Edward Chancellor
Auteur de Devil Take the Hindmost: A History of Financial Speculation
A propos de l'auteur
Edward Chancellor estudio historia en Cambridge y Oxford. A principios de la decada de los '90 trabajo en el banco de inversiones Lazards, en Londres. Escribe habitualmente en el Financial Times y en The Economist
Œuvres de Edward Chancellor
Capital Returns: Investing Through the Capital Cycle: A Money Manager's Reports 2002-15 (2015) 38 exemplaires
Étiqueté
Partage des connaissances
- Sexe
- male
- Professions
- journalist
banker - Relations
- Chancellor, John (father)
Chancellor, Anna (sister)
Chancellor, Alexander (uncle) - Organisations
- Lazard Freres & Company
Breakingviews.com
GMO
Membres
Critiques
The book without the last 2-3 chapters is worth 5 stars. The entertainment value is huge. The last three chapters were a bit boring -- maybe because the focus changed from fraudsters and industry millionaires to policy makers and large groups of anonymous brokers? Or maybe I just prefer pre-post-modern history... -- and the language became more Academese. It took me some time to process the text, as the author likes to use a lot of complicated words where simpler ones would have sufficed.
This is the second Chancellor book that I've just read, the first being "Devil Take the Hindmost," a history of financial speculation. If you've read that book, a good bit of the first third of this one will be familiar.
Chancellor's central thesis is that interest rates establish asset prices and that interest rates over the past fifteen years have been dangerously low.
As this book is a mix of history and current analysis, Chancellor comes across as a curmudgeon (as opposed to the more scholarly tone of "Devil Take The Hindmost"). If you're willing to forgive this, the book is a worthwhile investigation into a range of issues surrounding interest rates.
For all their importance, Chancellor does note the challenges of precisely establishing the true interest rate (nominal interest with inflation factored in) at any given moment. That said, it is still possible to establish a ballpark number.
An interesting fact from the history: did you know that Mesopotamia had two interest rates? They had a rate of 33% for barley loans, and 20% for silver loans.
I feel like Chancellor's takedown of Piketty's theory that wealth inequality increases when growth is less than the rate of return on capital is unfair. Chancellor is talking about interest rates while Piketty focuses on return on capital; Chancellor conflates the two, when they are distinct. In commercial banking, return on capital is the difference between market rates and central bank rates. To try to boil down return on capital to just bottom line interest misses a lot of the nuance and difference across different sectors and times in history.
There are a few areas in the book that are worth exploring further. In particular, I'd love to learn more about appropriate and inappropriate uses of demurrage. Chancellor seems to feel that it is inappropriate across the board, but I think this is a fundamentalist stance. I'm also interested in further exploring the ways that interest rates should or shouldn't enter into credit-based (as opposed to commodity-based) monetary systems.
Overall, Chancellor does make a strong case that interest rates should be somewhere in the 5% region.
If you're a finance geek, you'll like this book. If anything, interest rate rises over the past two quarters have vindicated Chancellor's position.… (plus d'informations)
Chancellor's central thesis is that interest rates establish asset prices and that interest rates over the past fifteen years have been dangerously low.
As this book is a mix of history and current analysis, Chancellor comes across as a curmudgeon (as opposed to the more scholarly tone of "Devil Take The Hindmost"). If you're willing to forgive this, the book is a worthwhile investigation into a range of issues surrounding interest rates.
For all their importance, Chancellor does note the challenges of precisely establishing the true interest rate (nominal interest with inflation factored in) at any given moment. That said, it is still possible to establish a ballpark number.
An interesting fact from the history: did you know that Mesopotamia had two interest rates? They had a rate of 33% for barley loans, and 20% for silver loans.
I feel like Chancellor's takedown of Piketty's theory that wealth inequality increases when growth is less than the rate of return on capital is unfair. Chancellor is talking about interest rates while Piketty focuses on return on capital; Chancellor conflates the two, when they are distinct. In commercial banking, return on capital is the difference between market rates and central bank rates. To try to boil down return on capital to just bottom line interest misses a lot of the nuance and difference across different sectors and times in history.
There are a few areas in the book that are worth exploring further. In particular, I'd love to learn more about appropriate and inappropriate uses of demurrage. Chancellor seems to feel that it is inappropriate across the board, but I think this is a fundamentalist stance. I'm also interested in further exploring the ways that interest rates should or shouldn't enter into credit-based (as opposed to commodity-based) monetary systems.
Overall, Chancellor does make a strong case that interest rates should be somewhere in the 5% region.
If you're a finance geek, you'll like this book. If anything, interest rate rises over the past two quarters have vindicated Chancellor's position.… (plus d'informations)
Although this book came out back in 1999, it is still the best history of speculation that I have come across.
Backdrop to the book: in what circumstances is speculation positive for a society? In what situations is it negative?
One of the first things that Chancellor establishes is that, although, at the extrema, "speculation" (stereotypically harmful) and "investment" (stereotypically beneficial) can clearly be differentiated, like most things, most of the economy lives in the murky middle, where there is a mix of both.
There is another way to look at speculation though (which, again, is helpful in some instances and inappropriate in others): that it is only with speculation that we get anything new. There is no such thing as zero risk, but if we're always minimizing risk, we're maximizing stasis (which, in its own way, ends up creating existential crisis). In other words, there is absolutely a utility to some forms of speculation (although this argument can get overblown).
One of the things that I found most stunning about the book is how severe some of history's bubbles have gotten. Did you know that, during the South Sea bubble in London in the early 1700s, that the entire economy basically slowed to an idle as a significant portion of all investable funds we're dumped into the stock of one company? Hundreds of merchant vessels just sat, unused, down at the docks, as no one was willing to forgo investing in the South Sea Company to fund merchant activity. There are numerous examples like this throughout the book. One of the takeaways: cryptocurrency has not yet seen a bubble anything like on this scale yet...
Chancellor does an expert job tracing the parallels between various bubbles (and the countless times nations have stated: "this time it will be different"). The Tulip Mania in the Netherlands in the 1600s was very much like the bubble in Japan in the 1980s for example (swap tulips for golf memberships).
In reading the book, I'm reminded of David Flemming's emphasis on the core importance of "carnival" to a healthy society. For a society to have any stability, it needs to regularly experience moments of inversion, where up becomes down, where peasants can become kings (and kings peasants). In this way, speculative bubbles serve a foundational societal purpose: to show that anything really is possible (for a time). Better to be a millionaire and a pauper than just humdrum middle-of-the-road all of your life...
Looking to speculate? Chancellor will help you brush up on tell-tale "top" and "bottom" signals, and help keep your aspirations sober.… (plus d'informations)
Backdrop to the book: in what circumstances is speculation positive for a society? In what situations is it negative?
One of the first things that Chancellor establishes is that, although, at the extrema, "speculation" (stereotypically harmful) and "investment" (stereotypically beneficial) can clearly be differentiated, like most things, most of the economy lives in the murky middle, where there is a mix of both.
There is another way to look at speculation though (which, again, is helpful in some instances and inappropriate in others): that it is only with speculation that we get anything new. There is no such thing as zero risk, but if we're always minimizing risk, we're maximizing stasis (which, in its own way, ends up creating existential crisis). In other words, there is absolutely a utility to some forms of speculation (although this argument can get overblown).
One of the things that I found most stunning about the book is how severe some of history's bubbles have gotten. Did you know that, during the South Sea bubble in London in the early 1700s, that the entire economy basically slowed to an idle as a significant portion of all investable funds we're dumped into the stock of one company? Hundreds of merchant vessels just sat, unused, down at the docks, as no one was willing to forgo investing in the South Sea Company to fund merchant activity. There are numerous examples like this throughout the book. One of the takeaways: cryptocurrency has not yet seen a bubble anything like on this scale yet...
Chancellor does an expert job tracing the parallels between various bubbles (and the countless times nations have stated: "this time it will be different"). The Tulip Mania in the Netherlands in the 1600s was very much like the bubble in Japan in the 1980s for example (swap tulips for golf memberships).
In reading the book, I'm reminded of David Flemming's emphasis on the core importance of "carnival" to a healthy society. For a society to have any stability, it needs to regularly experience moments of inversion, where up becomes down, where peasants can become kings (and kings peasants). In this way, speculative bubbles serve a foundational societal purpose: to show that anything really is possible (for a time). Better to be a millionaire and a pauper than just humdrum middle-of-the-road all of your life...
Looking to speculate? Chancellor will help you brush up on tell-tale "top" and "bottom" signals, and help keep your aspirations sober.… (plus d'informations)
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El fet que la crisi de 2008 fos internacional, independent de les regulacions locals, sembla assenyalar els baixos tipus d’interès com a principal responsable de la gran bombolla financera que va esclatar el 2008. Certament al tipus baixos també s’hi pot afegir una multiplicitat de forces casuals, com són la proliferació de productes financers complexes, classificacions de crèdit maldestres, models de risc carregats de problemes, una conducta de passar el problema a un altre en l’àmbit del crèdit hipotecari, regulacions insuficients, eufòria col·lectiva, tassa excessiva d’estalvi a nivell mundial i altres. Però això no treu responsabilitat als baixos tipus interès.
L'autor té una visió crítica dels governadors de la Reserva Federal dels Estats Units Alan Greenspan i Ben Bernanke, els quals es preocupaven principalment de regular la política monetària per assolir un objectiu d’inflació anual del 2% i obviar l’increment desmesurat i especulatiu de preus de la borsa, l’habitatge i altres actius.
Els economistes monetaristes tendien a pensar que la gestió de la massa monetària i els tipus d’interès només afectaven a la inflació, i que les bombolles econòmiques eren producte d’una regulació mal feta. El fet que l’increment especulatiu de preus fos un fenomen internacional, amb regulacions locals diferents, sembla desmentir en part aquesta afirmació. Però el paper galdós dels bancs centrals respecte a la regulació bancària i regulació dels productes financers també tenen una responsabilitat en la bogeria que es va produir. Més viat sembla que els governadors dels bancs central estaven molt focalitzats en el seu objectiu de mantenir la inflació anual en el 2% i consideraven que les bombolles especulatives no afectaven a l'economia productiva. Cagada pastoret.
La tesi principal del llibre, el fet que els baixos tipus d’interès fomenten l’economia financera i afavoreixen als tenidors d’actius especulatius, és contrària a la famosa obra de Thomas Piketty, “El capital en el segle XXI”, la qual aposta pel contrari: els major retorns del capital (interessos, beneficis, dividends i rendes) afavoreixen als rics. Els fets empírics donen la raó a Edward Chancellor.
L’argument bàsic d’aquest llibre també es pot trobar a "Dogs and Demons: Tales From the Dark Side of Modern Japan", títol d’Alex Kerr que ve a explicar el mateix en el seu capítol dedicat a la bombolla japonesa de la dècada de 1980.
El que sembla clar és que quan un factor de producció (ja sigui capital o treball) és molt barat i abundant, s'assigna de forma ineficient a l'economia i la seva productivitat és baixa perquè no hi han incentius per incrementar-la. Només cal veure els baixos salaris de Catalunya per confirmar aquesta tesi. Han afavorit el creixement desmesurat del sector turístic, creant treballadors pobres. En l'àmbit del capital, el mal ús que a vegades s'ha fet dels préstecs ICO creats per mitigar la crisi del COVID ha permès que algunes empreses zombies tinguin activitat algun temps més, ha possibilitat inversions estrafolàries, prostituint preus i allargant agonies.
Títol recomanable, d'una certa extensió i que incorpora una bona bibliografia. Per aprofitar-lo, cal una lectura reposada. Com a curiositat, cita la legislació catalana del segle XIV, on al banquer que no podia tornar els dipòsits acabava amb el cap tallat. Referenciat a "Power and Profit: The Merchant in Medieval Europe", de Peter Spufford… (plus d'informations)