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Home » Blogs » Ken MacFadyen

Mastering the Flop

By Ken MacFadyen, MU Blog

June 15, 2010

When you look at the problems in Europe, it's hard not to notice some similarities here in the US.

The sovereign debt crisis, domestically, is taking the form of distressed municipalities, as a handful of cities, such as Detroit, Harrisburg, Penn. and others have had their municipal debt lowered to junk status. Last month, Central Falls, R.I., went into receivership after it was deemed 'insolvent' by city leaders.

Then you have the demographics. Like Europe, the US has an aging population base, our social costs are climbing, and it's going to be years before our government gets out from under the still-growing deficit.

I had the chance to talk to Cartesian Capital's Peter Yu recently for a Q&A that will appear in the July issue of the magazine. Yu, whose firm focuses on emerging markets, is bearish on Europe for all of the reasons cited above. He is, however, a believer that the US will bounce back.

"Culturally, there is a long track record of re-invention domestically. The US is essentially a 'don't count me out' economy," he said, while also pointing to the scale of market and the dollar's role as the reserve currency of choice.

Proof can be found watching the World Cup and the NBA Finals. Whether it's the Laker's Pau Gasol or Germany's Bastian Schweinsteiger, Europeans have apparently mastered the flop.

In the business world, though, the flop takes the form of over-reactive lawmakers. The EU's proposed Alternative Investment Fund Managers Directive, for instance, could effectively bar US firms from marketing new funds in Europe, in addition to other measures. We'll find out tomorrow whether or not the directive moves forward, but Pau Gasol would be proud.

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2 Comments

We don't want to follow Europe true we might have some simalarities but ther ahead of us this gives us reasun to make sure we don,t follow them down the toilet with the Elections coming up in november.

Posted by: Eugene M | June 15, 2010 1:43 PM

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We don't want to follow Europe true we might have some simalarities but ther ahead of us this gives us reasun to make sure we don,t follow them down the toilet with the Elections coming up in november.

Posted by: Eugene M | June 15, 2010 1:42 PM

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