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The physics of finance according to the investor with a double Italian-British passport, patron of the activist fund Algebris: “Negative rates have eliminated time: short and long do nothing”
by Simone Filippetti
The physics of finance according to the investor with a double Italian-British passport, patron of the activist fund Algebris: “Negative rates have eliminated time: short and long do nothing”
4 ‘reading
On the private bus that brings guests and delegates from the hills of Certosa di Pontignano, the annual Think Tank of the British Embassy and the British Council, in the center of Siena, Davide Serra, in an elegant blue suit, is a flooded river, a regret the day. of debates and conferences: its objective is the Citizenship Income, the workhorse of the M5S, which in its “screeches” changes the name of “Penal Rent”. Serra, 50, landed in London in the mid-90s, a very young banker hired by UBS, remains today the most politically exposed investor in Italy: his proximity to Matteo Renzi is well known; His civic commitment to Italy, including as a naturalized British citizen, also earned him the nomination as Commendatore by former President of the Republic Giorgio Napolitano. And around Milan, the sides of historic wooden trams bear the “brand” of Algebris, the investment fund founded by Serra in 2006 and made famous by its activist battles for Generali and Mediobanca. Serra, who manages 12,000 million euros in investments, does not usually grant interviews. “I think they do more damage than anything else”, but since the promise is to only talk about markets, finance and leave politics out of the door, the Ligurian businessman takes stock with The sun 24 hours.
Will the second wave of Covid knock out the markets, panicking again like in March?
The big difference is between equities and fixed income. The global capitalization today reaches 85 trillion dollars; that of bonds is 55 trillion. World GDP is also 85 trillion: world stock markets are worth 1 to 1 GDP. But now with the recession between 5 and 7 billion will be lost. Central banks, governments and international organizations have put about 20 trillion trillion, 25% of GDP, on the plate. The monetary / tax and guarantee charge is 4 times the estimated losses.
Are you saying they have contributed more than necessary?
No, the strange thing was that with a pandemic and a recession just around the corner, the global stock markets rose. The authorities have done well to provide so much help: the danger of non-compliance for many companies, and even small nations, is real. If that happened, the entire global tax base would collapse with devastating consequences. Credit is owed to central banks and the G10 for containing the tsunami.
