“Howard Marks of Oaktree Capital, in his recent newsletter, summarised today’s investment environment brilliantly. He says there are four noteworthy things: current uncertainties are unusual in terms of number, scale, and insolubility; prospective returns are just about the lowest they have ever been; asset prices are high across the board; and pro-risk behaviour is commonplace.
It’s been a while and lots of ships have passed under the bridge, including an unnecessary election in the UK, the sacking of 12 White House staff members for various “misdemeanours” but mainly for disagreeing with he who must be obeyed, an interest rate rise in the US and the “successful” launch of yet another
If you were going to set up an organisation to help control and regulate the economy and the banking system how would you start? Would you employ over 1,000 Ivy League trained economists, many with PhDs, but little or no practical knowledge of running businesses? Would your board of governors come from the same background
If we had said at the beginning of 2016 that the UK would vote for Brexit, the US would vote for Trump and that Leicester City would win the Premiership you might not have taken the bet; a pity as a £10 accumulator would have netted £45 million…. According to Ladbrokes no one took that
Playing bridge, backgammon or chess is not dissimilar to “playing” the markets. Every new hand, board or day brings something different; a new auction, a new gambit, a new strategy. However, in the world in which we find ourselves the markets have an unseemly edge; they are not always what they appear to be at
The Un-Presidential election campaign is drawing to, what one would hope, is a blessed close. However, the parallels with the UK’s EU referendum are in many ways similar; not least of all the certainty that the losing candidate will not accept the outcome and that the post-election mood will be as fraught as on the
Those of us with children will be used to this refrain as we turn out of the driveway on the way to destinations unknown. Equally we will smile when recalling that “les enfants terribles” were more than likely asleep when we did eventually get there. A perfect analogy for market participants in this most unloved bull market perhaps. In the last edition of the View we asked “When?” and suggested that all was fine as long as the central bank narrative held together. This past week has put that idea very much to the test.
“I and others, have, for several years now, suggested that the primary problem lies with zero/negative interest rates; that not only do they fail to provide an “easing cushion” should recession come knocking at the door, but they destroy capitalism’s business models – those dependent on a yield curve spread or an interest rate that
When? “The art of financiering consists principally in multiplying and confusing accounts, till, at last, no one has courage to undertake an examination of them.” William Cobbett “The Budget” 1805 “I imagine that Ben Bernanke, Mario Draghi and Haruhiko Kuroda all stay awake at night imagining ways to force negative rates on savers. But the
The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds…Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come,