Practical analysis for investment professionals 
There continue to be growing signs of a credit bubble manifesting around the globe. In the United States, it appears that credit quality is starting to slip as banks are becoming more friendly to lower credit borrows. In private equity, Blackstone sees an “epic” credit bubble. Real estate in China appears to be frothy. And, with the Federal Reserve presently unable to unwind easing, these bubbles could and should grow in magnitude materially. Read more
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It may seem an odd question, but can financial engineering cure cancer? No less an intellectual light than Andrew W. Lo of MIT thinks financial engineering is a possibly potent weapon to aid in the ages old pursuit for a cancer cure. Read more
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US investors are celebrating Thanksgiving this week, and the soaring stock market continues to serve nothing but humble pie to the thinning ranks of market bears. Hedge fund manager Hugh Hendry was the latest high profile investor to capitulate, recently advising, “I may be providing a public utility here, as the last bear to capitulate. You are well within your rights to say ‘sell.’” Indeed, we may see cautious investors look to secure some of their gains in the closing weeks of the year, but the trend for now remains positive. Read more
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A recent report co-authored by HSBC and the Climate Bonds Initiative, entitled “Bonds and Climate Change: The State of the Market in 2013,” is a strong indication that climate bonds are coming into their own. Read more
Leave a CommentThere continue to be growing signs of a credit bubble manifesting around the globe. In the United States, it appears that credit quality is starting to slip as banks are becoming more friendly to lower credit borrows. In private equity, Blackstone sees an “epic” credit bubble. Real estate in China appears to be frothy. And, with the Federal Reserve presently unable to unwind easing, these bubbles could and should grow in magnitude materially. Read more
Leave a Comment Escalating tensions in the Middle East and concerns about rising interest rates dampened the mood for equity investors in August, causing most global stock markets to lose ground during the month. In the month ahead, there will likely be no shortage of market-moving headlines. Besides the risk of military conflict in Syria, elections in Germany, and budget battles in the United States, investors are sure to be focused on the health of the economy and central bank policy. With September historically the worst month for equities, the resiliency of the market could very well be tested. Read more
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In the United States, there are some big misconceptions among politicians, the media, and the public about reliance on Middle East oil, according to Anne Korin, co-director of the Institute for the Analysis of Global Security. Case in point: Recent oil and natural gas discoveries in North America have led US policymakers to mistakenly think this is the solution to all of our problems — that we will no longer be reliant on imports and oil prices will come down. Unfortunately, this is far from reality; prices will continue to be driven by OPEC unless we change factors first on the demand side. Read more
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In the second quarter of 2013, institutional investors added to their equity holdings in the financial sector while reducing their exposure to energy stocks. Among the most widely held stocks, portfolio managers as a group added to positions in Microsoft, General Motors, Cisco, and Intel, and trimmed positions in Pfizer, Oracle, General Electric, and AT&T. Read more
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Second quarter earnings reporting season is wrapping up and companies so far have delivered the goods, or at least met the diminished expectations of investors. Most major stock indices in Europe and the US surged higher in July, but the enthusiasm for stocks may have had more to do with the dovish policies of central bankers than company fundamentals. And recent indications from US Federal Reserve officials that a tapering of their easy money program may come this fall should be cause for concern. Read more
Leave a CommentJim Leech, president and chief executive officer at Ontario Teachers’ Pension Plan, discusses the state of the pension fund industry and how his fund’s unique investing approach and governance style have enabled it to capitalize on opportunities and avoid some of the troubles the industry currently faces. Read more
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