This web page presents certain ideas from research by Wharton Partners. Wharton Partners is a specialized investment Research firm. We have been involved in doing research into the emerging markets for the past three years. This research has lead to what we feel is a unique perspective into the future of the world economy .
What makes some of our key research ideas interesting is that it is based on what we feel is a key problem in the very basics of economic theory. Since the end of 1996 we have felt that there has been a major oversight on part of economic experts and analysts regarding debt financing and economic liberalization. We have discovered systematic mistakes made by governments not taking into account the impact of economic and trade liberalization mixed with commercial banking type debt financing.
We believe we have discovered a key flaw in the world financial system. The flaw is what we call the breakdown of the principal refinance assumption. Our analysis of the Pakistani economy in 1996 convinced us that commercial bank debt financing, which is the general mode of debt financing in the emerging markets, will be completely disastrous in countries liberalizing their economies.
What we have seen is that most macro economic models and a lot of financial models assume the refinancing of debt. Our analysis shows that if debt cannot be rolled over or refinanced an unfair standard is placed on the borrower. This can have disastrous effects. We expect the crisis ridden Asean economies to show further wear and tear as they liberalize their economies under IMF and WTO conditionalaties. We saw that economic and financial experts trained primarily in the west were prone to overlooking this problem due to them assuming refinancing of debt and not really realizing the significance of the impact of a sudden breakdown of the principal refinance assumption.
On this web site we will post part of our research, a number of aspects of which, we feel very few people realize. We will generally present a point of view which we think is unique and significantly new so as to be useful to the reader. We strongly believe not to waste the precious time of the reader with information available through other means.