The politics of markets
Avinash Persaud used to believe that
foreign exchange markets were
simply an equation to solve,
but later learned a far more
valuable lesson: politics
plays the biggest role of all
BY: AVINASH PERSAUD
I
entered the City 20 years ago with the over-confi dence of a exchange and commodity research at
young fi nance and economics graduate, and I was convinced JPMorgan, and later as an investor taking
then that while equity markets could be a little unruly, foreign exchange positions.
markets were merely an equation to solve. I learned quickly Foreign exchange is the most political of
that the equations were an important starting point, but generally, all fi nancial instruments and it is easy to see
the modern study of fi nance and economics put too much faith in why. It is possible for all investors in equity,
equations and neglected the political science root of economics. bond and property markets to think that
Th e joy of fi nance is that you never stop learning, but I they have gained in absolute terms and to
probably learned the most when I was global head of foreign feel wealthier – even when some have
36 SUMMER 2009
36-3836-38 political markets.indd 36political markets.indd 36 1/6/091/6/09 11:58:4711:58:47Professional Investor Summer 09.38 38 4/6/09 15:41:00
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76