Where you can find me these days

As expected, I have moved to fresher pastures. I have been the Economics Editor at sister publications NordSIP and Ekonamik since the beginning of January 2019 and want to invite you to check out our content.

Both publications are focused on the Nordic region. NordSIP is a sustainable investment platform focused on providing news and analytical insights about ESG integration, impact investing, green bond, sustainable regulation to asset managers and institutional investors.

Ekonamik is a macroeconomics, politics and financial news and analysis platform focused on a similar audience and is much more in the spirit of this website, although with slightly smaller pieces and broader coverage. We report on relevant developments across the globe and in the region and provide insightful analysis about the state of the world, its politics and markets. On a weekly basis, we conduct thematic market coverage focusing on a unique market segment, including equities and fixed income but also emerging and frontier markets, alternative investment opportunities, ETFs and real markets. We also interview asset managers here in the Nordics to provide market-based insights into what is happening and what the forthcoming concerns are.

I want to invite you to come check out our content. I have enjoyed writing it a lot and I think you will find it very interesting.

Should you have any questions or comments or in case you would otherwise like to get in touch, please feel free to email me at filipe@ekonamik.com.

Looking forward to seeing there!

Filipe

A hiatus in publishing and some parting words for now

After many years of naive hope, I have finally come to accept that I am not, for the foreseeable future, going to be able to update this website.

I have been meaning to finalise some thoughts on history, empires, macroeconomics, finance, politics and how all of these fields shed some light onto the future of the EU and the world around it, as well as track how things progress on a regular basis. Unfortunately, I have to admit that there simply is not enough time in the day for me to dedicate to such endeavours at the moment.

When I started blogging about the EU, I was about to turn 24. I had just finished a masters in European Political Economy at the LSE, and struggling to find a job in a London that was still reeling from the financial crisis. Blogging helped me follow and understand current events for the subsequent 9 years. I’ve written intermitently while working in for local government, macroeconomic and fixed income research organisations, academia and online publishing, while doing a masters and then (or actually now) a PhD, while working as a free-lance consultant. I’ve been as a resident of the UK and now of Sweden. I got married and now have a child.

I think there might have been a window of opportunity in 2011/12 where if had been savvy enough to make the right moves I might have been able to make a play for living off this website. However, we can’t all be Mike Duncan or Nouriel Roubini, and if such a moment ever actually existed I clearly did not see it and I obviously did not catch it. Which is ok. Life turned out wonderfully nevertheless and I ended up working for and with other people who taught me a lot more than my own very confident self-satisfaction with the rightgeousness of my isolated foresight would have allowed me to learn.

One thing about blogging is that it is a pretty difficult way to engage with people, particularly the people I’d like to engage with. Mind you, plenty of histerical and paranoid weirdos do rear their ugly heads, but you can’t engage with them. You do it once or twice and then you realise what you are doing and what this conversation would look like if you were having it in real life and you stop. Blogging can be a relatively lonely thing, which is not good if you are trying to figure things out. It’s easy to inflate your own epiphanies if you have no one to bounce these sort of ideas against who would otherwise put a big fat finger onto your logical blindspots. And not for nothing but there are not that many people who have the interest, bordering on the obsession, to discuss these things to the level of degree that would be satisfying to someone willing to spend a week researching them and 4 days writing a post about them.

Inevitably, posting was never as regular as I wanted it to be and was largely a result of how busy I was. The more paid work I had, the less time I was able to dedicate to this website. Moreover, the less I studied, the fewer interesting explanations I came across to explain seemingly unusual or complex events in the real world. However, until the end of 2015, I’d been able to find the time and the interest to post something about what’s going on in the world. That all ended in 2016 with the birth of my son.

This might come as a surprise to no one else but myself, but it turns out that having a child takes a lot of time. And not just for a while. It’s basically a commitment for life. And while people keep on telling me that it’s going to take less time as he grows up a becomes more independent that change never seems to happen. What changes is how he needs attention, not how much of it he needs. Parenting, if you want to/can be engaged, takes time. Days start earlier and end sooner than before. When he’s awake and not in kindergarten, he’s all that I need to do. You sleep less, which makes you tired  and slower, both physically and intellectually.  And all throughout, I still have my job(s) and my PhD to do. But all of that is ok. That’s great, actually! I’m thoroughly enjoying parenting and I can’t imagine a better place to do it than Sweden. It’s wonderful! Most importantly, I want to do it as well as I can and that means I need to prioritise it over (most) other things.

So, I need a job to pay the bills. I want to finish my PhD. I want to spend time with my wife and I want to take care of my son. I need to cook (sometimes), eat and sleep. Unfortunately, based solely on the small list of things in this paragraph, I’m already well over the 24 hours that it takes our planet to rotate on its axis. So I have to take a hiatus from publishing on this and any other websites, because, well, priorities!

It has taken me almost 3 years to realise this. These 3 years have been marked by events I wanted to discuss here, like Brexit (which I started and never finished writing about), the elections in the USA, polling, Macron, the rise of populism as supported by income inequality and special interest lobbying, Russia’s projection of power, China’s silk road initiatives, the Portuguese economic recovery, the Swedish economy, the upcoming Swedish election, Swedish political dynamics, the migrant crisis, the Middle east and the EU’s role within it, bond markets, economic red-flags and political red-herrings, American exceptionalism and the cycle and collapse of empires. But I haven’t had the time. And I’m not going to have the time for it anytime soon either. So I have to accept that I won’t be able to write about any of this in a meaningful way anytime soon. Sure, I keep on hoping I will at some point. The end of my PhD certainly provides a light at the end of the tunnel. But for now, it is a distant light; about a 2-year march away. This hit me today as I noticed that a draft post on dismissed hypothesis about the collapse of the Roman Empire had become one of the most viewed posts on this website, even though it was incomplete and was at best in the early stages of its writing. It was sort of a wake up call for me and I realised I had to accept that I am no longer able to keep up with things. Thus the decision to take a break.

 

My concerns about the future

Before I go, I do want to leave you and myself with some thoughts; not so much of in depth analysis but rather of selectively recorded list of concerns that I can come back to in 2 years to check whether I had any useful foresight at all:

1. I’m really concerned about the rise of unilateralism. This is literally the rise of people who do whatever regardless of what the consequences might be for their neighbours. These are overconfident learders at the edges of the political spectrum, with no experience. To use the chess analogy, it’s not just that they aren’t thinking of the game 5 moves ahead. They’re still bothered by the game three moves ago and trying to ract to that. They are literally spitting into the air and will soon be surprised when it falls back on their face.
2. Inevitably, the above issue also makes me concerned about the future of Europe, the multilateral arrangement par excellence. I’m plagued with the questions like “What do we do about extreme rightwing parties?”, “What do we do about Russian interference?” and “How do we deal with shocks we are not prepared for?” – so far all I’ve come up with is “Be better at arguing, train and prepare better”, “Be proactive at monitoring them and us” and “adapt”, which are not the most satisfying of answers.
3. Nationalist authoritarianism, of course, concerns me too. It is the domestic counterpart of unilateralism. An overconfident belief in and exercise of one’s authority based on group think, social alienation and lack of tolerance for change, the political embodiment of our species’ fear of entropy and its axieties about evolution. It’s really worked out well in the past for Europe, so I can see why Hungary, the Czech Republic and Poland would want to have a go at it again…
4. I’m also worried about the global economy. As long as China continues to run a current account surplus, it can basically absorb any financial shock that comes around. But everytime that Trump lies, humiliates, gambles and erodes domestic and foreign interlocutors, confidence in the US economy is eroded and the world comes a step closer to the end of the US dollar’s supremacy. When the confidence that supports the entire global economy is exhausted, the world will go through a paradigm shift not seen since the 1940s. Again, I don’t think we’ll be there in 2 years, but I suspect we will certainly be closer.
5. The Euro-zone economy is not in great shape either despite what you may have heard. Sure we are back to growing, but I think that that’s more thanks to reversion to the mean and ECB asset purchases than national policies. To be frank, I don’t really think that the underlying issues of institutional moral hazard and adverse selection that caused the financial crisis to trigger the EZ sovereign have necessarily been addressed. Sure, Eurostat has better means to monitor the quality of statistics being submitted to it by national statistical bureaus, but the issue is not just hidden actions, as much as undesirable preferences. Sure, real estate markets have been reformed, towards more liberalisation in some places and less in others. But real estate and tourism is not all that an economy runs on. More importantly, we are still collectively ignoring the connections between Mundell and Rodrik’s trilemas (again something I wanted to have explored more but only looked at superficially).
6. Finally, I find the rise of violence around the world, particularly around the western world, to be extremely concerning. Contrarily to what I would have thought, it turns out that if our leaders speak in alienated or violent terms about segments of the population, people with nothing else to do will escalate it in order to make themselves feel better. As long as the world continues on this path I can only see the incidence of hate crimes increasing.

To conclude, I’m not necessarily optimistic about the next 2 years, during which I expect to be too busy to post. I don’t expect anything dramatic to happen. I do however fear that things will progressively get worst.

• My impression is that Trump’s agenda is one of isolationism in order to facilitate tax breaks. As the EU is unable to fill the power vacuum he’s leaving behind, I’m not so sure I’m very confortable with the alternatives.
• We are going to continue to play with populist nationalism for a while. Everyone I speak with keeps on saying that that’s fine. They say the best way to deal with these people is to put them front and centre so everyone can see how stupid they are. Unfortunately, that did not necessarily solve the problem in Belgium, Hungary or Poland. You still need someone better to replace them. We need more Macrons and I’m not sure that there’s that much of an abundance of brilliantly-educated, well-spoken, charismatic, liberal, rich debaters without a past out there waiting to do the job.

 

Anyway, that’s it from me. Thank you for your visits and I hope you continue to enjoy the content of this website. Despite all of the above, I have absolutely no intention to delete this blog and all of its associated materials.

I hope to see you soon. Farewell for now.

Kind regards,

Filipe

On Brexit – My takeaways (Part 1)

This post pretty much allows me to vent my frustration on this tragicomic epispode of British politics. The discussion in this post is divided into 5 very short sections:

• What I think will happen after the referendum
• About that Campaign and the Leave – Leavers, Trump, Opportunists, the status Quo and the Establishment
• Is Cameron’s job at risk? – It should be
• The possible need for an early general election
• Conclusion – Don’t call referenda

Who in the UK wants to leave the EU

There are 4 groups of people that I can identify as supporting Brexit. The first group, which I would argue makes the most part, is made up of normal people who are fed up with the status quo. Nationally,  Brexit is predominant an English demand, not a Scottish, Irish or Welsh demand. The next two groups are separated by social status and income (what the Brits so self-flagellatingly refer to as “class”). The third group is described in occupational/professional terms.

This post is divided in 4 sections:

• A general look at the voter intentions
• The misinformed and frustrated with the status Quo
• Across the Regions of the UK
• Income Groups

Brexit: Opinions of its effects from Leavers and Remain

As the title of this post would suggest, I’m solely interested in listing and summarising the views of the different sides of the public debate. This post is divided in 5 sections:

• What Remain says will happen if there’s a Brexit
• What Leave thinks about all these views
• The View from those who foresaw the Financial Crisis of 2007/8
• What Leave says will happen if there’s a Brexit
• What Leave says will happen if there’s no Brexit

4 Upcoming Posts on Brexit: The Referendum Day Review

It has been a long time since I posted on this blog. Despite my best wishes, I keep getting busy with real work, so my quarterly, monthly and weekly post best hopes have all been in vain. Hopefully there’s still the topical opportunity to write about interesting events. The British Referendum taking place today is one such event.

Unsurprisingly, I am in favour of the UK staying in the EU as you’d know if you had the misfortune of having me as your friend on Facebook, where I would have bombarded you with posts about the campaign during the last weeks. But if you’ve had a look around this website, you might have come across a complain or two about Cameron or someone else from the British establishment saying something I found astonishingly dumb. The fact that I am now on the same argument as Cameron leaves me somewhat confused. I don’t know whether to be happy that he’s gone to the Remain side or whether to be irritated that it took him so long and in that in the process he made so much damage.Anyway, I’ve been thinking about what I want to write because I can’t spend a lot of time on this, so I’ve decided I want to write 4 posts:

• Brexit: Opinions of its effects from Leavers and Remainers
• Who in the UK wants to leave the EU
• Hedge Funds and Brexit – or how to profit from bad political ideas
• On Brexit – My takeaways

The Origins Goths: Migration, Diffusion and Gothic Banality

In a previous post, I spent some time discussing the fall of the Roman Empire. Although, it is inevitable to mention the Goths in such a discussion, the complexity of the issue is such that even the most superficial discussion would be distracting. To avoid that problem, and serve as a reference to myself, and possibly others, this post offers a very brief discussion of the facts I was able to gather them.

The post is part of a 2-part series on the Goths. The first part, contained in this post, is a discussion of the origin of the Goths. There are two main theories about the origins of the Goths: the migration theory and the diffusion theory. The main difference between the two is about how the process of social, economic and political development and increased complexity takes place. Migration theory suggests new stages require new peoples’ whereas diffusion theory suggests that internal dynamics and proximity to and interaction with more developed neighbours is sufficient for this progress to take place. After considering the two hypothesis is some (limited) detail, the post argues that diffusion theory seems more likely than migration, particularly in relation to the three confederations of peoples that marked the fall of the Roman Empire of the West. However, some effort is made to avoid purist views so that even though diffusion theory is preferred to migration, the conclusion of this post is that, more likely than not, the dynamics of diffusion took place over a background of continuous migration flows and miscegenation that culminated in the ethnogenesis of the people we came to know as the Goths. While it is possible that the dominant class narrated its own origins back to Scandinavia, what we know as the Goths most certainly also included peoples of Iranian descent (e.g.: Scythians), Dacian descendents of the survivors of Trajan’s conquests as well as other Germanic peoples (e.g.: Heruli).

The second part of the discussion of the history of the Goths is an upcoming discussion in 12 parts describing the history of the Goths since the beginning of their interactions with the Roman Empire until their demise at the hands of the muslim invasions of the Iberian peninsula 400 years later..

ECB Decisions: Deposit Facility rate, APP, Unequal Supply Growth & Oil

The first week of December will probably be remembered as “that time the ECB thought rates weren’t negative enough and decided to drop them by another 15 bps “. However,  the central bank did more than just lower the rates:

• QE was extended until such time as the ECB sees fit
• A lot of confusion seems to have been generated about the ANSA.
• some details were provided about Greek coverage by QE, and
• Geopolitical risks were acknowledged.

The decisions were not unanimous but there was an overwhelming majority in support. This post reviews what I (arbitrarily) consider the most important points.

Giving another shot at regular posting…

If you’ve been reading this website for any length of time (thank you if that’s the case), you’ll be aware that I have tried to experiment with a wide range of posting formats. Evidently, I struggle to find a balance between a piece with enough content to be interesting and writing a post that is short enough for me to be able to do it briefly and with some regularity, while I do everything else I actually have to do.

With this in mind I’m going to try another thing. This time, I’m going to try to write 1 short opinion piece a week about financial markets and 1 short opinion piece per month about political developments… starting from December… 🙂

Given my failures in the past (evidenced here, here, here and here), I’m not going to promise anything, but I hope to be able to do this.

ECB Report 2015Q3 – Resilience in the face of localised instability

As was the case previously, this post is divided in 4 parts:

• First, I consider the ECB’s most orthodox policy tools, the policy rates.
• Secondly, I review the structure of the ECB’s balance sheet.
• This is then followed by a more indepth consideration of the elements pertaining to different forms of direct financial market intervention,
• Lastly, I provide a brief review of the recent developments in Target2 balances.

Following these considerations, I conclude that

• The third quarter of 2015 was relatively calm for the Eurozone
• No changes in policy rates took place.
• On the liability side, the growth of bank notes stabilised
• On the asset side, QE and the LTROs remained important contributors to growth
• The ECB’s exposure to the Greek financial sector through ELA is less than 2.5% of its balance sheet.
• The PSPP continues to grow at a steady pace and, bar any other policy innovations, may end up accounting for at least 24% of the balance sheet of the ECB by September 2016.
• Greece is still not covered by the PSPP.
• Given the turbulence in Greece, this stability is consistent with the improved strength of the EZ due to the extensive tools at the disposal of the ECB and the fire-power it endows it with.
• Continued QE did not erode the exchange rate value of the Euro any further.