David Schawel, CFA, is a portfolio manager for New River Investments in the Raleigh/Durham, North Carolina area. Previously, he managed a $2-billion fixed-income portfolio for Square 1 Financial, which he joined in 2008.
In the current low-rate environment, there is reason to wonder about the viability of banks, insurance companies, and indeed any institution that generally depends on the spread between long- and short-dated liabilities for its profits, says David Schawel, CFA.
There are ominous things happening in the credit markets, and investors are becoming increasingly concerned.
Many investors are waiting for America's housing market to rebound, but it may have already — if you look at multifamily housing.
The Federal Reserve can keep their balance sheet at the current size (and keep the risk asset party going) or they can position themselves to be able to hike rates, but they cannot do both. An analysis of the tools that they have at their disposal.
As interest rates keep falling and leverage starts rising, risks remain the same.
What is the purpose of the Fed raising interest rates? Do rates necessarily need to be hiked because the unemployment rate has fallen to a certain percentage? There answer here is no,
Retail investors are pouring money into bank loan funds at a record pace. Unfortunately, the prospective returns given the factors mentioned here, as well as the marginally worse credit structures, leave investors vulnerable to interest rate and credit risk that they do not realize exists.
While the stock market continues to hit new highs, many would still agree that this recovery isn’t being felt by everyone. However, here are four reasons to be more positive.
This is a bull case for the equity in a subprime lender formerly owned by AIG. The author contends that the company may be in for a bright future due a confluence of factors that would have seemed unlikely just a few months ago, including the return of the asset-backed securities (ABS) market and the credit quality of subprime borrowers. As you read, imagine how you would have reacted to these same words written just a few years ago.
Value in the fixed-income markets, as in other asset classes, is driven in large part by fear and greed.
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