A virtual roundtable with 5 economists and financial analysts edited by Jorge Nascimento Rodrigues
© janelanaweb.com and contributor for Expresso Portuguese weekly newspaper, April 2010

Topics

. Portugal is a  Greece number two?

. What can Portuguese Government do to invert the risky near-default situation?

. The Euro zone risks a serial default wave?

. Greece must default and opt out from the euro?

. This turmoil is a failure of the European Monetary Union (EMU)?

. An European Monetary Fund (EMF) would be useful?

See PORTUGUESE PROFILE (Main figures Portugal and Greece Benchmark) at the END of the Roundtable

VIRTUAL ROUNDTABLE (April 28)

MARK THOMA (Univ. Oregon): « I think it is possible to invert the situation with poor policy choices, so the trick is to get policy correct»

1. The difficulty Portugal faces is due to its inability to implement the monetary policy it needs. Without such ability, the adjustment is on the real side of the economy – e.g. employment and output – and there simply aren’t any good choices. Thus, the government’s job is to minimize the painful adjustment that likely lies ahead, not an easy job.

2. I think it is possible to invert the situation with poor policy choices, so the trick is to get policy correct. That requires a unified approach to the problem that does not appear to exist, so the danger is there.

3. The stress is revealing the weak points in the euro system, e.g. the inability to use independent monetary policy to address financial problems. I’m not yet convinced that the union is in trouble, but the risks are clearly higher than I would have thought not all that long ago.

4. I think that a European Monetary Found would help. Unfortunately, it is difficult to create new, functional institutions while a crisis is underway so something like this could help next time, but it can’t help presently.

PETER COHAN (Peter Cohan & Associates, Boston): «It’s possible a serial default but not likely. »

1. It helps to look at some numbers and ratings.  Greece’s government bond rating is in junk territory with a budget-deficit-to-GDP ratio of 13,6%. Portugal is in better shape — S&P lowered Portugal’s credit rating two notches to A- which is still pretty good and it has a lower budget-deficit-to-GDP ratio of 9.4%.But there is growing concern about Portuguese debt. The gap between the yield on that Portugal’s 2-year notes rose to 4.3 percentage points above comparable German debt from 3.1 percentage points Monday. A week ago that spread was at 1.4 percentage points. It would take $53 billion to bail out Portugal and $120 billion to do the same for Greece.

2. I guess the Portuguese government could announce a major deficit reduction plan with specific targets and a schedule to repay debt early.

3. It’s possible a serial default but not likely.  I think some combination of the healthier EU countries and the IMF will step in to keep that from happening.

4. If it was just a matter of economics, it would be better for Greece to default and opt out.  But for political reasons which I do not understand, there seems to be an enormous barrier that blocks that logical, but painful move from happening.

5. To me this turmoil it’s a classic case that is similar to what happened during the financial crisis in the U.S.  The fiscally conservative members of the EU end up being punished for being sound while the ones who borrowed more than they could repay and hid that fact end up being rewarded by the healthy ones. I think that the EU admitted members who did not meet its standards of fiscal health for political reasons that I don’t understand and now those members could bring down the entire edifice.

6. There are two options: let the free market work – in the sense of culling the weak and letting them fend for themselves or punish the prudent by demanding that they bail out the countries that can’t repay what they owe.  If the EU survives this crisis with the same membership, it will be necessary to create some kind of insurance fund that can deal with such problems when they recur.  But who will pay for it?

BILL WITHERELL (Cumberland Advisors): « The Portuguese government has been following much more responsible steps to resolve the problem and international investors should recognize this difference. »

1. Portugal is not Greece. It has a difficult but different debt situation. A considerably larger share of its overall external debt is private sector debt. The Portuguese government has been following much more responsible steps to resolve the problem and international investors should recognize this difference.  Portugal’s situation is being seriously worsened by contagion from Greece, which is indeed an irrational over-reaction. But the underlying situation has worsened as a result as refinancing costs have soared. That has to be a major factor behind the downgrade.

2. The Portuguese government will have to resolve to take additional fiscal restraints and also to tackle more aggressively structural reforms that will help the economy become more competitive internationally.

3. Several defaults are not impossible. What I think is increasingly likely is a restructuring of Greece’s debt, with some capital loss. That should not be necessary for Portugal or Spain unless the loss of investor confidence gets significantly more severe than it has to date.

4. Other Members certainly should not force Greece to default (as that would have a heavy impact on other Members) nor force Greece to “opt out” – which would mean Greece leaving the EU. As I understand it, they cannot simply opt out of the Monetary Union. A Monetary Union without Greece would appear to be a stronger currency, but the political ramifications of such a process being forced on them could do severe harm.

5. This turmoil is a symptom of fragility, demonstrating the need for reforms that will result in stronger coordination and discipline in the area of economic policies. While Greece is the most flagrant in this area, along with (intentionally) providing unreliable data, most other EMU members have also slipped in the past in one way or another.

6. While a European Monetary Fund might be useful, I do not think it is necessary as long as members are willing to make use of the International Monetary Fund which has been established to deal with such problems.

DAVID CAPLOE (Economy Watch, Singapore): «The Portuguese government might, again PUBLICLY, request the rating agencies like S & P to make clear and open the criteria they are using to make their ratings — especially when they are compared to other, more advanced countries whose statistical profile is similar to Portugal, but whose rating they have NOT downgraded. »

1. There are obviously some sovereign debt similarities — but we certainly don’t know the extent to which, or even if, firms like Goldman Sachs were involved in the Portuguese situation, as they clearly were with Greece. And that definitely makes a difference from a general stability point of view. That said, the debt / GDP ratios of the two countries are also different, although Portugal’s is, unfortunately, trending in a negative direction. Still, Greece’s is well above 100% and Portugal’s well under, so while I agree there’s a disturbing trend in Portugal’s sovereign debt situation, I don’t think the situations are structurally analogous at all. As for the market‘s reactions, well, we just ran an excellent piece from a German analyst who pointed out quite clearly how market speculators thrive on political ambiguity, of which Germany’s Angela Merkel has, unfortunately, contributed an outsize portion to the Greek situation.

2. Well, far be it from me to tell the Portuguese government how to handle a VERY tricky and dynamic situation — there are NO easy or clear answers. What I would suggest is that they PUBLICLY request the ECB / IMF / and other Euro-zone institutions to put a hold on obvious speculator / hedge fund plays on Portuguese debt for the next two weeks — similar to what the Greek government has done in banning “shorts for the next two weeks — until there can be a little more order and predictability in the entire situation. Beyond that, I don’t think there’s much they CAN do except wait for the otherwise seemingly inevitable onslaught of the speculators. In that context, though, they might, again PUBLICLY, request the rating agencies like S & P to make clear and open the criteria they are using to make their ratings — especially when they are compared to other, more advanced countries — if, indeed, there are any — whose statistical profile is similar to Portugal, but whose rating they have NOT downgraded. Indeed, I think it’s high time a little focus is put on the rating agencies themselves whose record is anything BUT blameless in this on-going disaster.

3. It’s POSSIBLE to have BOTH a “true default” AND a serial default within the Euro-zone. As we have continually pointed, there is a structural problem in the Euro-zone, which could be papered over as long as the global and European economies were doing well, but which became painfully evident in the aftermath of Black September 2008 and the lending freeze imposed by the Too-Big-To-Fail US banks, that immediately created what we now refer to as The Great Recession. So, unfortunately, BOTH of these are real possibilities, ESPECIALLY as long as the political leadership of the Euro-zone as a whole, and the major individual countries — above all, of course, Germany — remain unable / unwilling / unclear about how to make sure such defaults DON’T occur.

4. I can’t see ANY scenario in which forcing Greece out of the Euro-zone does ANYTHING but heighten the crisis, and make it worse for everyone — most particularly, the “next” such countries, namely Portugal, Spain, and — hold your breath — Italy, which was one of the original EEC 6 back in 1959. The default of Greece, and its expulsion from the Euro-zone — again, especially in the crass and chaotic way in which it would have to be done … IF it were to be done — would really throw the entire project into question. And while there are certainly problems with keeping the Euro-zone together — above all, bringing the fiscal, i.e., government spending, policies of ALL the countries into line, just as has occurred at the monetary level — dealing with those problems are INFINITELY preferable to letting the Euro zone collapse a) at all, and b) in such an undignified and uncontrolled fashion. There are also just too many real economic links among the Euro-zone countries to make such a de-linkage even thinkable, so, as Paul Krugman correctly said when this crisis first emerged, there really is no way to go but forward.

5. Certainly the fragility, as we have noted, and of a structural problem within the Euro-zone, namely, as above, the conflict between a single monetary policy formulated by the European Central Bank, and fiscal, or government spending, policy, which remains in the hands of the 16 member countries, and which, to be sure, they are going to be VERY reluctant to cede to ANY sort of “supreme” power. Now this is NOT a problem that can any longer paper over, as it was until Black September 2008, and there are neither immediately visible, let alone easy, solutions to this problem. Nevertheless, as we have noted, Europe as a whole — not just the Euro-zone — HAS become deeply unified by real economic links that ARE working, and which DO contribute to a genuine European solidarity. So while I think this DOES represent a structural crisis within the Euro-zone, I ALSO think there are counter-veiling forces to keep the zone together, and I think the test of real leadership — which, to be honest, has been sadly lacking in the current generation of European and, to be honest, American, political leaders as well — is whether they can find a way to BUILD on this genuine REAL ECONOMIC inter-connection to solve this problem between fiscal and monetary policy. It certainly won’t be easy, but it CAN be done — IF the leaders involved act like such, and have the VISION to use the existing base to solve admittedly difficult problems.

6. I think a European Monetary Fund (EMF) probably is necessary, and I don’t think it’s a bad thing for such a body to be created, especially as part of a transition from a situation of 16 fiscal policies vs. 1 monetary policy to whatever else may take shape. The IMF has plenty on its plate already, and, while it does seem a necessary part of an immediate solution to the Greek situation, I think neither it nor Europeans really WILL be comfortable with it being a permanent feature of the European political economic scene. So I think that an EMF is a very good idea, one whose creation could engage European creativity of the sort that oversaw the creation of the European Coal and Steel Community in the mid-50s, and then the European Economic Community, and return to the convertibility of European currencies, at the end of 1958. Obviously, the “deals” that will have to be made will be a bit more complex than those — which basically secured French markets for German industrial goods, and German markets for French agricultural goods — but I don’t think it should be beyond the capacity of Europeans to create such a body to help ease the inevitable strains of transition from 16 fiscal policies to somewhat fewer, even if not yet a single one.

GARY DYMSKI (Univ. California): « But if Europe fractures, then it’s every country for itself, and the nations with weaker positions will indeed have to adjust more – and will be riskier from a ‘solvency’ viewpoint – in future years.»

1. Portugal’s situation and that of Spain resemble the situation of Greece in some ways – for example, fiscal deficit as a share of GDP, trade balance, and so on. The fact that these Southern European nations have “structural deficits” on trade and on government expenditure is not surprising when we consider the overall structure of production and trade within the Euro area. High-productivity production and export capacity is monopolized by Germany and France, and lower-wage production and export capacity by other portions of the periphery of Europe. If a balance-sheet of Europe is drawn up, these national “problems” disappear in an overall picture of Europe’s strength. But here there is a catch-22. If Europe remains strong, then the markets will evaluate Europe as a whole, thinking of individual nation-states as part of this entity. But if Europe fractures, then it’s every country for itself, and the nations with weaker positions will indeed have to adjust more – and will be riskier from a ‘solvency’ viewpoint – in future years. But this raises the question of what is Europe? Is it the Euro? Is Germany being so cautious because it doesn’t want to set a precedent? Claro! But if Greece is given an unworkable deal that will fail, why should the markets believe there is any better future ahead for Portugal or Spain?

2. The Portuguese government has to mobilize on three levels: it has to work with other threatened nations to come up with common goals and ideas; it has to work within the Euro framework on behalf of the threatened nations, and it has to mobilize the population to fight for a decent standard of life and the maintenance of a real social safety net.

3. I think it is possible to imagine a scenario of serial defaults. We are seeing no political will for more creative solutions in Germany or France at the moment; the UK has a stagnant, wounded economy and is a by-stander; the US has a stagnant, wounded economy and has its own issues; and China is trying to outrun a housing bubble.

4. As I suggested, I think the nations that are being targeted by speculators have to come together to share ideas and come up with a common set of plans and proposals. In other words, Portugal and Spain, at the very least, must talk with Greece about the default/opt-out scenario and show some solidarity. For Portugal or Spain to side with Germany against Greece would be suicidal for the vision of  “one Europe.” What is needed now is a strong, clear, honest conversation about what “one Europe” means in the post-neoliberal world.

5. The turmoil in Europe represents the collision between the collapse of the conditions for continued accumulation under neoliberal conditions (financialization, market liberalization, race-to-the-bottom export-led growth, etc.) and the rules that were established for the Euro zone (in particular the Euro, the regulation of European banks, and European fiscal/monetary policy coordination. The Euro zone rules were adapted for a world of zero-sum tradeoffs wherein one country’s ‘win’ is another’s ‘loss’. That was the theme for growth in the neoliberal age; only the structural imbalance that permitted the US and to a lesser extent Northern Europe to act as “consumers of last resort” provided any scope for growth in that world. But that growth was, of course, based ultimately on a very fragile basis – and then, as we know, it collapsed.

6. From what I’ve suggested, Europe needs to rethink the terms and conditions of its union, and this means at core the institutional mechanisms it has available to resolve problems. It was assumed in putting Europe’s current rules into place, that Europe’s strength could be maintained only by disciplining those countries too weak to discipline themselves. The liberalization of markets that also accompanied the Euro zone, plus the actions of deregulated banks, created a situation in which structural imbalances unimagined previously came into existence. So simple discipline will not do any more. The conversation ultimately involves a very basic question, which no politician is prepared to answer: “What human rights and economic protections does a person have a right to, if that person is a European?”  Politicians in France answer that question regard the French; in Germany, regarding the Germans; etc. But not for Europe as a whole. And within each country, indeed, there are questions about “who is French?”, “who is German?” etc., that lead in very troubling directions. Indeed, in the end we have this question, “What human rights and economic protections does a person have a right to, given that that person is a human being?” In the end, the only end to this global crisis will come when we are ready to face that question. Until then, we live in the twilight.

PORTUGUESE PROFILE (Benchmark with Greece)

GDP 2009 (IMF list): $227.9 bn (Greece: $330.8 bn)

Population (Jan.2010): 10.6 m (Greece: 11.3 m)

GDP per capita PPP (2009): $21,859 (Greece: $29,882)

Average projected real GDP growth rate 2010-2011 (IMF/WEO): 0.47% (Greece: -1.53%, recession)

Unemployment rate: 10.8% (Greece: 10.2%)

Gross National Saving as % of nominal GDP (2009, National Accounts OECD): 8.1% (Greece:7.7%)

Refinancing needs for outstanding bonds 2010-2012 (Monthly Bulletin, IGCP, May 2010): €40,1 bn (Greece: €123 bn)

Direct Public debt ratio to GDP (2009): 77% (Greece: 115%)

General Government Gross Debt ratio to GDP (2009): 77.2% (Greece: 113.4%)

Public deficit ratio to GDP (2009): -9.4% (Greece: 13.6%)

Projected General Government structural deficit ratio to GDP (2010): -7.1% (Greece: - 8.9%)

Projected public debt ratio to GDP in 2012: 90.7% (Greece:148.8%)

Difference from boom to bust: 3.1 (Greece: 9.9)

Impact of fiscal adjustment on output relative do baseline: -5.3% (Greece: -24.8%)

Total Gross External Debt as % GDP (2009): 225% (Greece: 168.2%)

Net External debt position as % of GDP (2009): 88.6% (Greece:82.5%)

Total Gross External Debt as % Exports (2009): 817% (Greece: 832%)

Gross External Liabilities as % of GDP (2009): 281.5% (Greece: 188.4%)

Government gross external debt as % tax revenue (2009): 189% (Greece: 329%)

General Government net external debt as % of GDP: 74.9% (Greece: 78.9%)

Net International investment position as % of GDP (2009): 111.7% (Greece: 82.2%)

General Government debt hold abroad as % GDP (2009): 60.2% (Greece: 99%)

Projected Current account balance as % GDP (2010): -8.6% (Greece: -7%)

Projected Budget Balance as % of GDP (2010): – 7.9% (Greece: 10.2%)

Deterioration of the Real Effective Exchange Rate (1999-2008) based on the Nominal Unit Labor Cost of total Economy: 15.9 % (Greece: 12.4%)

Deterioration of the Real Effective Exchange Rate (1999-2008) based on the Nominal Unit Labor Cost of Manufacturing:  13.6% (Greece: 24.4%)

BIS Reporting banks consolidated claims on public sector as % GDP (2009): 23% (Greece: 32.3%)

Rating sovereign debt (S&P, April 2010): A- (Greece: BB+, junk status)

Peak CDS cost (April 27, 2010, daily close numbers): 385.89 basis points (Greece: 823.72 bp)

Peak Compound Probability of Default (May 6, 2010, daily close numbers): 32.63% (Greece: 52.61%)

European Banks exposure to Portuguese Debt: $244 bn (Greece: $206 bn)

Interest Rates 10-year government bonds (June 10, 2010): 5.23% (Greece: 8.15%)

Defaults in the recent past: 4 events – 1828; 1837; 1850; 1892 (Greece: 4 events – 1826; 1843; 1860; 1894)

Time Horizon to revert to a “bearable” public-debt level of 60% of its respective GDP (IMD Debt Stress test): 2037 (Greece:2031)

Sources: IMF GSFR 2010 (April); Daniel Gros and Alcidi Cinzia (VOX, April 23, 2010); S&P (April 27, 2010); CMA DataVision; IMF World Economic Outlook 2010 (April); FT Deutschland; IMF General Statistics; This time is different Chartbook 2010, NBER, Carmen Reinhart; Bloomberg BusinessWeek, April 29,2010; IMD Debt Stress test, IMD May 19, 2010, IMD World Competitiveness Center; BIS Quatertly Review (June 2010); The PIGS’ External Debt Problem, Ricardo Cabral (VOXeu.org, May 8th,2010); The Economist, June 10th, 2010; Current Account Imbalances in the Southern Euro Area, Florence Jaumotte and Piyaporn Sodsriwiboon (IMF, Workong Paper 10/139, June 2010).

Former Federal Reserve (Fed) Chief Paul Volcker’s so called Financial Reform Plan, released after President Obama’s speech decrying ‘fat cats’ on Wall Street, could be one of the most important prescriptions for the post-financial crisis. We interview two of today’s most important economics bloggers, University of Oregon Economics Professor Mark Thoma, editor of Economist’s View, and Dr. David Caploe, Chief Political Economist of the Singapore-based EconomyWatch.com, who holds a Ph.D. in International Political Economy from Princeton.

THE CONTEXT

Before getting to their intriguing thoughts, I would emphasize three contextual aspects of the environment in which any financial reform must operate.

“Systemic” concerns clearly go beyond such proposals as Consumer Financial Protection Agency to regulate financial products, or the so-called “populist” move to “downsize” megabanks, disallowing a market share beyond a certain size, say, 10 percent of deposits held nationally. One of the intentions of the Volcker Plan is to have the right to dissolve financial companies before they pose systemic risk. In addition, banking proprietary trade – trading on their own account – will be banned, and commercial banks will also be forbidden from owning hedge funds and private equity firms.

A new complex financial ecosystem

Following Giovanni Arrighi, we think a prime focus should be on so-called “financialization”: “systemic cycles of accumulation” of increasing scale and decreasing duration, each consisting of a phase of material expansion and a phase of financial expansion.

In this general context, the financialization wave from the 1970s changed completely the banking and financial ecosystems. While it was enough in the 1930s, for example, to separate commercial and investment banking, today, maintaining a wall between traditional banking and the leverage mania of new financial investment trusts and funds is no longer sufficient. The system is much more complex, as Gary Dymski has already explained in his research and the interview we published. Given this, a proposed modern form of the New Deal-era Glass-Steagall Act may not be adequate.

As David Caploe, in the interview below, emphasizes: “As you note, [the Plan] does nothing to deal with the serious issues that were raised by the ‘under cover of night’ revocation of any sort of regulation of derivatives in the waning days of the Clinton administration, which are the real problem today, and which Volcker simply doesn’t deal with in any way.”

This is what leads us to wonder whether the Volcker Plan misses the target.

The question therefore is whether the Obama administration has enough focus on Wall Street’s current business model. As Chris Wallen, from Cumberland Advisors, recently posted: “Volcker has become an advocate of reform, but only focused on those areas that do not threaten Wall Street’s core business, namely creating toxic waste in the form of OTC derivatives such as credit default swaps, and unregistered, complex assets such as collateralized debt obligations, and stuffing same down the throats of institutional investors, smaller banks and insurance companies.”

TBTF hold Washington hostage

It seems also the Plan does not deal with the lending freeze and the rent-seeking lobbying. Caploe argues: “The ‘lending freeze’ is a conscious effort of the Too Big To Fail (TBTF) banks and insurance companies to hold the political system hostage.”

This dovetails with another aspect: the liaison of lobbying with financial rent-seeking and “exuberant” financial leverage.

A study by Deniz Igan, Prachi Mishra, and Thierry Tressel, published in the Working Papers of the International Monetary Fund, found that lenders lobbying more on issues related to mortgage lending a) had higher loan-to-income ratios, b) securitized more intensively, and c) had faster growing portfolios than other lenders. Since the crisis, delinquency rates are higher in areas where lobbyist’ lending grew faster, and which experienced abnormally negative stock returns during key crisis events.

In their paper, “A Fistful of Dollars: Lobbying and the Financial Crisis”, the three IMF researchers studied empirically the hot “link”: “Lobbying is associated ex-ante with more risk, and ex-post with worse performance.”

One point is particularly relevant: in the current crisis, sixteen of the twenty lenders that spent the most on lobbying between 2000 and 2006 received funds provided by the government under the Emergency Economic Stabilization Act. In total, lenders that lobbied on specific issues received almost 60 percent of the funds allocated.

This “linkage” reveals one of today’s huge structural problems: political influence in the financial ecosystem, which has serious impact on overall financial stability.

The study concludes: “Our analysis suggests that the political influence of the financial industry can be a source of systemic risk. Therefore, it provides some support to the view that the prevention of future crises might require weakening political influence of the financial industry, or closer monitoring of lobbying activities to understand the incentives behind them better.”

As analyst Mark J. Lundeen recently put it, “politicians and lobbyists have become bigger players in the ‘free markets’ than the actual buyers and sellers.”

In countries like the US and the UK, the financialization wave went farther with politically dominant financial sectors. As Lord Robert Skidelsky posted recently: “At root, the battle between the two approaches is a question of power, not of technical financial economics”. Says the English biographer of Keynes, “Much more powerful financial lobbies now stand between pen and policy. If reformers are to win, they must be prepared to fight the world’s most powerful vested interest”.

Stopping “Short-termism”

As Mark Thoma says in the interview below: “One of those [things] is to make sure that bank executives have an interest in the long-run outcome of the transactions they engage in – the maximization of short-run profits through excessive risk-taking has to be stopped.”

Professor Thoma highlights one of the management barriers of today: optimal executive compensation induces managers to favor speculative components and a rent-seeking dynamic. Short-termism is thus linked with risk-taking. Any reform that is to be taken seriously will need to change these incentive dynamics.

INTERVIEWS by Jorge Nascimento Rodrigues, 2010 © I thank David Caploe for his helpful comments and careful revision.

David Caploe: “From a political point of view, it’s, as we say, DOA — dead on arrival. No one in [the US] Congress is taking it very seriously.”
Mark Thoma: “I don’t think the Volcker proposal by itself is nearly enough.”

Q: Do you think the Volcker Plan is appropriate to reform the financial system, and sufficient to limit the risks of the financialization trend?
David Caploe (DC): While I don’t think the Volcker Plan is particularly bad from an economic point of view — all it does is re-instate the division between commercial banking, which is relatively safe and boring and can legitimately receive deposit banking insurance from the Federal government and investment banking, which is much more speculative, and should NOT receive insurance from the government — it’s yet another example of, as we say in the US, “closing the barn door after the horse has already run out”: that is, it is simply not adequate to the issues the US and global financial systems currently confront. And from a political point of view, it’s, as we also say, DOA — dead on arrival. No one in [the US] Congress is taking it very seriously.
Mark Thoma (MT): I think that the Volcker plan does some good things, and it prevents some behaviors that could cause problems – big ones – in the future. And if a crisis does occur, as it will again someday, a rule like this will help to attenuate the effects. But I don’t see this particular problem as the key element of this crisis, so no, this alone is not enough. Much, much more is needed.

Q: Isn’t it too late? Or is now the right time to enforce limitations on what Obama called “the fat cats”?
DC: As my previous answer indicated, it’s WAY too late. There certainly needs to be both regulatory reform and — just as importantly — actual enforcement of regulations that already, and may soon, exist. But the Volcker Plan is just not relevant to either the immediate problems — above all, absolute transparency for ALL derivatives transactions, although, again, it’s also way too late for that as well — or the overarching ideological and ethical breakdown that began in the Reagan era and reached its unfortunate apotheosis during the nightmare years of Cheney / Bush.
MT: Well, it’s surely too late for the present crisis, but it’s not too late to do something to make things safer in the future. One of those is to make sure that bank executives have an interest in the long-run outcome of the transactions they engage in, the maximization of short-run profits through excessive risk-taking has to be stopped.

Q: It seems Volcker wants to return to some of the discipline rules of the Glass-Steagall Act of the FDR era, which were revised in the 1990s and gave “full speed ahead” to financial innovations in leverage, high speed trading, derivatives, etc. If passed in the Senate and House, will this shift in legislation return a sound financial system to the US?
DC: It’s precisely the return of Glass-Steagall, which the Democrats stupidly revoked when Clinton was in charge, under the direction of the “destructor-in-chief” Treasury Secretary Robert Rubin — former head of Goldman Sachs, then afterwards head of Citigroup, where he did such an excellent job of helping run it into the ground — and his loyal henchman, Larry Summers — now head of the National Economic Council — and HIS henchman, now Treasury Secretary, Tim Geithner. But as you note, it does nothing to deal with the serious issues that were raised by the “under cover of night” revocation of any sort of regulation of derivatives in the waning days of the Clinton administration, which are the real problems today, and which Volcker simply doesn’t deal with in any way.
MT: I don’t think the Volcker proposal by itself is nearly enough. I would like to see limits on leverage/higher capital ratios, much more transparency including using organized exchanges whenever possible (or at least reporting transactions to regulators), and more attention to the incentives the system creates for ratings agencies, mortgage brokers, real estate appraisers, etc.

Q: Financial people say this movement from the Administration will provoke a double dip in both the stock markets and the real economy. Does this seem possible? Or is it a purely political emanation from the financialization ecosystem?
DC: Not to speak too broadly, but financial people almost always argue that ANY kind of regulation is going to “shake investor confidence” and create problems in the markets, and, hence the real economy. How they have the nerve to say things like this after the absolute mess they created in the US and – because the US is the center of the world political economy – global economies is absolutely beyond me. The “lending freeze” is a conscious effort of the Too Big To Fail banks and insurance companies to hold the political system hostage via blackmail and extortion: until you assure us that you, the government / taxpayers, are going to cover ALL our losses — and remember, those from both derivatives AND unsecured credit cards have yet to explode, although the Greek crisis is giving us a small taste of the former — while we retain the profits, we’re not going to lend anybody anything, no matter how low the interest rate may be.
MT: They always make that argument, and always will. I am not worried about this.

Q: Is there a risk of an overlap of these and other financial reform plans with a fiscal or sovereign debt crisis in the US, as the deficit hawks argue?
DC: As Paul Krugman has correctly argued, there MAY be a problem in the distant future with inflation. At the moment, however, by far the most significant macro-level economic problem is unemployment in all sectors but finance, and the failure to do something serious about that is not just criminal from a human point of view, but is also totally destructive economically, since it continues the vicious cycle characterized by little or no growth due to the lack of effective overall demand — which remains the case, whatever the cooked numbers of the Bureau of Labor Statistics may pretend.
MT: I don’t think so. And there are some reforms, e.g. a transactions tax that could help with the long-run budget picture.

BRIEF PROFILES
David Caploe
David is President & CEO of the Singapore-based American Center for Applied Liberal Arts & Humanities in Asia – ACALAHA, and before that was Founder and Director of the MA program in Media Studies at New College of California in San Francisco. He moved to the island city-state in mid-2007 and recently became Chief Political Economist of EconomyWatch.com, while continuing efforts to develop innovative graduate education in Singapore, the education hub of East Asia.

Mark A. Thoma
Associate professor of the Department of Economics of the University of Oregon, he teaches monetary theory, macroeconomics, Econometrics, International Finance, History of Economic Thought, International Economics, Money and Banking, Microeconomics and Managerial economics. He also edits the blog Economist’s View.

Interview by Jorge Nascimento Rodrigues, 2010 ©

HIGHLIGHTS

“It’s not simply that finance capital has become dominant, or that financial returns have become dominant in national income flows. To understand the dynamics of the crisis and the possibilities for capitalist dynamics post-crisis, we must pay attention to the dynamics “inside” the financial system.”

“Regarding shadow banking, hasn’t the shadow banking system now shifted its shape? We now seem to have megabanks with one foot in the shadow-banking (unregulated, highly leveraged, off-balance-sheet driven) sector, and one in the formal sector, while we also have yet new forms of shadow banks as the private equity firms and hedge funds shift their foci to survive.”

“Given how fluid the market situation is, we must as analyze, re-analyze, re-examine all that we think we know about banking both in theory and in lived experience.”

“This was termed the era of “particle finance” by Charles Sanford, chairman of Bankers Trust in 1993. What the subprime crisis shows us in this respect is that we cannot trust banks and other financial firms engaged in reducing transactions to particles to trace out, understand, or evaluate the risks that might arise from such reductionist financial servicing. The regulators have to do it.”

PROFILE

Gary Dymski, American, is a specialist on Money and Banking, Political Economy, Macroeconomics and Urban Economics. He got his Ph.D. in Economics at the University of Massachusetts. He was director of the University California Centre in Sacramento from 2003 until 2008. He was visiting scholar at the Instituto de Economia, Universidade Federal de Rio de Janeiro, in 2001 and 2003, and at the Departamento de Economia da Universidade de São Paulo, also in Brazil, in 2003. He is the author of The Bank Merger Wave (M.E. Sharpe, 1999) and of Reimagining Growth: Toward a Renewal of the Idea of Development, co-edited with his wife, Silvana DePaula (Zed, 2005).

Recently he published an article at the Cambridge Journal of Economics (2010, n.34, pp. 239-255) titled “Why the subprime crisis is different: a Minskyan approach”, where he explains in detail why the crisis that began in middle of 2007 has been different from the previous financial crises analyzed by the instability financial hypothesis of Hyman Minsky in the 1970s. One of the structural differences regarding the original “model” of Minsky is the huge transformation of the world banking system after 1980 and the new wave of financialization since then. These differences have become deeply significant to be ignored.

One of the political economy implications is the following: Minsky’ financial instability hypothesis suggested that financial crisis can be resolved efficiently with lender-of-last resort and activist fiscal government interventions. This recent financial crisis and Great Recession has been more profound and resistant to policy interventions than the politicians and economists thought at the beginning of the panic.

Minsky, at his time, thought that in any crisis situation the Federal Reserve (in the US) would have leverage over a banking system that represented the fulcrum of the economy’s financing process – this is not more the case. Banks are no longer the most leveraged units. Nor are they any more as central a locus of liquidity risk within the overall economy. Also this analysis suggests that banking bigness is not the critical problem and targeting in general the shadow banking system is not sufficient. We have to go deeper “inside” the financial ecosystem, targeting the new structural elements of the new financialization wave since the 1980s.

The worst policy makers can do today is to ignore these new realities and “hidden the explosive under the carpet”, to quote Benoit Mandelbrot, the father of fractals.

INTERVIEW

Q: I was used with Minsky (money market capitalism concept) or Giovanni Arrighi (financialization) approaches or even with the beginning of the 20th century analysis by Rudolf Hilferding and John Hobson about the new characteristics of the financial capital from the 1850s. Reading your article, it seems we need today to analyze more surgically what happened “inside” the financial system in the 1980s and the 1990s. Do you think it emerged something new in the financial system that the usual “shadow banking system” approach does not catch fully?

A: You have read me the right way. It’s not simply that finance capital has become dominant, or that financial returns have become dominant in national income flows. To understand the dynamics of the crisis and the possibilities for capitalist dynamics post-crisis, we must pay attention to the dynamics “inside” the financial system.

Financial intermediaries adapted strategically

Q: What happened “inside” the system?

A: The financial intermediaries that have survived the shocks have adapted strategically in several ways: (1) identifying surgically a variety of different customer bases, tailoring products and cross-subsidies to these according to their revenue potential; (2) finding ways to expand their market reach; (3) opening foreign markets to financial practices that once would have been forbidden, using multi-national or regional compacts to help their cause; (4) using super-leverage to chase super-profits, thus leading other nations’ banks to buy the very subprime/CDO [collateralized debt obligations are a type of structured asset-backed security (ABS)] assets that would bring the US system.

Q: So, past analysis in white-and-black regarding the financial system aren’t much useful nowadays?

A: We used to have simple contrasts that were relatively tractable: the ‘small banks’ whose social responsiveness and economic responsiveness was unquestioned, vs. the ‘large banks’ that turned their backs on their home communities; the regulated and thus relatively benign ‘formal banking system’ vs. the shadowy and speculation-prone ‘shadow banking system.’ But all these prior images have to be subjected to rigorous examination now. Are small banks really more responsive to local communities and small businesses than large ones? If so, how? Regarding shadow banking, hasn’t the shadow banking system now shifted its shape? We now seem to have megabanks with one foot in the shadow-banking (unregulated, highly leveraged, off-balance-sheet driven) sector, and one in the formal sector, while we also have yet new forms of shadow banks as the private equity firms and hedge funds shift their foci to survive.

Q: You mean we need to re-examine what truly is the actual financial system?

A: Given how fluid the market situation is, how much bad paper and below-water assets the banks still hold, and how much uncertainty we have about the final changes to be made in financial regulation (if any), not to mention the strategic repositioning that banks are engaging in, I think there are more questions than answers right now – and we must as analyze, re-examine all that we think we know about banking both in theory and in lived experience.

A tsunami wave

Q: Do you think politicians and central bankers are aware of the new characteristics of this financial framework? The policies that are being studied in the US or in Europe to reform the financial system are correctly targeted?

A: Politicians and central banks have been in shock, in that the crisis has exposed suddenly and dramatically the operational flaws and balance-sheet weaknesses, as well as the problematic and deep interconnections among these firms. So the large megabanks that have been so successful in generating profits, in supporting politicians’ campaigns for election (where this is permitted), and in highlighting the argument that bigger banks are better banks, suddenly have to be seen not as the strongest and most able of all the capitalist sectors, but instead as faction-prone, self-seeking, and desperate supplicants for public assistance. The moment of crisis came as a tsunami wave – there was no time to reframe what these firms were, what they really contribute to the overall economy, and what purposes they could serve if they were turned in a public direction. As a result the subsidies came and flowed into these banks without much thought or pattern, and assurances by politicians that they would not let the system fail were framed no more imaginatively than as statements that they would not let these specific megabanks fail.

Q: But, the actual banking industry is really the one the politicians have pictured in their mind?

A: The tendency has been to discuss these interventions as necessary to save the ‘banking industry’ which plays a key role in economic growth through providing small businesses with needed credit, by financing home purchases, etc. But there has been no deeper consideration of whether these are the functions that ‘the banking industry’ does now; or whether the megabanks are performing these functions as part of the ‘banking industry’. This serious inquiry has only just begun.

The Era of Particle Finance

Q: As in the past, financial fee based business model (a rentier system) creates a kind of ecosystem, an entire “industrial complex”. What ‘s new it’s the new “entrants”, like real estate, builders, securities, rating agencies, financial arms of industrial companies, risky financial arms of traditional banks, cds market firms, hedge funds, even sovereign entities? How we regulate or des-inflate this ecosystem that gained the “hegemony” in the west economies?

A: I like your image of an ecosystem or industrial complex of fee-based – and hence fee-chasing – firms and sectors conducting large portions of ‘financial business’. This was termed the era of “particle finance” by Charles Sanford of Bankers Trust in 1993. The notion of particle finance is that financial transactions can be broken down into transactional ‘atoms’ that are independent of one another, that float around autonomously – so that firms competing for business would be competing primarily to provide shares of the overall needs of consumers, separated and priced apart from all consumers’ other needs. The logic of particle finance is to reduce financial actions and relationships to ever finer particles – for once this is done, there are more pieces of the overall transaction to be taken from other competitors. And what the subprime crisis shows us in this respect is that we cannot trust banks and other financial firms engaged in reducing transactions to particles to trace out, understand, or evaluate the risks that might arise from such reductionist financial servicing. The regulators have to do it. But here we have a problem indeed.

Q: Why?

A: For these regulators are spread among several areas … bank regulation, futures-market regulation, commodities-market regulation, etc., etc. Not to mention the transactions so specialized that occur ‘over the counter’ and are essentially unregulated. So while the ecosystem of particle finance creates an ever-larger, relatively flat surface of transactions without limit, this dimensionless space of transaction-based fee-seeking surpasses all the limits that have defined the independent terrains of action of financial regulators with different capital cities, operating procedures, and clients. The choice is then simple in principle. Either we shift regulation ever more to the control of a super¬-regulator that controls everything, or we prevent the emergence of this dimensionless space, by forbidding firms from engaging separately in transactions that should remain integral. Again, we are far from clear about which direction should be taken, or how all this should be done.

Q: That would mean to “terminate” the “particle” system?

A: It would at least modify the particle system by reducing the points at which things can be broken apart. You may have seen Wolfgang Munchau’s call for an end to “naked” credit default swaps in the Financial Times – that’s an example of gluing back together a joint transaction that had been split apart (of course in that case there is no ‘necessity’ to have covered swaps, but it goes in this direction).

Q: Is there a risk that this “particle” financial system flows to Asia?

A: Regarding Asia, there is the potential for particle-ization for sure. For one thing, some of the intermediaries that have provided specialized credit (like mortgages) have been very immature or not performed well. For another, there is regional competition to be ‘the’ financial hub. Japan vs. Korea vs. China is there, not to mention Singapore and Hong Kong. You won’t see this competition now – the national authorities are MUCH too cautious – but let’s see what happens after 4-8 years of robust growth faster than the rest of the world. “Stay tuned!”

RESUMO: 10 anos depois do início da derrocada do Nasdaq, em Nova Iorque, os negócios nascidos da Internet entraram na idade da razão, depois de várias doenças infantis e de manias da puberdade. Os vencedores vieram para ficar e mudaram a face da capitalização bolsista. A Google vale hoje mais do que a Coca Cola ou a IBM ou mesmo do que as suas “colegas” Intel e Cisco, e a Amazon tem um múltiplo impressionante, superior ao da Microsoft ou da Apple. Um novo candidato tecnológico para uma nova onda de exuberância irracional ainda não vingou. Ainda estamos a gozar a consolidação da “Terceira Vaga”. Mas, depois dos motores de crescimento económico se terem “deslocalizado” para a Ásia, poderá ser, agora, a vez da dinâmica financeira se “orientalizar” também.

A HIPÓTESE DE UM PADRÃO HISTÓRICO: Se tomarmos em consideração que a revolução tecnológica ligada às inovações radicais em torno da computação e das redes se iniciou nos anos 1960-1970, a investigação de Carlota Perez, da Universidade de Cambridge (Reino Unido), bem como da equipa de Tessaleno Devezas e Humberto Santos (já falecido), da Universidade da Beira Interior (Portugal), aponta para a hipótese de um padrão histórico que se voltou a verificar durante esta onda tecnológica, ainda que com peculiaridades: uma fase inicial com a duração de uma geração em que ocorreram duas bolhas e duas derrocadas bolsistas (2000 no Nasdaq e 2007/2008 em Wall Street), incluindo uma grande recessão (2009), e uma segunda fase de consolidação ou de “posicionamento” do novo paradigma tecno-económico vitorioso.

O FUTURO DE MÉDIO PRAZO: Carlota Perez levanta uma interrogação com impacto no curto e médio prazo – caminharemos efectivamente para uma “idade de ouro”, com uma nova vaga de investimentos produtivos associados às tecnologias de informação e comunicação (TIC), ou ficaremos por uma mera “idadezinha dourada”, se as políticas indispensáveis não forem tomadas para que a financeirização seja desalojada do seu lugar cimeiro e a preponderância do capital produtivo regresse, como no tempo das “revoluções industriais”.

A INTERROGAÇÂO DE LONGO PRAZO: A questão pertinente que deriva destas duas últimas décadas (1990-2010) é saber se o que temos pela frente, a longo prazo, é uma radiosa idade de ouro das TIC, uma espécie de longo boom, ou se uma Grande Depressão, como a de 1929-1933, poderá ocorrer na esquina das próximas décadas, conjugada com uma nova vaga tecnológica (“em sobreposição com a antiga”, diz Carlota Perez) e um novo contexto geopolítico como há 80 anos atrás.

ENSAIO DE ANÁLISE

No início de 2000, a euforia em torno da “Nova Economia” e das dot.com continuava apenas com pequenos beliscões, a que ninguém ligava. Uma multidão de gurus, de chefes de empresa, de empreendedores e de jornalistas continuava a viver um sonho. Kevin Kelly, o fundador da revista de culto Wired, falava, a partir do Silicon Valley californiano, de uma ruptura com as revoluções industriais anteriores e cantava a epopeia dos “imensos jovens empreendedores de 20 anos do Vale a valerem mais de meio bilião de dólares” quase do dia para a noite. Ele inventou dez mandamentos da Nova Economia que seriam repetidos pelos crentes.

A AOL – American on Line -, uma das estrelas da época, resolvia adquirir em Janeiro a Time Warner, um gigante dos media e do entretenimento. Viria a revelar-se um fiasco, mas, na altura, quase ninguém arriscava dizê-lo. A Yahoo, outra das estrelas da era Internet, atingia um máximo no Nasdaq (a bolsa das empresas tecnológicas em Times Square, em Nova Iorque) com as acções a venderem-se a mais de 400 dólares.

Rumores de derrocada

Apenas uma minoria de analistas, a contracorrente, avisava que o Nasdaq estava a chegar a um pico e que a “exuberância irracional” (como lhe chamara Alan Greenspan, presidente da Reserva Federal americana, em Dezembro de 1996), esse monstro de valorizações absurdas das dot.com, geraria o seu contrário: uma derrocada bolsista monumental.

O fiasco do chamado bug do milénio (conhecido por Y2k) deixou muita gente chocada e o flop do comércio electrónico no Natal de 1999 gerou muitas dúvidas sobre a ascensão meteórica da “nova economia”.

Em Fevereiro de 2000, os rumores de crash iminente na bolsa das tecnológicas nova-iorquina avolumavam-se, como então noticiámos (no semanário português Expresso e em janelanaweb.com), face à incredulidade dos homens do capital de risco (venture capital, na expressão em inglês que ficou célebre), dos empreendedores da economia digital, celebrizada por Don Tapscott, dos editores ou dos futuristas optimistas, como Harry Dent e Peter Schwartz.

Num estudo posterior ao crash, de Tessaleno Devezas, Harold Lindstone, e Humberto Santos, referia-se que, no espaço de trinta anos, no período de uma geração, a infra-estrutura da Internet passara dos primeiros passos em 1969 (com a Arpanet) para o seu pico em 1999 (uso do Protocolo Internet v6), sendo previsível que se passasse de “fase” e que uma correcção drástica nos activos ocorresse.

Casos, como a emergência da Google (que, em seis anos, desde que entrou em bolsa em 2004, passou a valer quase tanto como a mais “velhinha” Apple) e a difusão das plataformas de redes sociais mais recentes, são já filhos dessa nova fase.

Março negro

Os dias do apocalipse tecnológico ocorreriam a 11 de Março e depois a 28 de Março, numa dupla assinatura inesperada. O índice do Nasdaq saltou de 2600 pontos em Abril de 1999 para mais de 5132,52 pontos no pico histórico durante a sessão de trading 10 de Março de 2000. Depois desceria, mas voltaria a subir até aos 5040 pontos a 27 de Março, criando a ilusão de que a derrocada inicial teria sido passageira, em “V”. Mas, mortiferamente, a partir de 28 de Março voltaria a cair espectacularmente até 14 de Abril (34% em duas semanas e meia), e até ao final do ano num processo em ziguezague, fechando nos 2251,7 pontos.

A quebra do Nasdaq no dia 14 de Abril foi de 10%, a quarta maior da história das bolsas americanas num só dia. Os maiores pânicos financeiros diários em Wall Street até à data foram a 19 de Outubro de 1987 (a célebre Black Monday) e em 19,28 e 29 de Outubro de 1929 (datas ordenadas por ordem decrescente da dimensão da queda bolsista). Na mais recente crise financeira de 2007/2009, a maior queda diária em Wall Street ocorreu a 15 de Outubro de 2008, durante o pânico financeiro, e foi de 7,87%.

Um caso de estudo

A velocidade da derrocada do Nasdaq ainda hoje é um caso de estudo. A quebra seria de 56% em apenas dez meses, enquanto, no mesmo período na crise de 1929/1930, a queda seria de 31% e entre Outubro de 2007 e Julho de 2008, na primeira fase da crise recente, foi apenas de 18%. Entre o pico da bolha do Nasdaq em Março de 2000 e o ponto mais baixo desta crise em 9 de Outubro de 2002 – quando o índice tecnológico atingiu 1114, 11 pontos – a derrocada somou quase 80%. Segundo os cálculos da altura do analista Peter Cohan, divulgados no The New York Post, a destruição de valor durante esta derrocada teria atingido os 6 triliões de dólares (quase 7 biliões de euros, ao câmbio da altura), 60% do PIB americano naquele ano. Quase dez anos depois, o Nasdaq ainda está abaixo dos 2300 pontos, no patamar em que fechou o ano de 2000.

Durante a euforia das dot.com, o rácio do preço das acções em relação aos ganhos (designado em inglês por P/E, price earnings ratio, ou simplesmente por múltiplo) no conjunto das 500 empresas cotadas incluídas no índice da Standard & Poor’s (que abrange todas as bolsas americanas) havia chegado a valores superiores a 44, acima dos 32,5 que atingira em Setembro de 1929 (ver quadro I em anexo), como então o sublinhou Robert Shiller, o académico de Yale que publicaria em Abril de 2000 um livro marcante, precisamente intitulado “Exuberância Irracional”.

No caso do Nasdaq, o múltiplo atingiu em 1999 mais de 200 e em 2000 ainda estava nos 125! Shiller disse-nos, então, em entrevista ao Expresso e à janelanaweb, “que não havia paralelo”. O volume de negociação no pico do Nasdaq chegou a atingir o dobro do que ocorria no New York Stock Exchange, onde estavam cotadas as empresas da “velha economia”.

As duas bolhas seguidas

Mas o que parecia estar enterrado em finais de 2001 voltou a renascer das cinzas, não no Nasdaq, em Times Square, mas nas bolsas tradicionais em Wall Street, na baixa de Manhattan. O índice Dow Jones, depois da quebra de 2001, subiria ao máximo histórico de quase 14100 pontos em 15 de Outubro de 2007, segundo a Barron’s.

Carlota Perez, investigadora em Cambridge, no Reino Unido, especialista em ciclos tecnológicos, fala de um padrão de duas bolhas associadas nesta última revolução das tecnologias de informação. Uma primeira fase de “instalação” em que a exuberância irracional campeou pelas novas empresas tecnológicas, alimentando uma primeira bolha e depois uma derrocada, a que se seguiu alguns anos depois (menos de uma década) uma bolha financeira e um crash mais amplo e global.

Mas a seguir a essa tormenta de dois crashes, poder-se-á seguir o bom tempo, uma fase de “posicionamento” e “maturidade” da nova tecnologia, uma era de ouro. A investigadora garante que estamos em transição para essa era, ainda que admita que se fique por algo menos radiante, meramente “dourado”: “Esse é o perigo que corremos hoje”. Se não forem adoptadas medidas de contenção da financeirização e de prioridade ao capital produtivo, diz a investigadora na entrevista que nos concedeu (que pode ser lida aqui em inglês).

Ao fim destas duas tormentas há um grupo de líderes da revolução tecnológica iniciada nos anos 1970 que parecem consolidar-se (ver quadro II em anexo). A Amazon surge como a empresa internet com maior múltiplo de valorização (57,58!) e a Microsoft, apesar dos “ataques” de uma renovada Apple ou da emergente Google, consegue manter-se no topo da capitalização bolsista (mais de 252 biliões/mil milhões de dólares), ainda que com um múltiplo muito mais baixo.

Atracção fatal

O que hoje parece absurdo é como no espaço de uma década os investidores caíram na mesma armadilha duas vezes. Da primeira vez, entusiasmaram-se com uma tecnologia espantosa, uma inovação “básica”, como lhe chamam os especialistas em tecnologia. Da segunda vez, seguiram o filão da especulação imobiliária.

Nos dois momentos, houve sempre um mesmo padrão de comportamento que funcionou como uma atracção fatal: o cheiro da realização de ganhos financeiros rápidos. O pano de fundo: uma vaga de financeirização sem paralelo desenrolou-se ao longo de duas décadas.

Primeiro, no final dos anos 1990, em torno das entradas em bolsa das start-ups da nova economia. E, num segundo andamento, no final da década de 2000, através de um processo de alavancagem inacreditável realizado com veículos financeiros (alguns deles sairiam do anonimato em meados de 2007, como o famoso subprime) assentes numa onda de inovação financeira (“algo sem paralelo”, sublinha-nos Carlota Perez), na bolha imobiliária e nas benesses dadas por Alan Greespan com uma taxa (de juros) directora da Reserva Federal a valores muito baixos entre 2002 e 2004. Em termos reais, as taxas de curto prazo, nos EUA, desceram abruptamente de 5% em meados de 2001 para 0% em meados de 2002. O incentivo a um comportamento de alto risco não poderia deixar de acontecer.

O papel crucial destes novos veículos financeiros – que subitamente se tornaram nomes ou siglas mediáticas, como subprime, MBS, SIV, cds, etc. – continua hoje a ser estudado e gera polémica. Gary A. Dymski, professor de Economia da Universidade da Califórnia, em Riverside, salientou inclusive que esta crise financeira recente é distinta das anteriores do século XIX e XX em virtude justamente do papel destes novos veículos.

Em “Why the suprime crisis is different: a Minskyan approach” (Cambridge Journal of Economics, 2010, 34, pp 239-255), Dymski sublinha que, desde a desregulação dos anos 1980, emergiu um novo ecossistema do capital financeiro cuja fotografia completa não se esgota na existência do que é designado como um “sistema bancário na sombra” (shadow banking system). O sistema financeiro tornou-se um universo de “partículas” (Charles Sanford, presidente do Bankers Trust, disse, nos anos 1990, que viveríamos numa era de particle finance) e um complexo ecossistema que vai muito para além da tradicional alavancagem que nos habituámos a ver desde os anos 1850 e da ancestral actividade bancária. Os bancos propriamente ditos deixaram de ser inclusive “os elementos centrais” do risco de liquidez e de incumprimento no conjunto da economia e não são hoje sequer as “unidades económicas mais alavancadas”, refere o académico.

Do animal spirits à arritmia cíclica

O comportamento aparentemente “irracional” é a fase visível do mecanismo de pensamento e acção das multidões e nasce de uma pulsão para a euforia e o pânico típicos do animal spirits que cada um de nós tem. O credo que se repete é sempre o mesmo: “desta vez é diferente”.

Por isso há como que uma “clonagem” sempre que as circunstâncias são propícias à especulação financeira, apesar das lições da história. Só uma minoria se lembra da sua própria experiência ou de gerações anteriores, e sai a tempo, antes do pânico.

Historicamente este padrão de comportamento é sempre narrado ex post. Mas a história económica (bem como outras dimensões da história) é arrítmica. O padrão é cíclico, mas desenvolve-se, primeiro, sem grande ruído, e, depois, apanha-nos de surpresa. As quebras são sempre súbitas, abruptas, precipitadas e inesperadas. As suas causas profundas são, anos ou décadas mais tarde, descritas com facilidade pela pena dos historiadores económicos, mas as crises são provocadas por factos aparentemente irrelevantes ao senso comum.

No início de 2000, misturaram-se coisas a quem ninguém ligou, como o fiasco do bug do milénio, a desilusão com o e-commerce natalício e a estupefacção com a compra da Time Warner pela AOL. Em meados de 2007 seriam umas peripécias em torno de um veículo financeiro desconhecido, o subprime. Só algumas mentes a contracorrente viram nesses sinais, sinais de crise. Simplesmente, nunca têm massa crítica para hegemonizar o estado de espírito dos meios profissionais da economia e das finanças, dos políticos e governantes e da opinião pública.

A mudança (geofinanceira) do dia seguinte

O mais interessante que ocorreu nestes dez anos foi, no entanto, a mudança geofinanceira. O efeito da derrocada do Nasdaq em 2000 e depois a correcção no Dow Jones em Setembro de 2001 provocaram uma quase hecatombe na mobilização anual de capital através das bolsas, quer por entradas em bolsa como por outras emissões.

Segundo a análise da última década pela World-Exchanges.org (portal da World Federation of Exchanges), assistiu-se a uma quebra de 67%: o capital mobilizado através das bolsas caiu de 894 mil milhões de dólares em 2000 para 306 mil milhões em 2002, só se assistindo a uma viragem de trajectória em 2003. Os valores de 2000 só voltaram a ser atingidos e ultrapassados em 2007 (966 mil milhões de dólares), tendo, no entanto, caído para valores próximos do início da década em 2009 (856 mil milhões).

O impacto no dia seguinte foi mais profundo na Ásia (onde a mobilização de capitais via bolsa caiu 71% até finais de 2002) e nos EUA (69%) do que na Europa (onde, depois de uma quebra de 49% até final de 2001, viria a entrar num boom até final de 2008). Contudo, dez anos depois, é a Ásia que lidera a mobilização de capitais através das bolsas (com uma diferença de quase 50 mil milhões em relação aos EUA e de mais de 100 mil milhões em relação à Europa). A capitalização de mercado na Ásia passou de 16% do total mundial em 2000 para 31% em finais de 2009, passando à frente da Europa.

As doze bolsas com crescimentos superiores a 80% na sua capitalização bolsista (avaliada em dólares) entre Janeiro de 2009 e Janeiro de 2010 estão em 7 casos na Ásia emergente (Indonésia, Bolsa nacional da Índia, Shenzhen/China, Bolsa de Bombaim, Austrália, Taiwan e Singapura), 4 no leste da Europa e Médio Oriente (Istambul, Varsóvia, Budapeste e Tel Aviv), e 1 na América Latina (Brasil), comparando com a subida de 46% do Nasdaq, de 34% da Euronext e de 31% do New York Stock Exchange.

Ironia da história, simbólica desta “mudança”, é o facto de que, desde 2005, as empresas chinesas que entraram em bolsa mobilizaram 210 biliões de dólares (cerca de 150 mil milhões de euros), mais 14% do que as americanas.

ANEXO DE QUADROS
Quadro I
Valorizações históricas médias do índice S&P 500
(P/E – Price Earnings Ratio, Valores em Dezembro de cada ano, salvo outro mês referido; rácio ajustado ciclicamente)

1890: 14,4
1892: 18
1893: 15,6 – Crash
1901: 21,68 – Pico do virar de século
1903: 16,04
1907: 11,3 – Crash global; Início da 1ª Grande Recessão
1920: 4,7 – (Mínimo histórico)
1928: 25,3 – Início da “bolha”
Setembro 1929: 32,5 (pico da “bolha” dos anos 20)
Outubro 1929: 28,9 – Crash global; Início da Grande Depressão
Julho 1932: 5,8
1973: 13,4 – Choque petrolífero – Início de década de P/E abaixo de 10
1974: 8,2
1981: 7,8
1984: 9,5
1985: 11,6
1989: 17,6
1994: 19,9 – Início da “bolha” da Nova Economia
1997: 33
1998: 38,8
1999: 44,1 – (Máximo histórico) “Exuberância irracional” da Nova Economia
2000: 37,2 – Duplo Crash do Nasdaq em 11 de Março e 14 de Abril
2001: 30,5 – Crash do DJIA em 17 Setembro
2002: 30,5
2003: 26,6
2004: 27,1
2005: 26,4
2006: 27,2
2007: 25,9 (Pico do DJIA em 9 de Outubro)
2008: 15,37 – Crash global e pânico financeiro
2009: 20,32
Média histórica: 16,34

Fonte: Robert Shiller, sítio na web: http://www.irrationalexuberance.com/index.htm
Nota: O Price/Earnings Ratio (normalmente designado por P/E ou PER) é um indicador utilizado para analisar o valor de uma acção. Representa a relação entre o seu preço e os lucros da empresa. Quanto mais elevado mais “exuberante” é a valorização bolsista. Robert Shiller calculou o P/E das 500 empresas cotadas no NYSE, AMEX e NASDAQ do índice Standard and Poor’s.

Quadro II
Estrelas do Nasdaq
Empresa; Ano IPO; P/E; Capitalização de mercado ($mil milhões)

Amazon: 1997; 57,58 ; 52,24;
Yahoo: 1996; 36,92 ; 22,08;
Intel: 1971; 26,96; 115,24;
Google: 2004; 26,49 ; 171,95;
Cisco: 1990; 23,39 ; 139,51;
Oracle: 1986; 21,18 ; 121,87;
Apple: 1980; 19,64; 182,87;
Dell: 1988; 18,18; 26,36;
Microsoft: 1986; 15,85; 252,33;
eBay: 1998; 12,79; 30,34

Fonte: StreetAuthority.com