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Daniela Gabor Profile picture
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24 Nov, 4 tweets, 2 min read
interest rates on UK government bonds are at historical lows, yet every pundit writes like this country has no financial sector or central bank.
if Labour falls for 'we're going to cut better than the Tories', we're all doomed.

on the other hand, there is always this solution to 'replenishing the coffers that were never empty'

educating the British public on economics is an urgent public mission, so that it gives pundits and politicians no more excuses for not educating themselves either.

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More from @DanielaGabor

Daniela Gabor Profile picture
25 Nov
imagine you're a powerful hedge fund owner, powerful enough to count a Chancellor of the Exchequer as former employee.
But your daily job of counting the billions is not fullfilling enough.
you want to do good.
not by moving your hedge fund from an offshore haven so you pay proper taxes, but by helping those in need, your way.
Philanthropy, you believe, is far more effective than government interventions, because you have control over it.
so you set up a hedge fund that doubles down as NGO in the Global South.
you choose your target underprivileged group carefully, those glossy brochures need the right smiles to melt down philanthropic hearts.
Read 9 tweets
Daniela Gabor Profile picture
12 Nov
fascinating Sintra @ecb Forum for insights into where the DSGE world is moving
- Fiscal strikes back (though not formally)
- we're all into average higher inflation targeting
- r* (natural rate of interest) is now so close to ZLB that QE for ever
who said that academics dont have superpowers?
and we're back to the 1990s, greetings from Alan Greenspan.
Read 5 tweets
Daniela Gabor Profile picture
11 Nov
good morning to @EBRD who illustrates their 'neutral' position in the 'Empire strikes back vs 'The Return of the Jedi' takes on state with, literally, a 'Nanny State'
seriously, this is the least effort ever put into pretending you're not in the neoliberal 'shrink the state' camp ever .
Literally announcing it on the cover.
Not surprising though for long-term observers of the EBRD
our fondest memory of @EBRD in Romania?

In 2004, it paid EUR 125 million for a 12.5 % stake in profitable, state-owned bank BCR to accelerate its privatisation

In 2005, it sold it to Erste Bank for EUR 750 mln.

EUR 600 million reward for actively milking Romanian state.
Read 5 tweets
Daniela Gabor Profile picture
20 Oct
'Decarbonising is easy' once you drop market neutrality:

new policy paper setting out what next after @ecb @Lagarde and @Isabel_Schnabel accepted 'market neutrality' means subsidising carbon intensive companies.
we dug into bond data to identify carbon bias of @ecb corporate bond purchases, a bias that reflects the problematic commitment to market neutrality:

half of outstanding bonds included in the
ECB list are issued by carbon-intensive sectors.
how can ECB green its corporate bond purchase?

A lower-carbon list stops subsidies to fossil fuel companies.

A low-carbon list no longer subsidises carbon-intensive sectors.
Read 7 tweets
Daniela Gabor Profile picture
19 Oct
oh, the FT Editorial Board is now seeing unicorns.
short-lived though, gone in the next paragraph. As is any analytical coherence.
well, nice for US Treasury to have a mouth-piece with such global reach.

Nothing on private creditors refusing to join debt suspension/restructuring, it's all China.

ft.com/content/c4c0eb…
Read 4 tweets
Daniela Gabor Profile picture
17 Oct
Goldman Sachs/Credit Suisse 2018 repo loans to Ecuador can easily fall under 'predatory lending' to poor countries. Not to exonerate Moreno government, but:

If you're a private institution, you take out repo loan to finance assets, say government bonds you previously purchased.
you 'sell' your government bonds to GS, agree to repurchase them later.
trick - you remain economic owner of government bond collateral & get interest payments from said government.

because you retain credit risk, your repo lender GS has to do collateral management.
w balance sheets: you, Investor 1, have pledged your Ecuador government bonds as collateral to GS, who's given you USD 90 cash for USD 100 of Ecuador government bonds. Haircut 10%.
Ecuador government bonds stay on your balance sheet (assets) because you remain economic owner.
Read 11 tweets

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