This series of articles was authored to point out some of the often hidden, unrecognized, ignored, or forgotten assumptions underlying the functioning of markets in capitalism. Additionally, ways in which markets fail in their intended purpose also feature prominently.
Markets frequently fail, despite their pristine reputation among capitalists. One way is the many actions taken by buyers and sellers to tilt a transaction in their favor. These visible hands create asymmetries between the parties. Jason Voss, CFA, explains.
Markets are usually not systemic. Instead, from the bird’s-eye perspective of "Capitalism," many businesses are "opportunities" in the same way that it feels good to hit yourself in the head with a hammer: It's much better once you stop.
Markets are useful but imperfect, says Jason Voss, CFA. One imperfection is that they assume fungibility. Assuming that a dollar spent on one thing is equivalent to a dollar spent on something else has serious consequences for investors.
Markets assume a context entirely out of view of their participants, which can have deleterious effects for both suppliers and demanders, Jason Voss, CFA, observes in the latest installment of his Where Markets Fail series.
Markets are useful, but imperfect, Jason Voss, CFA, explains in the first installment of his Where Markets Fail series. One glaring flaw is their inability to discount the future. This results in many deleterious and often long-term consequences.
Prestige Funds has brought to market a fund that uses a variety of managers to invest in private debt and high-yield credit. The Multi Finance Opportunities fund aims to deliver an annual return of 5% to 7%. Investment Week (UK) (14 Feb.)
The UK House of Commons has voted 303-258 against a measure to endorse Prime Minister Theresa May's Brexit strategy, which aims to gain concessions from the EU on how the border with Ireland is handled after the UK leaves the EU. Jeremy Corbyn, who leads the opposition Labour Party, says May should "admit that her strategy has failed" and return to Parliament with a "coherent plan." Politico (14 Feb.)
Factors such as Brexit uncertainty, a weak economic outlook and a dovish stance by the Bank of England will put a brake on the pace of interest-rate increases this year, economists say in a Bloomberg survey. The economists predict rates will rise to 1% in the fourth quarter from 0.75%, rather than a previous forecast of before Q3. BNN Bloomberg (Canada) (15 Feb.)
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