mercoledì 14 agosto 2013

Who controls the world economy?


NB. Original Powerpoint can be found here.

Debt and interest rates

Do the finance ministers control the economy?

Hon. Giulio Tremonti 

Former Italian Finance minister (1994–1995, 2001–2004, 2005–2006, 2008–2011)
Debts (nearly) 2000 B€
Revenue (about) 800 B€
Expenses 870 B€
The books have always been losing for the past 20 years.
Problem: come rinnovare il debito di 20-30 B€ che scade ogni mese


Hon. Mario Monti

Former Italian Finance minister (2011–2013)
Debts (nearly) 2000 B€
Revenue (about) 800 B€
Expenses 870 B€
The minister in charge of the treasury may have changed, but the problems are the same.

So who controls the economy?

Larry Fink

As of March 31, 2011, BlackRock's assets under management total 3650 B$ across equity, fixed income, cash management, alternative investment, real estate and advisory strategies. Investment system services to a broad base of clients with portfolios totalling approximately 10000 B$
As of September 30, 2011, BlackRock's assets under management total US$3.345 trillion across equity, fixed income, cash management, alternative investment, real estate and advisory strategies. Through BlackRock Solutions® — the natural evolution of our long-standing investment in developing sophisticated and highly integrated systems — we offer risk management, strategic advisory and enterprise investment system services to a broad base of clients with portfolios totaling approximately US$10 trillion.

Bill Gross

For 25 years he was the charismatic boss of Pimco. He is one of the best asset managers.

Power Holders

It is clear therefore that the power holders are not the governments, but the top asset managers,

Rank Manager Country Total Assets
1 BlackRock USA $3,346,256
2 State Street Global US $1,911,240
3 Allianz Group Germany $1,859,351
4 Fidelity Investments USA $1,699,106
5 Vanguard Group USA $1,509,119
6 AXA Group France $1,453,285
7 BNP Paribas France $1,326,730
8 Deutsche Bank Germany $1,261,234
9 J.P. Morgan Chase USA $1,252,915
10 Capital Group USA $1,179,695

World's largest asset managers Total Assets managed by country




The expiration of Italian bonds  Total Assets managed by country
It's worth noting that there is a jump from a 137B€ debt expriring in 2011 to nearly 270 B€ in 2012. The only hope is that the global economy won't leave Italy behind.
In the past 10 years Italy's GDP has barely grown at all. In fact, when stating a ~2% increase in 10 years, one should take into account population growth and that in those years a considerable amount of public debt was underwritten by foreign investors — about 600B€.