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 [...]
Click here for a print friendly version. Walking the Talk Amid one of the worst years for bonds on record, BondAdviser’s desk provided a 66% win/loss ratio for holding period returns on our Conviction recommendations. Furthermore, we averaged an internal rate of return (IRR) of 10.5% (2021: 8.8%) on our Buy (n=45) recommendations across our coverage Universe. In total for [...]
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. [...]
Many in markets are aware the US Treasury yield curve is inverting. This means yields at the short-end are higher than the long-end. Historically this has been bad for banks (they borrow short and lend long) and economic sentiment more generally. Further discussion is tacked onto the inversion, with regard to correlation and causation. In other words, just because there [...]
Suncorp issued a new Tier 2 capital instrument earlier this week with the wholesale 10 year, non-call 5 year security issued at a margin of 2.30%. Issued into the wholesale market with Austraclear settlement, the bond is generally bought and traded by Institutional investors or investors that qualify as wholesale sophisticated investors. These investors typically mark their portfolios to market [...]
US inflation hit a 40 year high in February 2022 at 7.9% - up from 7.5% as reported by the US Labor department a month earlier. Bloomberg reported that the primary reasons for this outcome lay not just in the rising cost of petrol, but also food and housing costs. Looking even closer at the inputs that go into the [...]
In 2022 we expect volatility to increase as a function of central bank liquidity draining from the system. In parallel, we expect inflation to remain persistent, as we have argued since May 2020. This makes asset allocation difficult as the prospects for real return in many sub-asset classes are slim. We noted the possibility of a mini-cycle in July 2021 [...]
Click here for a print friendly version. Walk the Talk BondAdviser’s desk, occasionally in WFH format, was active across a tumultuous 2021, providing over 360 recommendations, across 145 unique securities and 55 different issuers. More importantly, the vast majority (62%, [n=84]) of our conviction recommendations (defined as Buy, Sell, or Subscribe) added alpha against that of the respective security benchmark. [...]
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ABN 31 164 148 467 ‧ Important Information
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
