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09-11-12-Macro Analytics – Marginal Return – Charles Hugh Smith

When risk factored returns are examined around the world, there is a very evident pattern. Without the application of excessive leverage, returns are consistently seen to be wanting. Unrecognized, ignored or ineffectively hedged risk is being increasingly being assumed to achieve marginal returns.

Moral Hazard and Unintended Consequences due to Monetary Malpractice has left the world with dysfunctional financial markets that are now broadly mis-priced and overwhelmingly in the Austrian camp of mal-investments, which leaves them exposed to a market clearing event that will reset the value equation. Insolvency is running rampant, but hidden by regualtory forebearance, archaic balance sheet accounting and the shear fear of contagion associated with almost any major bankruptsy.

Charles Hugh Smith and Gordon T Long discuss the underlying issues, liquidity versus solveny and how a moral malady has become interwined with current monetary malpractice.

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Charles Hugh Smith
At readers' request, I've prepared a biography. I am not confident this is the right length or has the desired information; the whole project veers uncomfortably close to PR. On the other hand, who wants to read a boring bio? I am reminded of the "Peanuts" comic character Lucy, who once issued this terse biographical summary: "A man was born, he lived, he died." All undoubtedly true, but somewhat lacking in narrative.
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