Fund Strategy
Daniel Ben-Ami Editorial, Fund Strategy magazine
Daniel Ben-Ami is the editor of Fund Strategy. He has worked as a financial journalist for over 20 years during which time he has contributed to numerous national and specialist publications. His book on global finance, Cowardly Capitalism (Wiley, 2001), was recommended by the Baker Library of Harvard Business School. Ferraris For All, his new book defending economic progress, will be published in July and his personal website can be found at http://www.danielbenami.com/ including a blog which can also be followed at http://twitter.com/danielbenami. Daniel can be contacted at daniel.ben-ami@centaur.co.uk
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Market theories did not cause the crisis
26 July 2010
Critics can easily pick holes in the efficient markets hypothesis (EMH) as an explanation of financial market behaviour. But blaming the EMH for the recent economic crisis, as some are doing, is absurd.
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A great debate - not
21 Jul 2010
It is hard to get excited about the great austerity debate in the Financial Times (FT) this week. The discussion is far narrower, and less great, than the shouty headlines suggest.
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Eurozone only part of recovery story
12 July 2010
Last week the International Monetary Fund (IMF) correctly identified the turmoil in the eurozone as a destabilising force in the global economy.
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Confusing cause and effect
8 Jul 2010
An interesting attempt to explain the recent economic crisis comes from Russell Roberts, an economics professor at George Mason University in Virginia.
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Another take on eurozone
6 Jul 2010
Having recently written a cover story on the possible break-up of the eurozone I was particularly interested to hear what the BBC had to say on the subject.
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Global debate skims over the root causes
5 July 2010
Last week the media discussion of the world’s economic plight started to shift from DD to D. A debate emerged about the possibility of another great depression rather than a simple double dip. Another D could be used to describe much of the debate: dumb.
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The D-word
1 Jul 2010
The D-word seems to have taken over from the A-word as the main topic of economic debate this week. That is the discussion has switched from austerity to depression.
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Noise belies empty rhetoric on growth
28 June 2010
The idea that there is a big global debate about economic policy is misleading. Any disagreements are much narrower than generally assumed.
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Half-baked
21 June 2010
The crisis in the eurozone erupted because of a combination of interlinked local, regional and global factors. Daniel Ben-Ami examines the complex stresses and strains that could lead to the break-up of the currency bloc.
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Too scared to cut, too dumb to grow
21 June 2010
Despite all the talk of austerity in this week’s budget the scale of cuts made this year is likely to be small. This is in line with the trend in much of Europe to exaggerate the immediate scale of austerity.
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Eurozone versus England
18 Jun 2010
For those bored of the World Cup there is plenty of reading on the eurozone economic crisis to be done over the weekend.
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Asia powers ahead
16 Jun 2010
Asia provides one of the few bright spots in a largely gloomy world economy—although it is a pretty big bright spot.
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Bank bashing revisited
14 Jun 2010
Bashing the banks was bad enough during the financial meltdown of 2008-9 but it is even more damaging now.
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Confused responses to a Chinese puzzle
14 June 2010
The spectre of labour unrest and rising wages in China has brought to the fore many prejudices. Perhaps it is the sight of workers in a nominally Communist country going on strike and even committing suicide. For whatever reason the discussion is confused.
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Meet the author
8 Jun 2010
For those who are interested this is my meet the author video for Ferraris For All.
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Cameron’s upside-down land
7 Jun 2010
David Cameron is rapidly proving his understanding of economics is even poorer than that of his predecessor.
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Debt spreads hit euro launch levels
7 Jun 2010
Fissures are widening in the eurozone despite the announcement of a €750 billion (£643 billion) stabilisation package only a few weeks ago.
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Eurozone split in north-south divide
7 June 2010
The eurozone may yet stave off collapse but it is not the institution it used to be.
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Debt spreads hit euro launch levels
7 June 2010
Fissures are widening in the eurozone despite the announcement of a €750 billion (£643 billion) stabilisation package only a few weeks ago.
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Germans launch stealth counter
2 Jun 2010
German central bankers have evidently launched a stealth counter-attack against their eurozone colleagues (see yesterday’s post).
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Stealth attack by central banker
1 Jun 2010
Although central bankers are often assumed to be the ultimate diplomats they are quite capable of making catty remarks.
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We need proactive not reactive governments
31 May 2010
Last week austerity started to bite among some of the larger European nations.
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Austerity declared
25 May 2010
The age of austerity has begun. Yesterday’s announcement of £6 billion in spending cuts and the interview by David Laws, the chief secretary, in the Financial Times on Saturday were open declarations of austerity.
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Risk reversal does not signal new age
24 May 2010
This week’s cover story examines one of the most remarkable trends in recent years. Developed and emerging economies have become increasingly alike in terms of their risk profiles.
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Merkel’s diversion tactic
19 May 2010
Evidently Angela Merkel, the German Chancellor, can play “blame the speculator” as proficiently as her British and American counterparts.
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Debt pain
18 May 2010
The new report on The Limits of Debt by Andrew Smithers of Smithers & Co puts the rise of private sector debt into perspective.
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Dates for your diary
17 May 2010
A few days after the inauguration of the Liberal-Conservative government its weaknesses in relation to economic policy are becoming clearer. In fact they are amazingly similar to those of New Labour.
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Eurozone SO mirrors American economy
17 May 2010
Last week saw a raging debate on the other side of the Atlantic which was, at least to us economics geeks, hilarious.
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Estonia to join eurozone?
13 May 2010
Given the eurozone’s troubles it is surprising that anyone would want to join or that the grouping would be open to more members.
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Governor speak
12 May 2010
Speeches by central bankers are notoriously cryptic. Even the slight raising of an eyebrow can have a deep meaning.
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After the euphoria
11 May 2010
The European Union’s €750 billion (£643 billion) bail-out package was certainly impressive in scale but will it solve the eurozone’s problems?
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Lack of vision leaves economy hanging
10 May 2010
From an economic perspective the impact of the British election result is being grossly exaggerated. The uncertain outcome is a symptom of the problems confronting British politics rather than the cause of economic weakness.
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Special election comment
7 May 2010
From an economic perspective the impact of the British election result is being grossly exaggerated. The uncertain outcome is a symptom of the problems confronting British politics rather than the cause of economic weakness.
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Eurozone the key event
5 May 2010
There should be no doubt about the most important economic story in the news—and it is not the British election.
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Crisis puts eurozone's future at risk
4 May 2010
Last week may well have marked the beginning of the end of the eurozone. Not only was Greece’s sovereign debt downgraded to junk status but other countries in the eurozone, most notably Portugal and Spain, started suffering from contagion.
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Stop the blame game and tackle the cause
3 May 2010
Despite the huge volume of comment on the Greek financial crisis and its spillover into the eurozone, there is a remarkable omission. Instead of discussing the root causes of the turmoil there is a bizarre blame game in which everyone seems intent on holding someone else responsible for the troubles.
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Crisis puts eurozone’s future at risk
3 May 2010
Last week may well have marked the beginning of the end of the eurozone. Not only was Greece’s sovereign debt downgraded to junk status but other countries in the eurozone, most notably Portugal and Spain, started suffering from contagion.
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Eurozone survival in danger
26 Apr 2010
It is looking increasingly unlikely that the Greek financial crisis will be the last tragedy facing the eurozone.
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Saturated
26 April 2010
Scaremongers stoke fears about water shortages and the need for rationing and it rises as an investment theme. But the problems of supply can be blamed on lack of investment in infrastructure and a dearth of political will, writes Daniel Ben-Ami.
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A poverty of thought lies behind 'shortage'
26 April 2010
Philosophical distinctions are often derided as useless. In relation to water scarcity they are literally a matter of life and death.
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American supports China on renminbi
23 Apr 2010
Not all Americans agree with their government’s view on the renminbi.
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Stop Goldman hysteria
20 Apr 2010
For an astute comment on the hysteria around Goldman Sachs see Sean Collins on the American Situation blog. Apart from anything else it puts the rank opportunism of Gordon Brown’s statement on the affair into context.
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Let Goldman speak - still
19 Apr 2010
Two weeks ago I wrote a blog post arguing that Goldman Sachs should be free to reply to its critics. Last week the Securities and Exchange Commission, America’s main financial regulator, accused the investment bank of fraud. Does that mean Goldman’s right to speak should now be curbed?
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Tackling the global responsibility deficit
19 April 2010
The world economy is suffering from responsibility evasion. Most governments are hoping that other countries will bear most of the weight of generating a global recovery.
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Tories fail to take off
14 Apr 2010
The Conservative manifesto contains less hype than Labour’s (see yesterday’s post) but is equally lacking in ambition.
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Big mouth and small ambition
13 Apr 2010
A useful rule-of-thumb in politics is to be wary of any statements which are hard to dispute. On those grounds alone the Labour manifesto fails miserably from the start.
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Models need human factor to make sense
12 April 2010
Numbers can be an essential aid to understanding financial markets and economies. They can also be highly misleading.
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Let Goldman speak
9 Apr 2010
It is good to see Goldman Sachs defending itself against its critics.
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Election result certain
6 Apr 2010
Although Gordon Brown has only just confirmed the election will be on May 6, the outcome is certain.
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Currency row reveals American anxieties
5 April 2010
Rows about currencies are rarely just about currencies. They usually symbolise broader tensions between countries.
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Greece’s unfinished tragedy
30 Mar 2010
It seems that last week’s agreement to bail out Greece was not so historic after all. It was not even much of a bailout.
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Nought out of 10 for innovation, Darling
29 March 2010
A key factor determining the health of any economy is its capacity to innovate. This means not only its ability to come up with new ideas but also to put them into practice.
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Elitist’s thesis is flawed to the core
29 March 2010
The author of this analysis of the global economic crisis blames bankers and deregulation. His call for austerity and regulatory reform exposes this prominent economist as deeply conservative.
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Top Obama adviser on innovation
25 Mar 2010
Innovation is a key topic for anyone concerned with promoting a growing economy. So a public interview on the subject with Christina Romer, President Obama’s chief economic adviser, is particularly noteworthy.
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A shocking statistic
22 Mar 2010
The Daily Telegraph is right to describe the news about the level of state spending in Britain as a “shocking statistic”.
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Time to puncture the tech bubble myth
22 March 2010
There is an almost universal misconception that the stockmarket experienced a technology bubble in the late 1990s, followed by a painful bust. This is simply untrue.
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What caused the crisis?
19 Mar 2010
How many possible causes of the financial crisis can you name?
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Interested parties
17 Mar 2010
America is getting increasingly annoyed with China over its alleged manipulation of the renminbi.
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China builds ‘bullets’, Britain fires blanks
15 March 2010
Headlines about a proposed high-speed rail network linking London and Scotland tell a tale of ambitious investment in transport infrastructure. The details tell a different story.
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Going for growth
11 Mar 2010
Despite my criticisms of growth scepticism I have never claimed that the mainstream critics are entirely hostile to increasing output.
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Beat your greens
8 Mar 2010
If anyone wondered what I do in my spare time one of my favourite activities is upsetting “greens”.
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Why invest abroad via the back door?
8 March 2010
How to invest in Britain without investing in Britain. That seems to be a preoccupation of fund managers catering for the British market.
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The doomsday cycle
4 Mar 2010
You may be worried about the fall-out from the last global financial crisis but some influential people are already thinking about the next one.
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Asking the right questions
3 Mar 2010
It is rare for economists to ask the right questions nowadays so a new pamphlet from the Centre for Policy Studies is welcome.
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Petty squabbling
1 March 2010
While politicians argue about when and where to make cuts, they remain blind to the overwhelming crisis - lack of economic growth. Daniel Ben-Ami examines the climate surrounding the inertia that is gripping the main parties.
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Britain facing crisis of sluggish growth
1 March 2010
The slight upward revision in the figures for Britain’s GDP growth in the final quarter of 2009 is little cause for cheer. While economic growth is always welcome, a closer look at the figures reveals no signs of a strong recovery.
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Fiscal fetishism
25 Feb 2010
The financial pages are dominated by discussion of fiscal consolidation and bankers’ bonuses. Many other subjects, including important ones, hardly get a look in.
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Economists miss the point
24 Feb 2010
Although economists tend to have a high opinion of their abilities they have a knack of missing the point in key debates.
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Brown’s pledges
22 Feb 2010
Most of Gordon Brown’s weekend speech was entirely predictable. In essence he was saying: “We are good and the Tories are bad”. But there was one point that is worth examining in more detail.
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Main parties will not have serious debate
22 February 2010
The main focus of the debate on economic policy in the run-up to the election is becoming increasingly clear. More importantly it is apparent what will be virtually ignored.
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Battle of the letters
19 Feb 2010
The saga over the various sets of economists’ open letters is reminiscent of taunting in a children’s playground.
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A waste of paper
15 Feb 2010
The widely publicised open letter from 20 economists in yesterday’s Sunday Times shows the profession has as little imagination as the politicians they purport to advise.
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Economic frailty not just a Greek concern
15 February 2010
The most amusing event of last week had to be Gordon Brown’s brief appearance on the BBC Newsnight programme. In the space of 30 seconds he found seven different ways of saying that helping to tackle the Greek crisis was not Britain’s responsibility.
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Games with the governor
10 Feb 2010
There is a widespread misconception that the Bank of England’s quarterly Inflation Report press conference is about macroeconomics.
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Must do better
9 Feb 2010
It is not looking good for those who are hoping Britain will achieve an export-led recovery.
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Obsession with China masks West’s inertia
8 February 2010
It is easy to become so focused on someone else’s problems that you fail to grapple with your own. That is a lesson that the West’s leaders, fixated with China, would do well to learn.
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Fear of squeezing
5 Feb 2010
I have long argued that western politicians are far too preoccupied with cutting public spending. But given that this is their obsession it is remarkable how reluctant they are to squeeze the economy.
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Checking the Treasury’s sums
3 Feb 2010
Today’s Green Budget from the Institute for Fiscal Studies (IFS) and Barclays Wealth is essentially an accountant’s view of Britain’s economic outlook. Although it is a valuable exercise it has its limitations.
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Too many rules ruin economic progress
1 February 2010
A lesson that should have been learned from the economic crisis is that there are severe limits to the efficacy of rules and regulations.
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Cultural aversion to wealth stifles economic growth
1 February 2010
It is rare for so much fuss to be made over anything so small. Yet the announcement of a 0.1% rise in Britain’s GDP in the final quarter of 2009 got economic pundits highly excited last week.
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Ferraris For All
29 Jan 2010
Anyone interested in Ferraris For All, my forthcoming defence of economic progress, should read my latest review on spiked as it introduces some of the book’s key themes.
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Calm down
26 Jan 2010
It is always a mistake to read too much into short term data such as quarterly GDP statistics. If the data is preliminary it is an even bigger error.
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Bubblephobia
25 Jan 2010
With the election debate heating up it is becoming apparent that bubblephobia is rampant among the political class.
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Politics missing from economic debate
25 January 2010
Last week saw the most decisive intervention so far in the economic debate leading up to the election but it did not come from a politician.
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The great row on China
21 Jan 2010
The GDP growth figures published today are likely to reinforce both sides in what could be called The Great China Debate.
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Too stimulating
20 Jan 2010
It looks like the International Monetary Fund (IMF) is running scared. The thrust of Monday’s speech by Dominique Strauss-Kahn, the IMF’s managing director, was that nasty things will happen if governments exit from economic stimulus packages prematurely.
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Start growing at home
18 Jan 2010
Stand on your own two feet but use other people as a crutch. That in essence is the advice from Professor Peter Spencer, the chief economic adviser to the Ernst & Young Item Club, on the publication of the group’s influential quarterly Economic Outlook.
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Great leaps still leave the Dragon far behind
18 January 2010
Arguably China came of age last week. After more than three decades of rapid economic growth it achieved the titles of the world’s largest exporter and the world’s biggest car producer.
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Debt pain still to come
15 Jan 2010
The report on global debt by the McKinsey Global Institute, the economic research arm of a global management consultancy, is likely to make painful reading for fund managers.
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China bulls and bears
13 Jan 2010
So far China is the macro theme of the week. Not only has it gained the titles of world’s largest exporter and world’s biggest car producer (see January 11 post) it has also raised its banks’ reserve ratio in a bid to cool the economy.
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China remains poor
11 Jan 2010
It would be easy to conclude from recent news releases that China is marching towards world domination.
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Empty policy bodes ill for economic revival
11 January 2010
Barring an apocalypse it looks certain there will be a general election in Britain over the next few months.
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Waiting for round two
8 Jan 2010
Just when you thought the crisis was ending it is only just beginning.
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Double dippers
5 Jan 2010
Although most commentators are relatively upbeat about recovery there is a grinch tendency consisting of economists who see a high chance of a “double dip”.
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Dubai apocalypse
18 Dec 2009
Cataclysmic sandstorms have ravaged Dubai just when it looked like things could not get any worse for the desert emirate. An American army captain is leading a team of elite special forces on a suicide rescue mission.
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Avoiding Greek contagion
17 Dec 2009
Although they might not admit it most finance professionals in Britain probably care little about Greece’s fiscal crisis. It is a relatively small country with a small economy.
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Why the world survived
15 Dec 2009
Politicians and central bankers frequently slap themselves on the back for, they claim, saving the world from another Great Depression. If it were not for their decisive action and astute policies they say the world would have suffered an economic apocalypse.
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Pre-Budget, post mortem
10 Dec 2009
How was it for you? Too much of the commentary on the Pre-Budget Report focused on specific measures announced by the government.
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Dumb and dumber
8 Dec 2009
This week looks certain to illustrate the banality of economic and political debate in Britain.
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Bubble 2
3 Dec 2009
Perhaps Dubai’s debt problems do not represent the second stage of the financial crisis after all (see November 30 post).
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Autistic economics?
2 Dec 2009
Tyler Cowen, a professor of economics at George Mason University in Washington DC, often writes interesting comments on contemporary economics. So I was particularly sad to read about the shortcomings of his new book.
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Return to crisis
30 Nov 2009
Before taking a break from blogging several weeks ago I hoped that signs of recovery would be clearer by the time I returned.
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Taking a break
12 Oct 2009
This is my last blog post before going on extended leave. I look forward to returning in early 2010 with more comment on strategic and macro issues.





