Jonathan Guthrie, an experienced finance journalist with 37 years of expertise, shares lessons learned in financial journalism, the role of chief executives in large businesses, and the limitations of stock analysts. The hosts also discuss the importance of native predators and express skepticism towards ESG-based investing.
Economic crises accelerate existing trends in various sectors.
Individual incentives in the financial industry can contribute to market instability.
Deep dives
Lesson from Economic Crises: Acceleration of Existing Trends
Historically, economic crises, like the pandemic, have shown that they tend to accelerate existing trends. These crises act as catalysts that propel ongoing developments in various sectors.
Individual Incentives and Market Instability
One observation made in the podcast is that individual incentives within the financial industry can contribute to market instability. The focus on short-term gains, such as year-end bonuses tied to asset price inflation, can create a situation where lessons from the past are not learned, leading to recurring crises.
Understanding Big Banks as Quasi Public Franchises
The podcast suggests that big banks are not conventional businesses but rather quasi public franchises with significant state guarantees funded by private capital. This unique status, combined with complex business models and reliance on governments and central banks, can impact their stability and investor perceptions.
Jonathan Guthrie has been covering finance for 37 years. Today on the show, he talks with hosts Ethan Wu and Robert Armstrong about what he’s learnt, covering everything from market collapses to investing in banks. Also, we go long the return of the European otter.