Water becomes an asset class. Inflation is no longer transitory. The good and the bad news about omicron. Evergrande defaulted but nobody said so. Don’t covet what others have – decide for yourself what you desire.
QUOTE OF THE WEEK
ARTICLE OF THE WEEK
Willem Buiter, Water as an Asset Class Is Here
(Project Syndicate, 16 December 2021)
Ten years ago, the economist predicted that water would eventually become “the single most important physical-commodity-based asset class, dwarfing oil, copper, agricultural commodities, and precious metals.” Now he observes that the technology and infrastructure for creating an integrated global market in water and water rights is advancing quickly, with promising new ventures entering the market. “Give it another decade, and exchange-traded funds for water and water rights will be part of the new normal for investors”, he says (metered paywall – reads in 7-8 min).
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Paul Krugman, The Year of Inflation Infamy
(The New York Times, 16 December 2021)
The columnist concedes defeat about his view on inflation and explains why the “team transitory” (to which the Monthly Barometer also modestly belonged) lost. This is a balanced and detailed view. Interesting throughout for those keen to understand the current and future inflation dynamic (in the US). His takeaway: “how little we know about where we are in this strange economic episode. Economists like me who didn’t expect much inflation were wrong, but economists who did predict inflation were arguably right for the wrong reasons, and nobody really knows what’s coming.” (metered paywall with prior registration – reads in about 10 min).
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Umair Irfan, The good and bad news about the omicron variant
(VOX, 15 December 2021)
Much is still unknown about omicron, but the thing to remember from this article is: “Omicron may be less risky for each of us — but more risky for all of us.” The variant seems to lead to less severe cases of Covid-19 than earlier strains of the coronavirus but is far more contagious than any version of the virus to date. It can also evade some immune protection from vaccines and prior infection (metered paywall – reads in 6-7 min).
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Evelyn Cheng, Evergrande slides into default while some ratings agencies keep quiet
(CNBC, 10 December 2021)
10 days ago, Evergrande triggered a default. What is interesting about this is the comment from Alicia Garcia-Herrero, Natixis’ chief economist for Asia-Pacific: “We should have been calling this a technical default for a long time already, but nobody dared.” Quite incredible, worth pondering and food for thought for the China investors bulls (free access – reads in 3 min).
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Luke Burgis, How to know what you really want
(Psyche, 15 December 2021)
An entrepreneur who is also a philosopher and theologian uses René Girard’s mimetic theory to explain how we can resist the herd and forge our own path in life, from career choices to new purchases. What we need to know? A desire is different from a necessity – it is a social process and it is mimetic. Girard inspired Peter Thiel and countless others to break free from the cycle in which they were caught. As always with Psyche, there are practical recommendations. Two that we liked: (1) Beware of becoming obsessively focused on what your neighbours have or want; (2) Map out the systems of desire in your life. And remember to live an anti-mimetic life! (metered paywall – reads in 8-10 min).
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