalism, Louis Pasteur, Mahatma Gandhi, market bubble, Martin Wolf, mass immigration, means of production, megacity, Mikhail Gorbachev, new economy, Pearl River Delta, Pierre-Simon Laplace, power law, probability theory / Blaise Pascal / Pierre de Fermat, profit maximization, purchasing power parity, quantitative easing, rent-seeking, reserve currency, retail therapy, road to serfdom, Ronald Reagan, savings glut, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special economic zone, spice trade, spinning jenny, Steve Jobs, Steven Pinker, subprime mortgage crisis, Suez canal 1869, Suez crisis 1956, The Great Moderation, the market place, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Thorstein Veblen, total factor productivity, trade route, transaction costs, transatlantic slave trade, undersea cable, upwardly mobile, uranium enrichment, wage slave, Washington Consensus, women in the workforce, work culture , World Values Survey

But we don’t have to wait for everything to be satisfactory or human rights to be perfect.’51 Growing overseas investment in natural resources not only makes sense as a diversification strategy to reduce China’s exposure to the risk of dollar depreciation. It also allows China to increase its financial power, not least through its vast and influential sovereign wealth fund, China Investment Corporation, which has around $200 billion of assets. And investment abroad justifies China’s ambitious plans for naval expansion. In the words of Rear Admiral Zhang Huachen, Deputy Commander of the East Sea Fleet: ‘With the expansion of the country’s economic interests, the navy wants to better protect the country’s transportation routes and the safety of our major sea-lanes.’52 The South China Sea is increasingly regarded as a ‘core national interest’ and deep-water ports are projected in Pakistan – in the former Omani enclave of Gwadar – as well as in Burma and Sri Lanka.


pages: 482 words: 149,351

The Finance Curse: How Global Finance Is Making Us All Poorer by Nicholas Shaxson

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Airbnb, airline deregulation, Alan Greenspan, anti-communist, bank run, banking crisis, Basel III, Bear Stearns, benefit corporation, Bernie Madoff, Big bang: deregulation of the City of London, Blythe Masters, Boris Johnson, Bretton Woods, British Empire, business climate, business cycle, capital controls, carried interest, Cass Sunstein, Celtic Tiger, central bank independence, centre right, Clayton Christensen, cloud computing, corporate governance, corporate raider, creative destruction, Credit Default Swap, cross-subsidies, David Ricardo: comparative advantage, demographic dividend, Deng Xiaoping, desegregation, Donald Trump, Etonian, export processing zone, failed state, fake news, falling living standards, family office, financial deregulation, financial engineering, financial innovation, forensic accounting, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, Glass-Steagall Act, global supply chain, Global Witness, high net worth, Ida Tarbell, income inequality, index fund, invisible hand, Jeff Bezos, junk bonds, Kickstarter, land value tax, late capitalism, light touch regulation, London Whale, Long Term Capital Management, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, megaproject, Michael Milken, Money creation, Mont Pelerin Society, moral hazard, neoliberal agenda, Network effects, new economy, Northern Rock, offshore financial centre, old-boy network, out of africa, Paul Samuelson, plutocrats, Ponzi scheme, price mechanism, proprietary trading, purchasing power parity, pushing on a string, race to the bottom, regulatory arbitrage, rent-seeking, road to serfdom, Robert Bork, Ronald Coase, Ronald Reagan, Savings and loan crisis, seminal paper, shareholder value, sharing economy, Silicon Valley, Skype, smart grid, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, special economic zone, Steve Ballmer, Steve Jobs, stock buybacks, Suez crisis 1956, The Chicago School, Thorstein Veblen, too big to fail, Tragedy of the Commons, transfer pricing, two and twenty, vertical integration, Wayback Machine, wealth creators, white picket fence, women in the workforce, zero-sum game

Number 17 is ‘Aiding and abetting money laundering for violent drugs cartels’, a reference to, among other things, the role played by HSBC in washing hundreds of millions of dollars for Russian gangsters and for Mexico’s Sinaloa cartel. Number 19 is ‘Manipulation of Libor’, referring to the numbers used to calculate payments in the $800 trillion derivatives market, and a whole lot more besides. Number 61 is the less weighty ‘Offers to procure prostitutes to curry favour with Sovereign Wealth Fund clients’. Tucked away at number 109, there’s ‘Facilitating African money laundering on a grand scale’. At the time of writing, this list contained 144 items – and counting. Each represents a large can of villainous worms. And this is only a partial list of the misdeeds – and even then, this only refers to banks.


pages: 585 words: 151,239

Capitalism in America: A History by Adrian Wooldridge, Alan Greenspan

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, agricultural Revolution, air freight, Airbnb, airline deregulation, Alan Greenspan, American Society of Civil Engineers: Report Card, Asian financial crisis, bank run, barriers to entry, Bear Stearns, Berlin Wall, Blitzscaling, Bonfire of the Vanities, book value, Bretton Woods, British Empire, business climate, business cycle, business process, California gold rush, Charles Lindbergh, cloud computing, collateralized debt obligation, collective bargaining, Corn Laws, Cornelius Vanderbilt, corporate governance, corporate raider, cotton gin, creative destruction, credit crunch, debt deflation, Deng Xiaoping, disruptive innovation, Donald Trump, driverless car, edge city, Elon Musk, equal pay for equal work, Everybody Ought to Be Rich, Fairchild Semiconductor, Fall of the Berlin Wall, fiat currency, financial deregulation, financial engineering, financial innovation, fixed income, Ford Model T, full employment, general purpose technology, George Gilder, germ theory of disease, Glass-Steagall Act, global supply chain, Great Leap Forward, guns versus butter model, hiring and firing, Ida Tarbell, income per capita, indoor plumbing, informal economy, interchangeable parts, invention of the telegraph, invention of the telephone, Isaac Newton, Jeff Bezos, jimmy wales, John Maynard Keynes: technological unemployment, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, labor-force participation, land bank, Lewis Mumford, Louis Pasteur, low interest rates, low skilled workers, manufacturing employment, market bubble, Mason jar, mass immigration, McDonald's hot coffee lawsuit, means of production, Menlo Park, Mexican peso crisis / tequila crisis, Michael Milken, military-industrial complex, minimum wage unemployment, mortgage debt, Myron Scholes, Network effects, new economy, New Urbanism, Northern Rock, oil rush, oil shale / tar sands, oil shock, Peter Thiel, Phillips curve, plutocrats, pneumatic tube, popular capitalism, post-industrial society, postindustrial economy, price stability, Productivity paradox, public intellectual, purchasing power parity, Ralph Nader, Ralph Waldo Emerson, RAND corporation, refrigerator car, reserve currency, rising living standards, road to serfdom, Robert Gordon, Robert Solow, Ronald Reagan, Sand Hill Road, savings glut, scientific management, secular stagnation, Silicon Valley, Silicon Valley startup, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, stem cell, Steve Jobs, Steve Wozniak, strikebreaker, supply-chain management, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, total factor productivity, trade route, transcontinental railway, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, Unsafe at Any Speed, Upton Sinclair, urban sprawl, Vannevar Bush, vertical integration, War on Poverty, washing machines reduced drudgery, Washington Consensus, white flight, wikimedia commons, William Shockley: the traitorous eight, women in the workforce, Works Progress Administration, Yom Kippur War, young professional

By the first quarter of 2007, the situation was dire. Almost all new subprime mortgages were being securitized, compared with less than half in 2000. Securitizers, protected by the (grossly inflated) credit ratings, found a seemingly limitless global market for their products, ranging from Icelandic banks to Asian and Middle Eastern sovereign wealth funds. The book value of subprime mortgage securities stood at more than $800 billion, almost seven times their level at the end of 2001. Fannie and Freddie made the problem even worse by cloaking the size of America’s subprime problem with defective bookkeeping. Organizational changes on Wall Street also encouraged risky behavior.


pages: 505 words: 147,916

Adventures in the Anthropocene: A Journey to the Heart of the Planet We Made by Gaia Vince

3D printing, agricultural Revolution, Anthropocene, bank run, biodiversity loss, car-free, carbon footprint, carbon tax, circular economy, citizen journalism, clean water, climate change refugee, congestion charging, crowdsourcing, decarbonisation, deindustrialization, driverless car, energy security, failed state, Google Earth, Haber-Bosch Process, hive mind, hobby farmer, informal economy, Intergovernmental Panel on Climate Change (IPCC), ITER tokamak, Kickstarter, Late Heavy Bombardment, load shedding, M-Pesa, Mars Rover, Masdar, megacity, megaproject, microdosing, mobile money, Neil Armstrong, ocean acidification, off grid, oil shale / tar sands, out of africa, Peter Thiel, phenotype, planetary scale, planned obsolescence, Ray Kurzweil, rewilding, Silicon Valley, Skype, smart cities, smart grid, smart meter, South China Sea, sovereign wealth fund, stem cell, supervolcano, sustainable-tourism, synthetic biology

And if we aim for 2°C, maybe we would find it easier then to keep within 1.5°C’ (In fact, as I’ve mentioned, many scientists now think we’re headed for a 4°C temperature rise by the end of the century.) Anni’s many ideas are radical, and include geoengineering artificial coastlines and islands within the archipelago, constructing floating islands, and even buying land in a foreign country to relocate the entire Maldivian population, using the sovereign wealth fund. That is something that has never been tried before outside of colonial conquest, and it’s difficult to imagine the practicalities of a state within a state existing in the current political landscape. Yet ideas like these will be considered increasingly seriously in the Anthropocene, as each disappearing state seeks to find its own solution to what to do when climate change steals their country.


pages: 497 words: 150,205

European Spring: Why Our Economies and Politics Are in a Mess - and How to Put Them Right by Philippe Legrain

3D printing, Airbnb, Alan Greenspan, Asian financial crisis, bank run, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, book value, Boris Johnson, Bretton Woods, BRICs, British Empire, business cycle, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, clean tech, collaborative consumption, collapse of Lehman Brothers, collective bargaining, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Crossrail, currency manipulation / currency intervention, currency peg, debt deflation, Diane Coyle, disruptive innovation, Downton Abbey, Edward Glaeser, Elon Musk, en.wikipedia.org, energy transition, eurozone crisis, fear of failure, financial deregulation, financial engineering, first-past-the-post, Ford Model T, forward guidance, full employment, Gini coefficient, global supply chain, Great Leap Forward, Growth in a Time of Debt, high-speed rail, hiring and firing, hydraulic fracturing, Hyman Minsky, Hyperloop, immigration reform, income inequality, interest rate derivative, Intergovernmental Panel on Climate Change (IPCC), Irish property bubble, James Dyson, Jane Jacobs, job satisfaction, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, labour mobility, land bank, liquidity trap, low interest rates, margin call, Martin Wolf, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, North Sea oil, Northern Rock, offshore financial centre, oil shale / tar sands, oil shock, open economy, peer-to-peer rental, price stability, private sector deleveraging, pushing on a string, quantitative easing, Richard Florida, rising living standards, risk-adjusted returns, Robert Gordon, savings glut, school vouchers, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart grid, smart meter, software patent, sovereign wealth fund, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, Tyler Cowen, Tyler Cowen: Great Stagnation, working-age population, Zipcar

Ideally, big financial institutions ought to be broken up into a diverse range of smaller, simpler and safer ones, many of them partnerships with unlimited liability (as they used to be). If you gamble with other people’s money, you ought to have skin in the game. A financial system with a greater diversity of investors could cope better with disruptions: witness how cash-rich, long-term investors such as Warren Buffett, the American billionaire investor, and sovereign-wealth funds helped stabilise banks by buying into them in the crash. Healthy financial systems require investors with a wide range of investment horizons, a diversity of ability to bear risk, and a mix of bulls and bears. If investors are affected differently by a particular change – and react differently to it – the system as a whole will be better able to cope.


pages: 579 words: 160,351

Breaking News: The Remaking of Journalism and Why It Matters Now by Alan Rusbridger

"World Economic Forum" Davos, accounting loophole / creative accounting, Airbnb, Andy Carvin, banking crisis, Bellingcat, Bernie Sanders, Bletchley Park, Boris Johnson, Brexit referendum, Cambridge Analytica, centre right, Chelsea Manning, citizen journalism, country house hotel, cross-subsidies, crowdsourcing, data science, David Attenborough, David Brooks, death of newspapers, Donald Trump, Doomsday Book, Double Irish / Dutch Sandwich, Downton Abbey, Edward Snowden, Etonian, Evgeny Morozov, fake news, Filter Bubble, folksonomy, forensic accounting, Frank Gehry, future of journalism, G4S, high net worth, information security, invention of movable type, invention of the printing press, Jeff Bezos, jimmy wales, Julian Assange, Large Hadron Collider, Laura Poitras, Mark Zuckerberg, Mary Meeker, Menlo Park, natural language processing, New Journalism, offshore financial centre, oil shale / tar sands, open borders, packet switching, Panopticon Jeremy Bentham, post-truth, pre–internet, ransomware, recommendation engine, Ruby on Rails, sexual politics, Silicon Valley, Skype, Snapchat, social web, Socratic dialogue, sovereign wealth fund, speech recognition, Steve Bannon, Steve Jobs, the long tail, The Wisdom of Crowds, Tim Cook: Apple, traveling salesman, upwardly mobile, WikiLeaks, Yochai Benkler

The hashtag #keepitintheground somehow stayed – used, for instance, by the French president in December 2017 in a tweet announcing that his was the first country to ban any new oil-exploration licences with immediate effect. An FT comment piece about the behaviour of investment institutions by John Plender remarked: ‘something momentous is going on’.37 What had been a trickle of divestment became a stream. Universities, pension funds and sovereign wealth funds began to get their money out of the most polluting fossil fuels, with pledges to ditch $2.6 trillion from coal. Cambridge University blacklisted coal and tar sands companies. Within a year the FT was reporting a poll that showed two thirds of adults agreeing that fossil fuel investments were risky.


pages: 524 words: 154,652

Blood in the Machine: The Origins of the Rebellion Against Big Tech by Brian Merchant

"World Economic Forum" Davos, Ada Lovelace, algorithmic management, Amazon Mechanical Turk, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, basic income, Bernie Sanders, Big Tech, big-box store, Black Lives Matter, Cambridge Analytica, Charles Babbage, ChatGPT, collective bargaining, colonial rule, commoditize, company town, computer age, computer vision, coronavirus, cotton gin, COVID-19, cryptocurrency, DALL-E, decarbonisation, deskilling, digital rights, Donald Trump, Edward Jenner, Elon Musk, Erik Brynjolfsson, factory automation, flying shuttle, Frederick Winslow Taylor, fulfillment center, full employment, future of work, George Floyd, gig economy, gigafactory, hiring and firing, hockey-stick growth, independent contractor, industrial robot, information asymmetry, Internet Archive, invisible hand, Isaac Newton, James Hargreaves, James Watt: steam engine, Jeff Bezos, Jessica Bruder, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Roose, Kickstarter, Lyft, Mark Zuckerberg, Marshall McLuhan, means of production, military-industrial complex, move fast and break things, Naomi Klein, New Journalism, On the Economy of Machinery and Manufactures, OpenAI, precariat, profit motive, ride hailing / ride sharing, Sam Bankman-Fried, scientific management, Second Machine Age, self-driving car, sharing economy, Silicon Valley, sovereign wealth fund, spinning jenny, Steve Jobs, Steve Wozniak, super pumped, TaskRabbit, tech billionaire, tech bro, tech worker, techlash, technological determinism, Ted Kaczynski, The Future of Employment, The Wealth of Nations by Adam Smith, Thomas Malthus, Travis Kalanick, Uber and Lyft, uber lyft, union organizing, universal basic income, W. E. B. Du Bois, warehouse automation, warehouse robotics, working poor, workplace surveillance

“I hope Tammy didn’t fall asleep” I have attended a number of protests and strike actions with gig workers in Los Angeles and San Francisco and spoken with numerous workers and organizers about the growing movement. I joined the Gig Workers Rising on a Zoom call on Election Night 2020 as the results for Prop 22 came in. 2. But the reason pay was so high In one particularly striking example, Uber raised $3.5 billion from Saudi Arabia’s Sovereign Wealth Fund in 2016. 3. Yet the drivers who make it all possible Because Uber and Lyft do not make their earnings or payment data publicly available, it is hard to confirm figures, but a number of studies analyzing driver earnings in the wild have been carried out. Here’s a reputable one: James A. Parrott and Michael Reich, “A Minimum Compensation Standard for Seattle TNC Drivers,” Report for the City of Seattle, July 2020, carried out in part by UC Berkeley’s Center on Wage and Employment Dynamics.


pages: 597 words: 172,130

The Alchemists: Three Central Bankers and a World on Fire by Neil Irwin

"World Economic Forum" Davos, Alan Greenspan, Ayatollah Khomeini, bank run, banking crisis, Bear Stearns, Berlin Wall, Bernie Sanders, break the buck, Bretton Woods, business climate, business cycle, capital controls, central bank independence, centre right, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, currency peg, eurozone crisis, financial engineering, financial innovation, Flash crash, foreign exchange controls, George Akerlof, German hyperinflation, Google Earth, hiring and firing, inflation targeting, Isaac Newton, Julian Assange, low cost airline, low interest rates, market bubble, market design, middle-income trap, Money creation, money market fund, moral hazard, mortgage debt, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, Paul Samuelson, price stability, public intellectual, quantitative easing, rent control, reserve currency, Robert Shiller, Robert Solow, rolodex, Ronald Reagan, Savings and loan crisis, savings glut, Socratic dialogue, sovereign wealth fund, The Great Moderation, too big to fail, union organizing, WikiLeaks, yield curve, Yom Kippur War

The day of the Mansion House speech, Britain could borrow money on global markets for a decade for less than 4 percent. But to King, the nation’s finances were more precarious than the bond market made it appear. The market for U.S. Treasury bonds is the largest and most liquid in the world; a pension fund or sovereign wealth fund from the developing world can always buy or sell Treasury bills, even on a massive scale. That has allowed the U.S. government to borrow more money for longer periods than might seem justifiable based on its finances. (In the summer of 2009, U.S. government debt was 90 percent of GDP.) Japanese bonds, meanwhile, are bought primarily by the nation’s own citizens as a savings vehicle, almost as a patriotic duty.


pages: 584 words: 187,436

More Money Than God: Hedge Funds and the Making of a New Elite by Sebastian Mallaby

Alan Greenspan, Andrei Shleifer, Asian financial crisis, asset-backed security, automated trading system, bank run, barriers to entry, Bear Stearns, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, book value, Bretton Woods, business cycle, buy and hold, capital controls, Carmen Reinhart, collapse of Lehman Brothers, collateralized debt obligation, computerized trading, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, currency peg, deal flow, do well by doing good, Elliott wave, Eugene Fama: efficient market hypothesis, failed state, Fall of the Berlin Wall, financial deregulation, financial engineering, financial innovation, financial intermediation, fixed income, full employment, German hyperinflation, High speed trading, index fund, Jim Simons, John Bogle, John Meriwether, junk bonds, Kenneth Rogoff, Kickstarter, Long Term Capital Management, low interest rates, machine translation, margin call, market bubble, market clearing, market fundamentalism, Market Wizards by Jack D. Schwager, Mary Meeker, merger arbitrage, Michael Milken, money market fund, moral hazard, Myron Scholes, natural language processing, Network effects, new economy, Nikolai Kondratiev, operational security, pattern recognition, Paul Samuelson, pre–internet, proprietary trading, public intellectual, quantitative hedge fund, quantitative trading / quantitative finance, random walk, Renaissance Technologies, Richard Thaler, risk-adjusted returns, risk/return, Robert Mercer, rolodex, Savings and loan crisis, Sharpe ratio, short selling, short squeeze, Silicon Valley, South Sea Bubble, sovereign wealth fund, statistical arbitrage, statistical model, survivorship bias, tail risk, technology bubble, The Great Moderation, The Myth of the Rational Market, the new new thing, too big to fail, transaction costs, two and twenty, uptick rule

So you need to understand when your model is working and when it isn’t. For example, sometimes current account deficits have a strong bearing on exchange rates. But other times people are quite willing to tolerate very large current account deficits because of some new preoccupation that is not in your model. Sovereign wealth funds may have emerged. Or the Asians have more capital. Or something else is going on that you may not be capturing.” Mahmood Pradhan, interview with the author, April 29, 2008. 18. Mark Dalton, interview with the author, September 29, 2008. Dalton is the president of Tudor. 19. Eric Wepsic of D.


pages: 603 words: 182,781

Aerotropolis by John D. Kasarda, Greg Lindsay

3D printing, air freight, airline deregulation, airport security, Akira Okazaki, Alvin Toffler, An Inconvenient Truth, Asian financial crisis, back-to-the-land, barriers to entry, Bear Stearns, Berlin Wall, big-box store, blood diamond, Boeing 747, book value, borderless world, Boris Johnson, British Empire, business cycle, call centre, carbon footprint, Cesare Marchetti: Marchetti’s constant, Charles Lindbergh, Clayton Christensen, clean tech, cognitive dissonance, commoditize, company town, conceptual framework, credit crunch, David Brooks, David Ricardo: comparative advantage, Deng Xiaoping, deskilling, digital map, disruptive innovation, Dr. Strangelove, Dutch auction, Easter island, edge city, Edward Glaeser, Eyjafjallajökull, failed state, financial engineering, flag carrier, flying shuttle, food miles, Ford Model T, Ford paid five dollars a day, Frank Gehry, fudge factor, fulfillment center, full employment, future of work, Future Shock, General Motors Futurama, gentleman farmer, gentrification, Geoffrey West, Santa Fe Institute, George Gilder, global supply chain, global village, gravity well, Great Leap Forward, Haber-Bosch Process, Hernando de Soto, high-speed rail, hive mind, if you build it, they will come, illegal immigration, inflight wifi, intangible asset, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), intermodal, invention of the telephone, inventory management, invisible hand, Jane Jacobs, Jeff Bezos, Jevons paradox, Joan Didion, Kangaroo Route, Kickstarter, Kiva Systems, knowledge worker, kremlinology, land bank, Lewis Mumford, low cost airline, Marchetti’s constant, Marshall McLuhan, Masdar, mass immigration, McMansion, megacity, megaproject, Menlo Park, microcredit, military-industrial complex, Network effects, New Economic Geography, new economy, New Urbanism, oil shale / tar sands, oil shock, One Laptop per Child (OLPC), peak oil, Pearl River Delta, Peter Calthorpe, Peter Thiel, pets.com, pink-collar, planned obsolescence, pre–internet, RFID, Richard Florida, Ronald Coase, Ronald Reagan, Rubik’s Cube, savings glut, Seaside, Florida, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, SimCity, Skype, smart cities, smart grid, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, spinning jenny, starchitect, stem cell, Steve Jobs, Suez canal 1869, sunk-cost fallacy, supply-chain management, sustainable-tourism, tech worker, telepresence, the built environment, The Chicago School, The Death and Life of Great American Cities, the long tail, The Nature of the Firm, thinkpad, Thomas L Friedman, Thomas Malthus, Tony Hsieh, trade route, transcontinental railway, transit-oriented development, traveling salesman, trickle-down economics, upwardly mobile, urban planning, urban renewal, urban sprawl, vertical integration, Virgin Galactic, walkable city, warehouse robotics, white flight, white picket fence, Yogi Berra, zero-sum game

Billions found their way into real estate—land prices in China doubled that year, rising 200 percent in Shanghai and 400 percent in Guangzhou. “Both China and America are addressing bubbles by creating more bubbles and we’re just taking advantage of that,” explained the chairman of the People’s Republic’s $300 billion sovereign wealth fund. “So we can’t lose.” But the vast majority was spent on yet another upgrade to the world’s factory: more steel mills than the EU, Japan, the United States, and Russia combined, built with more cement than the rest of the planet combined. At this moment, China is spending a higher percentage of its GDP on infrastructure—planes, trains, and power plants—than any nation in history, close to half of its total output.


pages: 782 words: 187,875

Big Debt Crises by Ray Dalio

Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Bear Stearns, Ben Bernanke: helicopter money, break the buck, Bretton Woods, British Empire, business cycle, buy the rumour, sell the news, capital controls, central bank independence, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, declining real wages, equity risk premium, European colonialism, fiat currency, financial engineering, financial innovation, foreign exchange controls, German hyperinflation, global macro, housing crisis, implied volatility, intangible asset, it's over 9,000, junk bonds, Kickstarter, land bank, large denomination, low interest rates, manufacturing employment, margin call, market bubble, market fundamentalism, military-industrial complex, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Northern Rock, Ponzi scheme, price stability, private sector deleveraging, purchasing power parity, pushing on a string, quantitative easing, refrigerator car, reserve currency, risk free rate, Savings and loan crisis, short selling, short squeeze, sovereign wealth fund, subprime mortgage crisis, too big to fail, transaction costs, universal basic income, uptick rule, value at risk, yield curve

This high market value of leverage (assets divided by market cap) implies that on the margin, ever smaller declines in the value of their assets will wipe out ever larger chunks of equity value, the classic over-leveraged death spiral. Bigger losses lie ahead and the banking industry does not have enough healthy entities to absorb the dying ones. And, the sovereign wealth funds have lost their appetite for large doses of bank equity. The inadequacy of bank capital combined with the coming need to liquidate ever-larger portfolios of bank assets will further constrain credit growth in the economy. In the meantime, market prices are acting as a restrictive force against growth at the same time that the financial sector is collapsing.”


pages: 498 words: 184,761

The Riders Come Out at Night: Brutality, Corruption, and Cover-Up in Oakland by Ali Winston, Darwin Bondgraham

affirmative action, anti-communist, Bay Area Rapid Transit, Bear Stearns, Black Lives Matter, Broken windows theory, Chelsea Manning, cognitive dissonance, collective bargaining, COVID-19, crack epidemic, defund the police, deindustrialization, desegregation, Donald Trump, Edward Snowden, Ferguson, Missouri, friendly fire, full employment, gentrification, George Floyd, global pandemic, Golden Gate Park, mass incarceration, Nelson Mandela, Occupy movement, Oklahoma City bombing, old-boy network, Port of Oakland, power law, Ronald Reagan, San Francisco homelessness, Silicon Valley, sovereign wealth fund, transcontinental railway, urban renewal, W. E. B. Du Bois, War on Poverty, white flight, WikiLeaks, Yogi Berra

Half of these loans, accounting for tens of thousands of properties, were foreclosed.37 Like much of California, Oakland was a hunting ground in the early and mid-2000s for lenders and banks selling subprime loans that would be sliced, diced, and repackaged as mortgage-backed securities, bought by investors the world over, from sovereign wealth funds to philanthropic foundations, all seeking eye-popping profits. The city’s Black and Latino homeowners were targeted with some of the most volatile and cynically structured adjustable-rate mortgages, home equity lines of credit, and other byzantine financial products. Homegrown companies like Golden West Financial and World Savings Bank started in Oakland in the 1960s as a conservative savings and loan and metastasized into a subprime lending giant.


pages: 701 words: 199,010

The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal by Ludwig B. Chincarini

affirmative action, Alan Greenspan, asset-backed security, automated trading system, bank run, banking crisis, Basel III, Bear Stearns, Bernie Madoff, Black-Scholes formula, Bob Litterman, business cycle, buttonwood tree, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, collective bargaining, corporate governance, correlation coefficient, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, delta neutral, discounted cash flows, diversification, diversified portfolio, family office, financial engineering, financial innovation, financial intermediation, fixed income, Flash crash, full employment, Gini coefficient, Glass-Steagall Act, global macro, high net worth, hindsight bias, housing crisis, implied volatility, income inequality, interest rate derivative, interest rate swap, John Meriwether, Kickstarter, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, low interest rates, low skilled workers, managed futures, margin call, market design, market fundamentalism, merger arbitrage, Mexican peso crisis / tequila crisis, Mitch Kapor, money market fund, moral hazard, mortgage debt, Myron Scholes, National best bid and offer, negative equity, Northern Rock, Occupy movement, oil shock, price stability, proprietary trading, quantitative easing, quantitative hedge fund, quantitative trading / quantitative finance, Ralph Waldo Emerson, regulatory arbitrage, Renaissance Technologies, risk free rate, risk tolerance, risk-adjusted returns, Robert Shiller, Ronald Reagan, Sam Peltzman, Savings and loan crisis, Sharpe ratio, short selling, sovereign wealth fund, speech recognition, statistical arbitrage, statistical model, survivorship bias, systematic trading, tail risk, The Great Moderation, too big to fail, transaction costs, value at risk, yield curve, zero-coupon bond

Buffett is a famously acute investor, but even he probably didn’t learn much that was new from Lehman’s financial statements. His decision not to invest was based in part on fear. The real estate market was crumbling and Buffett didn’t want an unknown real estate exposure, even as part of an otherwise good deal.27 On March 15, 2008, the sovereign wealth fund ICD approached Lehman about buying equity. Lehman wasn’t interested in raising equity capital at that time. ICD responded that, if and when Lehman considered raising capital, ICD should be Lehman’s “first call in the Middle East.”28 In March 2008, Fuld appointed McDade “balance sheet czar” and instructed him to sell assets and take other actions to reduce the size of Lehman’s balance sheet.


pages: 823 words: 206,070

The Making of Global Capitalism by Leo Panitch, Sam Gindin

accounting loophole / creative accounting, active measures, airline deregulation, Alan Greenspan, anti-communist, Asian financial crisis, asset-backed security, bank run, banking crisis, barriers to entry, Basel III, Bear Stearns, Big bang: deregulation of the City of London, bilateral investment treaty, book value, Branko Milanovic, Bretton Woods, BRICs, British Empire, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, Carmen Reinhart, central bank independence, classic study, collective bargaining, continuous integration, corporate governance, creative destruction, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, dark matter, democratizing finance, Deng Xiaoping, disintermediation, ending welfare as we know it, eurozone crisis, facts on the ground, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, floating exchange rates, foreign exchange controls, full employment, Gini coefficient, Glass-Steagall Act, global value chain, guest worker program, Hyman Minsky, imperial preference, income inequality, inflation targeting, interchangeable parts, interest rate swap, Kenneth Rogoff, Kickstarter, land reform, late capitalism, liberal capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, market fundamentalism, Martin Wolf, means of production, military-industrial complex, money market fund, money: store of value / unit of account / medium of exchange, Monroe Doctrine, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, new economy, Nixon triggered the end of the Bretton Woods system, non-tariff barriers, Northern Rock, oil shock, precariat, price stability, proprietary trading, quantitative easing, Ralph Nader, RAND corporation, regulatory arbitrage, reserve currency, risk tolerance, Ronald Reagan, Savings and loan crisis, scientific management, seigniorage, shareholder value, short selling, Silicon Valley, sovereign wealth fund, special drawing rights, special economic zone, stock buybacks, structural adjustment programs, subprime mortgage crisis, Tax Reform Act of 1986, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, vertical integration, very high income, Washington Consensus, We are all Keynesians now, Works Progress Administration, zero-coupon bond, zero-sum game

As they had done a decade earlier during the Long Term Capital Management (LTCM) crisis, Treasury officials convened the CEOs of the nation’s ten largest commercial banks in September 2007, with the goal of determining whether there were “market-based solutions that could help reduce the possibility of a disorderly solution in the marketplace.”37 Sovereign wealth funds of other countries were also encouraged to invest directly in Wall Street banks to beef up their capital. Both the Treasury and Federal Reserve staff also continued to work through the President’s Working Group on Financial Markets (established after the stock market crash of 1987) to coordinate their firefighting activities with the Securities Exchange Commission and the Commodity Futures Trading Commission.38 At the beginning of 2008 insurers of US municipal bonds were in deep trouble, and stock markets in Asia and Europe were shaken at the prospect of a serious American recession.39 The Fed made a large emergency cut in interest rates, and soon followed this by supplying other central banks with even more dollars.40 By March, just as the Treasury was about to issue a “Blueprint for a Modernized Financial Regulatory Structure” designed to enhance the Fed’s regulatory authority over the whole financial system, two Bear Stearns hedge funds went bust.


pages: 772 words: 203,182

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right by George R. Tyler

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 8-hour work day, active measures, activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, benefit corporation, Black Swan, blood diamond, blue-collar work, Bolshevik threat, bonus culture, British Empire, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, carried interest, cognitive dissonance, collateralized debt obligation, collective bargaining, commoditize, company town, compensation consultant, corporate governance, corporate personhood, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, crowdsourcing, currency manipulation / currency intervention, David Brooks, David Graeber, David Ricardo: comparative advantage, declining real wages, deindustrialization, Diane Coyle, disruptive innovation, Double Irish / Dutch Sandwich, eurozone crisis, financial deregulation, financial engineering, financial innovation, fixed income, Ford Model T, Francis Fukuyama: the end of history, full employment, George Akerlof, George Gilder, Gini coefficient, Glass-Steagall Act, Gordon Gekko, Greenspan put, hiring and firing, Ida Tarbell, income inequality, independent contractor, invisible hand, job satisfaction, John Markoff, joint-stock company, Joseph Schumpeter, junk bonds, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, lake wobegon effect, light touch regulation, Long Term Capital Management, low interest rates, manufacturing employment, market clearing, market fundamentalism, Martin Wolf, minimum wage unemployment, mittelstand, Money creation, moral hazard, Myron Scholes, Naomi Klein, Northern Rock, obamacare, offshore financial centre, Paul Samuelson, Paul Volcker talking about ATMs, pension reform, performance metric, Pershing Square Capital Management, pirate software, plutocrats, Ponzi scheme, precariat, price stability, profit maximization, profit motive, prosperity theology / prosperity gospel / gospel of success, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, reshoring, Richard Thaler, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, rolling blackouts, Ronald Reagan, Sand Hill Road, Savings and loan crisis, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Ballmer, Steve Jobs, stock buybacks, subprime mortgage crisis, The Chicago School, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transcontinental railway, transfer pricing, trickle-down economics, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, Upton Sinclair, upwardly mobile, women in the workforce, working poor, zero-sum game

That has created dangerous new dynamics challenging Australian voters because, as Garnaut explains, “Special interests have powerful incentives to obscure the real effects of various interventions…. The special interests are favored by ignorance and the fog of politics.”28 The ability of mining interests, in particular, to derail inspired efforts to mimic Norway’s sovereign wealth fund highlights the need to end pay-to-play in Australia. Here is a frank assessment of that nation’s contemporary political environment by Sydney Morning Herald reporter Tim Colbatch, writing in mid-2012: “Conservative leader Tony Abbott’s war against everything has made good government in Australia almost impossible….


pages: 716 words: 192,143

The Enlightened Capitalists by James O'Toole

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, Abraham Maslow, activist fund / activist shareholder / activist investor, anti-communist, Ayatollah Khomeini, benefit corporation, Bernie Madoff, Bletchley Park, book value, British Empire, business cycle, business logic, business process, California gold rush, carbon footprint, City Beautiful movement, collective bargaining, company town, compensation consultant, Cornelius Vanderbilt, corporate governance, corporate social responsibility, Credit Default Swap, crowdsourcing, cryptocurrency, desegregation, do well by doing good, Donald Trump, double entry bookkeeping, end world poverty, equal pay for equal work, Frederick Winslow Taylor, full employment, garden city movement, germ theory of disease, glass ceiling, God and Mammon, greed is good, high-speed rail, hiring and firing, income inequality, indoor plumbing, inventory management, invisible hand, James Hargreaves, job satisfaction, joint-stock company, Kickstarter, knowledge worker, Lao Tzu, Larry Ellison, longitudinal study, Louis Pasteur, Lyft, Marc Benioff, means of production, Menlo Park, North Sea oil, passive investing, Ponzi scheme, profit maximization, profit motive, Ralph Waldo Emerson, rolodex, Ronald Reagan, Salesforce, scientific management, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, Socratic dialogue, sovereign wealth fund, spinning jenny, Steve Jobs, Steve Wozniak, stock buybacks, stocks for the long run, stocks for the long term, The Fortune at the Bottom of the Pyramid, The Wealth of Nations by Adam Smith, Tim Cook: Apple, traveling salesman, Uber and Lyft, uber lyft, union organizing, Vanguard fund, white flight, women in the workforce, young professional

Rather shockingly, investors show far greater concern about the cost of providing low-level employees with health insurance than they do when executives treat themselves to such expensive perks as country club memberships, private jets, and opera boxes. A few recent exceptions to this rule include the State Street Global Advisors, a Boston-based $2.8 trillion assets management firm, and Norway’s sovereign wealth fund, both of which announced in 2018 that they planned to vote against excessive proposed pay increases in a few companies in which they are major investors. And in 2018, 52 percent of Disney shareholders voted to nix a $100 million bonus the company’s board had voted to pay the CEO because, reportedly, he wasn’t happy having to show up at the office.


pages: 825 words: 228,141

MONEY Master the Game: 7 Simple Steps to Financial Freedom by Tony Robbins

"World Economic Forum" Davos, 3D printing, active measures, activist fund / activist shareholder / activist investor, addicted to oil, affirmative action, Affordable Care Act / Obamacare, Albert Einstein, asset allocation, backtesting, Bear Stearns, behavioural economics, bitcoin, Black Monday: stock market crash in 1987, buy and hold, Carl Icahn, clean water, cloud computing, corporate governance, corporate raider, correlation does not imply causation, Credit Default Swap, currency risk, Dean Kamen, declining real wages, diversification, diversified portfolio, Donald Trump, estate planning, fear of failure, fiat currency, financial independence, fixed income, forensic accounting, high net worth, index fund, Internet of things, invention of the wheel, it is difficult to get a man to understand something, when his salary depends on his not understanding it, Jeff Bezos, John Bogle, junk bonds, Kenneth Rogoff, lake wobegon effect, Lao Tzu, London Interbank Offered Rate, low interest rates, Marc Benioff, market bubble, Michael Milken, money market fund, mortgage debt, Neil Armstrong, new economy, obamacare, offshore financial centre, oil shock, optical character recognition, Own Your Own Home, passive investing, profit motive, Ralph Waldo Emerson, random walk, Ray Kurzweil, Richard Thaler, risk free rate, risk tolerance, riskless arbitrage, Robert Shiller, Salesforce, San Francisco homelessness, self-driving car, shareholder value, Silicon Valley, Skype, Snapchat, sovereign wealth fund, stem cell, Steve Jobs, subscription business, survivorship bias, tail risk, TED Talk, telerobotics, The 4% rule, The future is already here, the rule of 72, thinkpad, tontine, transaction costs, Upton Sinclair, Vanguard fund, World Values Survey, X Prize, Yogi Berra, young professional, zero-sum game

Although the average investor has never heard of Ray, his name echoes in the halls of the highest places. His observations, a daily report, are read by the most powerful figures in finance, from the heads of central banks to those in foreign governments, and even the president of the United States. There is a reason why the world’s biggest players, from the largest pension funds to the sovereign wealth funds of foreign countries, invest with Ray. And here is a clue: it’s not “conventional wisdom.” He thinks way outside the box. Heck, he shatters the box. And his voracious appetite to continually learn and challenge the conventional and find “the truth” is what propelled Ray from his first office (his apartment) to a sprawling campus in Connecticut.


pages: 1,034 words: 241,773

Enlightenment Now: The Case for Reason, Science, Humanism, and Progress by Steven Pinker

3D printing, Abraham Maslow, access to a mobile phone, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Albert Einstein, Alfred Russel Wallace, Alignment Problem, An Inconvenient Truth, anti-communist, Anton Chekhov, Arthur Eddington, artificial general intelligence, availability heuristic, Ayatollah Khomeini, basic income, Berlin Wall, Bernie Sanders, biodiversity loss, Black Swan, Bonfire of the Vanities, Brexit referendum, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, Charlie Hebdo massacre, classic study, clean water, clockwork universe, cognitive bias, cognitive dissonance, Columbine, conceptual framework, confounding variable, correlation does not imply causation, creative destruction, CRISPR, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, dark matter, data science, decarbonisation, degrowth, deindustrialization, dematerialisation, demographic transition, Deng Xiaoping, distributed generation, diversified portfolio, Donald Trump, Doomsday Clock, double helix, Eddington experiment, Edward Jenner, effective altruism, Elon Musk, en.wikipedia.org, end world poverty, endogenous growth, energy transition, European colonialism, experimental subject, Exxon Valdez, facts on the ground, fake news, Fall of the Berlin Wall, first-past-the-post, Flynn Effect, food miles, Francis Fukuyama: the end of history, frictionless, frictionless market, Garrett Hardin, germ theory of disease, Gini coefficient, Great Leap Forward, Hacker Conference 1984, Hans Rosling, hedonic treadmill, helicopter parent, Herbert Marcuse, Herman Kahn, Hobbesian trap, humanitarian revolution, Ignaz Semmelweis: hand washing, income inequality, income per capita, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), invention of writing, Jaron Lanier, Joan Didion, job automation, Johannes Kepler, John Snow's cholera map, Kevin Kelly, Khan Academy, knowledge economy, l'esprit de l'escalier, Laplace demon, launch on warning, life extension, long peace, longitudinal study, Louis Pasteur, Mahbub ul Haq, Martin Wolf, mass incarceration, meta-analysis, Michael Shellenberger, microaggression, Mikhail Gorbachev, minimum wage unemployment, moral hazard, mutually assured destruction, Naomi Klein, Nate Silver, Nathan Meyer Rothschild: antibiotics, negative emissions, Nelson Mandela, New Journalism, Norman Mailer, nuclear taboo, nuclear winter, obamacare, ocean acidification, Oklahoma City bombing, open economy, opioid epidemic / opioid crisis, paperclip maximiser, Paris climate accords, Paul Graham, peak oil, Peter Singer: altruism, Peter Thiel, post-truth, power law, precautionary principle, precision agriculture, prediction markets, public intellectual, purchasing power parity, radical life extension, Ralph Nader, randomized controlled trial, Ray Kurzweil, rent control, Republic of Letters, Richard Feynman, road to serfdom, Robert Gordon, Rodney Brooks, rolodex, Ronald Reagan, Rory Sutherland, Saturday Night Live, science of happiness, Scientific racism, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Simon Kuznets, Skype, smart grid, Social Justice Warrior, sovereign wealth fund, sparse data, stem cell, Stephen Hawking, Steve Bannon, Steven Pinker, Stewart Brand, Stuxnet, supervolcano, synthetic biology, tech billionaire, technological determinism, technological singularity, Ted Kaczynski, Ted Nordhaus, TED Talk, The Rise and Fall of American Growth, the scientific method, The Signal and the Noise by Nate Silver, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, total factor productivity, Tragedy of the Commons, union organizing, universal basic income, University of East Anglia, Unsafe at Any Speed, Upton Sinclair, uranium enrichment, urban renewal, W. E. B. Du Bois, War on Poverty, We wanted flying cars, instead we got 140 characters, women in the workforce, working poor, World Values Survey, Y2K

As the circle of sympathy in a country expands to encompass the poor (and as people want to insure themselves should they ever become poor), they increasingly allocate a portion of their pooled resources—that is, government funds—to alleviating that poverty. Those resources have to come from somewhere. They may come from a corporate or sales tax, or a sovereign wealth fund, but in most countries they largely come from a graduated income tax, in which richer citizens pay at a higher rate because they don’t feel the loss as sharply. The net result is “redistribution,” but that is something of a misnomer, because the goal is to raise the bottom, not lower the top, even if in practice the top is lowered.


pages: 903 words: 235,753

The Stack: On Software and Sovereignty by Benjamin H. Bratton

1960s counterculture, 3D printing, 4chan, Ada Lovelace, Adam Curtis, additive manufacturing, airport security, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, algorithmic trading, Amazon Mechanical Turk, Amazon Robotics, Amazon Web Services, Andy Rubin, Anthropocene, augmented reality, autonomous vehicles, basic income, Benevolent Dictator For Life (BDFL), Berlin Wall, bioinformatics, Biosphere 2, bitcoin, blockchain, Buckminster Fuller, Burning Man, call centre, capitalist realism, carbon credits, carbon footprint, carbon tax, carbon-based life, Cass Sunstein, Celebration, Florida, Charles Babbage, charter city, clean water, cloud computing, company town, congestion pricing, connected car, Conway's law, corporate governance, crowdsourcing, cryptocurrency, dark matter, David Graeber, deglobalization, dematerialisation, digital capitalism, digital divide, disintermediation, distributed generation, don't be evil, Douglas Engelbart, Douglas Engelbart, driverless car, Edward Snowden, Elon Musk, en.wikipedia.org, Eratosthenes, Ethereum, ethereum blockchain, Evgeny Morozov, facts on the ground, Flash crash, Frank Gehry, Frederick Winslow Taylor, fulfillment center, functional programming, future of work, Georg Cantor, gig economy, global supply chain, Google Earth, Google Glasses, Guggenheim Bilbao, High speed trading, high-speed rail, Hyperloop, Ian Bogost, illegal immigration, industrial robot, information retrieval, Intergovernmental Panel on Climate Change (IPCC), intermodal, Internet of things, invisible hand, Jacob Appelbaum, James Bridle, Jaron Lanier, Joan Didion, John Markoff, John Perry Barlow, Joi Ito, Jony Ive, Julian Assange, Khan Academy, Kim Stanley Robinson, Kiva Systems, Laura Poitras, liberal capitalism, lifelogging, linked data, lolcat, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Masdar, McMansion, means of production, megacity, megaproject, megastructure, Menlo Park, Minecraft, MITM: man-in-the-middle, Monroe Doctrine, Neal Stephenson, Network effects, new economy, Nick Bostrom, ocean acidification, off-the-grid, offshore financial centre, oil shale / tar sands, Oklahoma City bombing, OSI model, packet switching, PageRank, pattern recognition, peak oil, peer-to-peer, performance metric, personalized medicine, Peter Eisenman, Peter Thiel, phenotype, Philip Mirowski, Pierre-Simon Laplace, place-making, planetary scale, pneumatic tube, post-Fordism, precautionary principle, RAND corporation, recommendation engine, reserve currency, rewilding, RFID, Robert Bork, Sand Hill Road, scientific management, self-driving car, semantic web, sharing economy, Silicon Valley, Silicon Valley ideology, skeuomorphism, Slavoj Žižek, smart cities, smart grid, smart meter, Snow Crash, social graph, software studies, South China Sea, sovereign wealth fund, special economic zone, spectrum auction, Startup school, statistical arbitrage, Steve Jobs, Steven Levy, Stewart Brand, Stuxnet, Superbowl ad, supply-chain management, supply-chain management software, synthetic biology, TaskRabbit, technological determinism, TED Talk, the built environment, The Chicago School, the long tail, the scientific method, Torches of Freedom, transaction costs, Turing complete, Turing machine, Turing test, undersea cable, universal basic income, urban planning, Vernor Vinge, vertical integration, warehouse automation, warehouse robotics, Washington Consensus, web application, Westphalian system, WikiLeaks, working poor, Y Combinator, yottabyte

It takes different forms and seeks different ends: schemes to break up California would mean political autonomy for Silicon Valley and several more Senate seats; Special Economic Zones freeing up markets for commodity assemblage by keeping hands and fingers on call in special factory camps; sovereign wealth funds turning states into corporate actors; Supreme Court rulings turning corporate actors into holders of religious and political speech rights; neo-Confederates once again taking control of one of the major US political parties; Saudi Arabia buying sovereign farmland in Indonesia to secure its food future; the hard geopolitics of ongoing state-sponsored spying, hacking, and mutual recriminations; and so on.


pages: 892 words: 91,000

Valuation: Measuring and Managing the Value of Companies by Tim Koller, McKinsey, Company Inc., Marc Goedhart, David Wessels, Barbara Schwimmer, Franziska Manoury

accelerated depreciation, activist fund / activist shareholder / activist investor, air freight, ASML, barriers to entry, Basel III, Black Monday: stock market crash in 1987, book value, BRICs, business climate, business cycle, business process, capital asset pricing model, capital controls, Chuck Templeton: OpenTable:, cloud computing, commoditize, compound rate of return, conceptual framework, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, currency risk, discounted cash flows, distributed generation, diversified portfolio, Dutch auction, energy security, equity premium, equity risk premium, financial engineering, fixed income, index fund, intangible asset, iterative process, Long Term Capital Management, low interest rates, market bubble, market friction, Myron Scholes, negative equity, new economy, p-value, performance metric, Ponzi scheme, price anchoring, proprietary trading, purchasing power parity, quantitative easing, risk free rate, risk/return, Robert Shiller, Savings and loan crisis, shareholder value, six sigma, sovereign wealth fund, speech recognition, stocks for the long run, survivorship bias, technology bubble, time value of money, too big to fail, transaction costs, transfer pricing, two and twenty, value at risk, yield curve, zero-coupon bond

Finally, with some exceptions, clout with the government rarely provides an advantage, given the arm’s-length government procurement processes more common in these countries. THE BEST-OWNER LIFE CYCLE The definition of best owner isn’t static, and best owners themselves will change over time as a business’s circumstances change. Thus, a business’s best owner could at different times be a larger company, a private-equity firm, a government, a sovereign wealth fund, a family, the business’s customers, its employees, or shareholders whenever a business becomes an independent public company listed on a stock exchange. Furthermore, the parties vying to become best owners are continually evolving in different ways in different parts of the world. In the United States, most large companies are either listed or owned by private-equity funds.


pages: 1,797 words: 390,698

Power at Ground Zero: Politics, Money, and the Remaking of Lower Manhattan by Lynne B. Sagalyn

affirmative action, airport security, Bear Stearns, Bonfire of the Vanities, clean water, conceptual framework, congestion pricing, corporate governance, deindustrialization, Donald Trump, Edward Glaeser, estate planning, financial engineering, Frank Gehry, Guggenheim Bilbao, high net worth, high-speed rail, informal economy, intermodal, iterative process, Jane Jacobs, megaproject, mortgage debt, New Urbanism, place-making, rent control, Rosa Parks, Rubik’s Cube, Silicon Valley, sovereign wealth fund, the built environment, the High Line, time value of money, too big to fail, Torches of Freedom, urban decay, urban planning, urban renewal, value engineering, white flight, young professional

It was an ideal time for the Port Authority to test the appetite of investor interest, even though the 104-story tower, with construction beams just being welded to the building’s base, was years away from completion. In 2007, the Manhattan office market was red hot, flooded with capital from a broad range of investors—private equity firms, pension interests, and sovereign wealth funds—all looking to acquire Manhattan office property, especially trophy buildings. It is “welcome news,” editorialized the Wall Street Journal. “The twin towers were underoccupied and underutilized for at least two decades after their construction. Letting private capital take on the risks of turning a profit” on the tower “would ensure that history does not repeat itself at taxpayer expense.”50 But the PA’s early efforts at bringing in private capital failed to gain traction, and when the financial crisis hit the next year, the opportunity disappeared.