Simon Hu is an independent economist who developed the revolutionary GC economics. The intellectual seed of GC economics was conceived during the 2007 subprime crisis and 2008 financial crisis while Simon was a senior director at Fitch Ratings Asia based in Singapore. Having witnessed the rapidly widening rating notching between many issuers’ credit ratings and CDS implied ratings, such as that of Lehman Brothers and American International Group, he developed an innovative rating methodology during 2009 called Joint Analysis of Credit Ratings and CDS Implied Ratings, which was the Rosetta stone of GC economics.
Having realized in 2010 that the convergence of the credit rating and audit practices would redraw the future landscape of financial reporting and neither the Big Three credit rating agencies nor the Big Four audit firms were ready to embrace the radical departure of his research from traditional schools of thoughts, Simon resigned from Fitch Ratings Asia and retuned home in New Jersey in October 2010 to undertake an independent research project for an alternative rating methodology.
Simon published his first article entitled “Convergence of Audit and Credit Rating: Going Concern Ratings” in the November 2011 issue of the International Journal of Disclosure and Governance, and the second article entitled “Going Concern Rating and Economic Analysis of Insolvency Risk’ in the October 2012 issue of the Global Association of Risk Professionals (“GARP”). While the first article explored a conjectural framework of going concern ratings, the second article defined the conceptual framework of the new rating methodology.
Simon continued his cognitive discovery and eventually in 2016 what had begun initially as rating methodology research became a comprehensive research project for a new school of political economy consisting of triple-entry accounting, the valuation solvency test, going concern rating, insolvency risk discounted valuation, alternative legal discovery of dynamic economic damages in hybrid political-economic-legal-social conflicts among competing stakeholders represented by competing legal regimes whose relative ranking orders are poorly defined and a new currency called ranval (rated national valuation).
As going concern rating is cognitive discovery on a rating scale of incremental insolvency risks for going concern economic entities, be they governments or corporations, and how the incremental insolvency risks would be allocated fairly among competing stakeholders, such as voters/creditors/pensioners/businesses/governments or shareholders/bondholders/management/counterparties/employees, the new rating methodology would fundamentally redefine valuation discovery in fair value accounting, electoral discovery in politics, legal discovery in litigation and ultimately at the highest level, monetary discovery of currency valuation in the global currency market.
Simon firmly believes that GC Economics would effectively resolve the current global economic malaise and political mayhems. To this end, he is advocating a complete overhaul of the economic calculus, politics, philosophy and jurisprudence of the public and corporate governance models by incorporating GC Economics into the U.S. Constitution.