From 600+ conversations with the world’s leading thinkers.
What we have seen here is a pseudo-nuclear war. An unwind of misused financial instruments created a huge economic shock- which will fundamentally change the next quarter century of our economic story.
We are living through a profound era where speculative failure is simply not an option, and is fought tooth and nail by the government. This is a trap. Here I am the fool looking to fail frequently.
I often pose a critical question to businesses: if the economy began transitioning towards sustainability, would this be a boon or a bane for your business? If it's perceived as a threat, your paramount priority should be to modify your business model until this transition becomes an opportunity.
What crises actually do is expose the underlying fragility and structural flaws within an economy and society. Some of this is endemic – financial markets are fragile because they are giant pools of sentiment and leverage at their heart.
Investors who previously thought that sovereigns were a quasi-risk-free asset have been challenged in that respect. Domestic local-currency sovereign debt is certainly not risk-free. It very much depends on the willingness and ability of the sovereign to pay-back its debt!
Status often has what's called an accumulative advantage property. If you get just a little bit of a head start, you can end up racing far ahead. So you end up with very small differences in quality or merit that get amplified over careers or competitions, eventually becoming very large differences over time.
Uncertainty and fear are enemies of economic growth. To change motivation, it is important to give hope and make people believe. But also to give concrete results. It is important to value the positive instead of only highlighting the worst.
The public markets have slowly but surely become hostile to the small growth companies. Where the public markets used to serve any type of company, they are now only beneficial to companies in excess of a $1 billion market-cap. Sub $1 billion companies really don't have a place to turn for funding, growth and liquidity.
It's really complicated to work-out how much of our wealth came from empire, it's like trying to take the egg out of a baked cake. It's better to look at individual wealth and businesses.
Not all financial contracts are created equal. We should not assume that there is one single benchmark for all types of financial transactions. There are certain transactions that should be based on market rates, and others which call for the kind of benchmark that LIBOR provides.
If I may return to the biology analogy too; human beings get a lot of benefit from walking erect, but our backs and our feet are sometimes sore because we are made of parts that were put together before we could walk erect.
In our part of the world, there will always be some kind of uncertainty. The market accepts and endorses that our physical oil is delivered outside The Strait of Hormuz, we're also not subject to any destination restrictions as Oman is not part of OPEC.