Top Value Hedge Fund in Spain “There is no “solution” to the European crisis”

Top Value Hedge Fund in Spain “There is no “solution” to the European crisis”

Comments on the last quarter:

As in most of 2011, “macro” issues overwhelmed the last quarter: although the US and Chinese economies are probably doing better than most people expected just a few months ago, the “noise” emanating from Europe has dominated financial markets. We are not going to bore our readers with yet more analyses and predictions regarding the Euro saga. As we said in 2007, this is a “balance sheet” recession created by an excess of debt in developed markets, which take many years to clear up. There is no “solution” to the European crisis: new mechanisms will evolve over time and slow adjustments will eventually bring European econo-mies to normal rates of growth – which will probably be somewhat lower than in the past for demographic reasons. The core Euro zone problem is not “excessive spending” by some countries’ governments (Greece being an exception) but a crisis of payment arising from the very different productivity evolution in the different countries. This difference in productivity creates permanent imbalances between intra-European exporters (basically Germany) and intra-European importers (mostly the rest). In a large, closed economy, which the Euro Zone has become, these imbalances will take many, many years to correct: it was easy to devalue the lira overnight, but it took ten years (1997-2007) to lower German labor costs to their current competitive position

Full Letter Embedded Below:

Here’s what Charlie Munger had to say at the Daily Journal meeting

Charlie MungerCharlie Munger spoke at the Daily Journal Corporation's Annual Meeting of Shareholders today. Although Warren Buffett is the more well-known Berkshire Hathaway chief, Munger has been at his side through much of his investing career. Q4 2020 hedge fund letters, conferences and more Charlie Munger's speech at the Daily Journal meeting was live-streamed on Yahoo Read More

201112 LTIF Newsletter


ValueWalk Premium Subscription Includes:

  • 3 Write-ups per month (EXCLUSIVE content that you won’t find anywhere else)
  • Personal Track Record from Jacob’s Brokerage
  • Any question you have answered within 48 hours
Top Value Hedge Fund in Spain "There is no “solution” to the European crisis"

No posts to display