Author: Edouard Chazal

Thomas Piketty : “Germany Has Never Repaid.”

ZEIT: So you’re telling us that the German Wirtschaftswunder [“economic miracle”] was based on the same kind of debt relief that we deny Greece today?

Piketty: Exactly. After the war ended in 1945, Germany’s debt amounted to over 200% of its GDP. Ten years later, little of that remained: public debt was less than 20% of GDP. Around the same time, France managed a similarly artful turnaround. We never would have managed this unbelievably fast reduction in debt through the fiscal discipline that we today recommend to Greece. Instead, both of our states employed the second method with the three components that I mentioned, including debt relief. Think about the London Debt Agreement of 1953, where 60% of German foreign debt was cancelled and its internal debts were restructured.

→ Medium

A Finance Minister Fit for a Greek Tragedy?

At home, “V Is for Varoufakis” posters hung in the windows of cafes. Greeks showered him with love, twittered over his looks, and wrote adoring satires of his glamorous life and wide-ranging talents. Varoufakis’s oldest friends were bewildered by the international fuss, but everyone I’ve spoken to who knew him before this ministerial turn says Varoufakis’s behavior on the European stage is typical: He’s outspoken, passionate and confident about his ideas. That, apparently, was the problem, because Varoufakis did not go to Europe merely to negotiate Greece’s future. He had bigger ideas. He wanted to show the Europeans how to save Europe itself.

→ The New York Times Magazine

It Never Rains in California

Bill Gross on liquidity :

While private equity and hedge funds have built-in “gates” to prevent an overnight exit, mutual funds and ETFs do not. That an ETF can satisfy redemption with underlying bonds or shares, only raises the nightmare possibility of a disillusioned and uninformed public throwing in the towel once again after they receive thousands of individual odd lot pieces under such circumstances. But even in milder “left tail scenarios” it is price that makes the difference to mutual fund and ETF holders alike, and when liquidity is scarce, prices usually go down not up, given a Minsky moment.

→ Janus Capital

Bill Gross Gets Personal: ‘I Just Wanted to Run Money and Be Famous’

But make no mistake: This Bill Gross, the one eying the French crullers, isn’t that Bill Gross, the one who bent markets to his will at Pacific Investment Management Co., who built one of the most enduring track records in bond management history, who moved markets with his pronouncements. That old Gross wanted fame more than power and riches, and he wanted it with a hot eagerness that made enemies. By the time Pimco cast him out, he was considered by colleagues—there’s no way to sugarcoat this—to be a world-class jerk who’d lost his touch.

→ Bloomberg