Marshall Auerback

Director of Institutional Partnerships
Institute for New Economic Thinking

Auerback has over 20 years of experience in the investment management business. He served as a director and global portfolio strategist for the Canada-based fund management group Pinetree Capital. He also was head of economic research for Madison Street Partners, a Denver-based investment management group, and he worked as an economic consultant to PIMCO, the world’s largest bond fund management group.  In addition, Auerback is a Research Associate at the Levy Economics Institute of Bard College and a Research Fellow for the Economists for Peace and Security. (http://www.epsusa.org)

Previously, Auerback managed the Prudent Global Fixed Income Fund for David W. Tice & Associates and assisted with the management of the Prudent Bear Fund. He also worked as an international economics strategist for Veneroso Associates, which provided macroeconomic strategy to a number of leading institutional investors. Prior to that, Auerback ran an emerging markets fund for Tiedemann Investment Group in New York. He began his finance career as an investment manager at GT Management, focusing on the markets of Japan, Australia, and the Pacific Rim, while based in Hong Kong and then Tokyo.

Auerback graduated magna cum laude from Queen’s University in Canada and received a post-graduate masters degree from Oxford University.  .

My Content

Today is the day. Today the world will learn the definitive answer as to whether Scotland will remain a part of the United Kingdom or launch the first step toward independence. The most recent polls seem to indicate a narrow margin of victory for the No side, but it's too close to call, especially given the huge turnout and the size of the youth vote (16 is the voting age minimum for the referendum.)
Alex Salmond, leader of Scotland's independence party and the nation’s First Minister, continues to dig his heels over the question of what currency an independent Scotland would use.  Following a debate in Scotland last week in which he was consistently challenged on the point, Salmond continued to insist that there was "no Plan B," and that nothing could stop a newly independent Scotland from continuing its use of the pound.
A showdown has taken place within Italy’s governing coalition. Events are still unfolding, but the center-left Democratic leadership has given an explicit thumbs-down to the current government, and former Prime Minister Enrico Letta has resigned.   Matteo Renzi, the leader of Italy’s Democrats, says that he hopes to have his new government ready this weekend after nearly two days of talks with all of Italy’s political parties, and expects to form a coalition largely based on the same left-right alliance that previously supported Letta.
Bubbles have become a major focus of discussion in today's financial markets. But very few people actually define what they mean when describing this financial phenomenon.   In a recent Harvard Business Review blog post, Markus Brunnermeier, an economist at Princeton University and a member of the Institute for New Economic Thinking’s Advisory Board, had a go at it. Brunnermeier defines the leading characteristics of bubbles thusly: "Bubbles are typically associated with dramatic asset price increases followed by a collapse. Bubbles arise if the price exceeds the asset’s fundamental value."
The global financial crisis of 2008 created the worst recession in the developed world since the Great Depression. Governments had to respond decisively on a large scale to contain the destructive impact of a massive debt deflation. Still, large financial institutions such as American International Group, Bear Stearns, Lehman Brothers, Countrywide Financial, Washington Mutual, Wachovia, Northern Rock, and Landsbanki collapsed. Thousands of small-to-medium financial institutions failed or needed to be rescued. Millions of households lost their retirement savings, jobs, houses, and communities. And numerous non-financial businesses closed.

My Video Content

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Canada has long received credit for its economic turnaround under the stewardship of Paul Martin, the country’s former prime minister and finance minister.  
 
In general, Martin has received justifiable plaudits but often for the wrong thing. Canada’s “fiscal austerity expansion,” which was praised by deficit hawks around the world, only succeeded because the country had, and still has, a free-floating exchange rate. As a result, the Canadian dollar dropped sharply in the mid-1990s, facilitating a huge turnaround in the country’s trade account and thereby offsetting the fiscal austerity embraced by the government at that time.
 
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Bill Black knows banks. 
 
As a federal litigator in the late 1980s, Black played a central role in prosecuting the corruption responsible for the savings and loan crisis of the late 1980s. Since then he’s become one of America's top experts on financial fraud, which he see as endemic to the modern financial system. 
 
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The United States’ deep political polarization is blinding the nation from seeing what it takes to create an effective innovation economy.
 
Simply put, to many figures on the political right the government is simply a source of corruption and inefficiency, and it’s most effective means of handling innovation is to leave markets to their own devices. The political left, on the other hand, typically retorts that state intervention is necessary for economies to generate innovation because the government is the only entity positioned to mobilize national resources for broader public purposes.
 
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Is there a role for the state in fostering innovation?  
 
The usual caricature of government involvement in business, which has become especially prominent in the last 40 years, can be seen in the classic American aphorism: “The government that governs least, governs best.”  Admittedly, it’s a nice, pithy expression. And it has gained a powerful following among policymakers starting in the Reagan years. 
 
But is it true? 
 
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The European project, which was designed to bring lasting peace to the continent, is under threat. 
 
How? 
 
Through the insistence of elites that a common currency should be imposed, but under conditions that would make such a currency unviable.