After the huge global macro fund Caxton Associates hired a new economist, there was some question about what would happen with their chief economist John Makin.Caxton’s new economist, Sushil Wadhwani is an all-star. Does Caxton’s hiring him mean that Makin is out?
We’re not sure, but when Makin was recently on Bloomberg (April 18th), he was cited only as a member of AEI. Whether or not he is still Caxton’s chief economist was not mentioned.
But rather than speculate about Makin’s role at Caxton, let’s take a look at Makin’s current thoughts on the economy, because Caxton clearly wants diversification from his thought process at the very least.
On Bloomberg April 18th, he spoke about how the S&P downgrade was a good thing, because “otherwise, we’ll have higher interest rates when we need to do a lot of borrowing.”
And on the debt ceiling, he said: “There’s nothing to be gained from stringing out a debt problem, my guess is that by the time we get to May, the outlines of a deal to raise the debt ceiling will begin to become clear.”
And thanks to a tipster who sent it to us, we know that he also recently wrote a paper for Caxton titled, “Is America the next Japan?”
He wrote in the paper:
How bad is the U.S. government outlook going forward and how does it compare with Japan’sdebt prospects? Probably the best metric to employ when addressing this question is the ratio of net government debt-to-GDP, which approximates the public’s holdings of government debt exclusive of debt owned essentially by the government itself either in Japan’s postal savings system or in the United States Social Security account. Gross debt measures are more alarming but using net debtmeasures that compare across countries is probably the soundest way to proceed. Few of the conclusions reached using net debt figures would be altered by using gross debt figures save for thefact that the headline numbers would be more alarming for both countries, the United States and Japan.
Wadhwani will bring a new perspective to Caxton.