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David Ryder's avatar

Dean — the "Last Open Channel" piece is the sharpest thing I've read on this election, financial or otherwise. The two-ledger framework and the itemised second ledger are exactly what Bloomberg, CNBC, and the Economist's own coverage this week are missing — they're running the dashboard as the whole story and treating the crackdown as someone else's beat.

One pushback on the instrument, not the argument. The X/WhatsApp poll asks respondents to rank macro stability, jobs, and freedoms as if they're substitutes competing for a single vote. But governance isn't a rival good to economics — it's the foundation the economics sits on. Diffusion, anti-diversion, and durable credit transmission (your own Ledger One debit entries) don't fail despite good governance; they fail because the upward channel that would surface where they're failing has been narrowed. A single-select ranking can only ever return a trade-off-shaped answer, because that's the only shape of answer the question allows. It can't distinguish "I want economics more than governance" from "I understand governance produces the economics I want." I think this is close to Mundubile's actual argument, whatever the credibility problems with the messenger: not that rights matter more than growth, but that this growth is unbanked without them.

Which is the question I'd put back to you, because it's the one the piece stops just short of: does this extend to sovereign credit itself? Bloomberg's own EM political-risk beat (Turkey, Colombia, Bolivia) treats court capture and opposition suppression as bond-moving events because a state willing to bypass its own legal process is, definitionally, a state whose contractual commitments carry more counterparty risk, restructuring agreements included.

Your piece flags the corruption reversal and the FRA quasi-fiscal drift as things the IMF itself now watches, but doesn't close the loop to ask whether the same governance narrowing that produces those numbers should itself be priced into the credit spread not as a separate ESG overlay, but as the mechanism by which "94 per cent of the debt perimeter restructured" holds or doesn't over the life of the paper. If the upward channel is what would have caught the arrears under-disclosure before 2020, what's the honest answer to whether investors in the 36-per-cent rally are pricing a repair, or pricing a promise from a state that's simultaneously demonstrating it can suppress the exact feedback mechanism that would tell them if the promise breaks?

Curious where Part 2 lands on this once the count is in.

— David

Chisanga's avatar

Fair analysis

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