Oct 01

Dr. Pippa Malmgreen:

Dr. Philippa Malmgren is the President and founder of Principalis Asset Management, a financial firm based in London. In short, she helps fund managers better understand how politics, policy and geopolitics will impact the financial markets. Investors use her insights to manage their portfolios more profitably. Her clients include many investment banks, fund managers and hedge funds as well as Sovereign Wealth Funds, pension funds and corporations. She founded the Canonbury Symposia, which brings together high level experts on strategic security, defense and intelligence matters to meet with experts from the financial markets.

She is a frequent guest on the BBC’s Today Program, Newsnight, a guest presenter on CNBC’s Squawk Box (UK) and is a speaker at conferences. She has a column on the markets in Investment Week and has written for The International Economy, International Fund Investment Magazine and Institutional Investor Magazine. Dr. Malmgren has been a visiting lecturer at Tsinghua University in Beijing and an occasional lecturer for the Duke Fuqua Global Executive MBA Program.

She serves on the International Advisory Board for the School of Oriental and African Studies in London and Indiana University School of Public and Environmental Affairs. She is a Governor of the Ditchley Foundation in the UK.

She served as financial market advisor in the White House and on the National Economic Council from 2001-2002, where she was responsible for financial market issues. She founded Malmgren and Company, in London, England on 2000 and was previously the Deputy Head of Global Strategy at UBS and the Chief Currency Strategist for Bankers Trust. She headed the Global Investment Management business for Bankers Trust in Asia. She has a B.A. from Mount Vernon College and an M.Sc. and Ph.D. from the London School of Economics. She completed the Harvard Program on National Security. The World Economic Forum named Dr. Malmgren a Global Leader for Tomorrow in 2000. She is also a member of the Council on Foreign Relations, Chatham House, the Economic Club of New York and the Institute for International Strategic Security.

September 2011 Policy & Markets (Dr. Pippa Malmgreen, Sep. 13, 2011):

News to expect in the coming days and weeks:

  • Greece defaults
  • Germany protects German banks but other countries cannot do the same thus quickly provoking multiple sovereign defaults and or bank failures, all of which may easily lead to a payments crisis in the global banking system. Derivatives are particularly at risk in terms of operation and execution.
  • The Euro falls in value especially against the US dollar
  • The Germans announce they are re-introducing the Deutschmark. They have already ordered the new currency and asked that the printers hurry up.
  • The Euro falls even more on any news that Germany is withdrawing from the Euro.
  • Legal wrangling begins as to the legality of Germany’s decision. Resolution takes years.
  • Germany insists that the Euro continues to exist even they do not use it any longer. They emphasize that European unification will continue and suggest new legal instruments to strengthen European Unification including new EU Treaties.

The markets are focused on the imminent default by Greece. But, this is not the most important issue now. The historic development the markets have not priced in as that Germany is preparing to exit the Euro. The markets are very likely to have to contend with the re-introduction of Deutsche Marks in the near future. This is bound to mean a collapse in the value of the Euro for those countries that will remain in it (devaluation for the rest of Europe). This step may seem unthinkable but, I believe that the German government is telling us in multiple ways that there is no other solution from their point of view. It is also why you will hear various policymakers at the G7 meeting his weekend echo Christine Lagard’s comment that the world economy is entering a “dangerous new phase.”[i] This was certainly the atmosphere at Jackson Hole where policymakers openly talked about entering a period of history where we would face challenges beyond the scope of anything we have seen in our careers. Continue reading »

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