This post features video recordings of a lecture series by George Soros at the Central European University in Budapest, discussing capitalism versus an open society.

Part 1: Soros explores the “agency problem” and its impact on both markets and politics. The principal-agent problem, in which those who are to represent others tend to place their interests ahead of those they are supposed to represent, poses a risk to ethical considerations, and in Soros’s view undermines values necessary for the operation of an open society.

Click here or on the image below to view the video clip.

Part 2: He analyzes the agency problem inherent in the American political system. He believes the main culprit is a decline in public mortality which he says is fostered by the rise of market fundamentalism.

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I very much enjoyed this book review by Gerard DeGroot published in Sunday's Washington Post on Michael Meyer's new book on the fall of the Berlin Wall.  It never fails to impress me how much our ideas about this recent period in history continue to inform (or more aptly, misinform) our understanding of contemporary politics and relations with Russia and the states of the former Soviet Union.  Apparently Michael Meyer's book pokes some holes in the traditional hero myths, and points to the accidental and chaotic nature of how all these world-changing events spun out of control.  Very interesting and thoughtful stuff here.The events themselves were played out by a cast of thousands in Budapest, Berlin, Prague, Warsaw and Bucharest. There was no script; this was an improvisational drama conceived by Camus, with help from Kafka and Molière. The Soviet Union came ...

I will be in Slovenia next week as I am taking a group of South African business people on a fact-finding mission to this uber-beautiful country. I am leading the delegation in my capacity as Honorary Consul of Slovenia for South Africa. (Click here for the Consulate’s website, including photographs of some of the most beautiful spots in the world.)

If you happen to be in Ljubljana on Monday, September 7, let’s get together at a special day the Slovenian Chamber of Commerce and JAPTI have organized to facilitate interaction between our delegation and Slovenian business people. Numbers are filling up quickly, so please let me know as soon as possible if you are interested in joining us. You can reach me via the “Contact” button in the top-right hand corner of the Investment Postcards site.

Blog posting will be slow (and totally absent

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Before I left for my summer break in Greece I asked, among other things, whether Hungary was trying to escape original sin or more specifically (and implicitly) whether Hungary is using the current relatively favorable market environment to claw back control over monetary policy. Recent comments from central bank Deputy Governor Ferenc Karvalits suggest that this may very well be the case (quote below from Bloomberg);

Investors see Hungary becoming “significantly” less risky, allowing for further reductions in interest rates, central bank Deputy Governor Ferenc Karvalits said. “Over the past few months, international risk appetite has improved significantly, the risk assessment of the region and Hungary has stabilized, and this allows for further easing of monetary conditions,” Karvalits said in an interview on Kossuth Radio today.

The Magyar Nemzeti Bank lowered its benchmark interest rate by half

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A friend of mine sharply rebuked me the other day for not writing enough on my blog.  While I can assure you all I haven't exactly been napping in the recliner, I will do my best to start picking up the slack while still juggling my legal workload (which lately consists several sharp knives, a hot potato, a bowling ball, and a nuclear warhead - let's hope I don't drop anything).  To begin with, why not revisit one of my favorite subjects:  the murky machinations of Gazprom-related business in Hungary, where the goulash state corporatism and Russia's most cheerful barracks live on despite the ravages of the economic crisis.  Although much of this story is background for the initiated, ...

I will find myself in Slovenia and Switzerland over the next two weeks, taking a break and soaking up some Northern Hemisphere sun with my wife Isabel and two kids, Monique (10 years) and Jean (8 years).

Blog posting will be slow (and totally absent on some days) while I am on the road and “Words” from the Wise” will take a break for the next two Sundays (June 28 and July 5). The normal blogging service will be resumed on my return to Cape Town on July 11.

However, I will be “tweeting” regularly throughout my trip. For those not familiar with the concept, a Twitter feed has been added to the sidebar of Investment Postcards where I post short comments (maximum 140 characters) on topical market issues,

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There is a riveting business story posted at Asia Times Online by Roman Kupchinsky, taking a look at the removal of the allegedly shady RosUkrEnergo trading company - famous for its non-transparent middleman role selling gas between Turkmenistan, Ukraine, and Europe - only to be replaced by a new non-transparent middleman trading company, RosGas, also based in Zug, Switzerland.  Dmytro Firtash appears to have his name all over it.  If you have the patience for the details, this is quite a story.

Gazprom spokesman Sergey Kuprianov sharply contradicted the allegation that the company was linked to Rosgas: "It is well known that the only export channel for Russian gas is the company Gazprom Export. The company RosGas which was named today in the ...

... is getting increasingly difficult at the moment. Take Hungary for example. I take it that most economic commentators and analyst know that it is bad in Hungary and together with Ukraine I would submit that these two face the largest risk of sporting the next global macro blowout (assuming that Russia does not suddenly collapse prematurely).

Hungary's biggest problem at the moment is how on earth to stay worried about a dropping Forint while at the same time realizing that the country is headed towards the worst recession in several decades. As some readers will remember the reason that the Forint today is subjected to full force of currency punters is to be found one year ago. Back in February, Hungary as well as other emerging markets opted to loosen their pegs towards the USD, the Euro or both in an attempt to "allow" the currency to

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Well it's pretty clear to me at least that there is now one, and only one, major and outsanding topic towering head and shoulders above all those other pressing and important problems those of us following the EU economies currently find lying in our macro-policy in-trays: the issue of wage cuts. Not since the 1930s has the possibility of such a generalised reduction in wages and living standards loomed out there before policymakers, and doubly so if we now hit - as I fear we may well for reasons to be explained at the end of this post - systematic price deflation in a number of core European economies. br /br /The issue that has suddenly and even violently erupted onto the European macro horizon over the last week (as if we didn't already have sufficient problems to be getting on with) is, quite simply, how, if they either ...

The fact that Hungary's National Bank did not decide to make an unexpected interest rate cut at its meeting earlier this week seems to have a href="http://www.bloomberg.com/apps/news?pid=newsarchiveamp;sid=a84zp9hh0af0"surprised some/a, but it really should not have done. According to James Morsink, head of the IMF delegation to Budapest, Hungary only has room to cut its benchmark interest rate a href="http://www.bloomberg.com/apps/news?pid=newsarchiveamp;sid=aW.6Yo1wzmp4"at a “gradual and cautious” pace/a. The reasoning behind this view is simple, any more rapid reduction in the bank's benchmark rate risks being accompanied by a devaluation of the forint, and and any such devaluation would inevitably lead to a rise in mortgage defaults and problems for the banking system as holders of Swiss Franc forex loans find themselves unable to maintain their payments as unemployment rises and wages and salaries fall.br /br /Thus it is that even though the Hungarian economy is now in its worst recession in over a decade ...