Charlie Callan.

Click here for a print friendly version. This report was originally published for clients on 11 September 2024. Last call on A$ AT1 On Tuesday 10 September 2024, APRA announced its long awaited proposed changes on a more effective capital framework for a financial crisis. It is a gutsy document that tears up the playbook on bank regulatory capital funding. [...]

Click here for a print friendly version. This report was originally published for clients on 14 November 2023. Watching grass grow Economies are large and slow moving. Like a supertanker, the enormous mass creates inertia, even at slow speeds, which makes changing course torturously slow. This has been forgotten due to the recency bias of the economics of sudden stops [...]

Click here for a print friendly version. What do cheese and hybrids have in common? There are many varieties of cheese. Some cheeses have holes in them, some do not. There are also many varieties of hybrids, some of these also have holes in them, as Credit Suisse noteholders have found out. We draw this analogy out further below, inspecting [...]

Many can recall the famous words of Paul Keating (PJK) in 1990 and cold comfort were they to households at the time. The RBA yesterday provided a parallel of icy resolve, this time to financial markets – with the implication being the same: crush inflation by inducing a recession. Rates – PJK: “Because mate, I wanna do you slowly” 1 [...]

The docile bond market of the past 20+ years is gone. Whilst many professional managers, allocators and advisors have been burned this past year, we expected underperformance but are now in the process of capitalising on higher yields. Whilst risks to rates and credit spreads remain, the possibility of moving up the capital structure (i.e. lower risk) to get a near equivalent income return (i.e. [...]