“I always thought of economics as a quantitative field and when I hear people talk about why this is the right thing to do, they say things like ‘we really need to go big’, or ‘the ‘09 stimulus was too small’” - Larry Summers

**Editor’s note: we fat-fingered the send button during editing this AM; this one may be rough around the edges**

IATROGENIC VOLATILITY.

“Iatrogenic illness is when you go into a hospital and you catch an infection there. Iatrogenic volatility is when policymakers, whose role is to stabilise markets, destabilise them with their actions. I think there is a risk of that taking place” - Larry Summers

As part of the FT’s Economists Exchange series, Martin Wolf interviewed Larry Summers (yesterday).

Summers shocked us - he pulled no punches:

“Today’s situation is a bit like the 1960s. It was then hoped that the laws of economic arithmetic could be suspended and that it would all work out. That experiment didn’t work out well for Lyndon Johnson, economically, and it didn’t work out well for the Democratic party” - Summers

Before continuing - we recommend reading the entirety of Martin Wolf’s interview.

OK - back to what Summers said.

It’s not that his words were especially profound.

It’s that they were as directly critical as could be, while remaining - to an extent - polite.

Still, Summers intentionally broke party ranks.

For almost 5yrs, financial speculators have been calling for “financial / asset bubbles” to pop.

Many will read into this interview, seeing another harbinger of such an event.

As we read (and reread) this interview, thoughts of cyclical political-economic concerns surfaced:

• Unproductive government spending

• An increasing welfare state

• Inflation

At a time when the world is now economically competitive w/ the US, can the US (or an economy), really afford this kind of structural slippage?

Hopefully, it doesn’t come to that & the dissent is heeded -

OTHER NEWS.

BaFin (the German equivalent of the SEC) is facing a criminal probe over its handling of the Wirecard fiasco. It’s refreshing to see prosecutors take allegations of regulatory abuse seriously.

• On inflation & the base effect

• Another excellent Paul Graham essay

• US SPACs raise more than US PE in Q1

• On regional US Base Declines

• Diamondback’s revised guidance

• A little drama for Argentina's Vaca Muerta

• Russia is going for 25% of the hydrogen trade

• Total | Uganda | Kenya (finally) sign key agreements for the Lake Albert project

That’s it for this week - tonight, PSG plays Bayern in the Champions League (this one is too close for us to bet) - catch y’all next week -