An American butterfly flaps its wings
The last few months have not been great for Australian investors. Mortgage rates have been increasing (despite no change in the RBA’s cash rate), thereby increasing the debt-servicing requirements of one of the most indebted household sectors in the world. Meanwhile, the Australian dollar has been depreciating, at least against the US dollar, representing an […]
Playing Chicken: The Fed vs the Bond Market
Filtering through the endless stream of information and data that we are constantly bombarded with can be an overwhelming task, particularly in the financial markets. Separating signal from noise is made even more challenging as one person’s signal, may be another person’s noise and vice-versa. There is perhaps no better example in the market today […]
The US is warming while China is cooling
We have written extensively about the evolving nature of the US-China relationship. There are multiple dimensions to this – including political, trade policy and defence policy. But it is also important to keep an eye on the aggregate health of the respective economies. These are the two largest economies in the world (indeed, the Chinese […]
China’s economic “aggression” through the lens of Trump
The US is officially in a tit-for-tat trade war with China. On June 18, President Trump stated the following: “On Friday, I announced plans for tariffs on $50 billion worth of imports from China… However and unfortunately, China has determined that it will raise tariffs on $50 billion worth of United States exports… Therefore, today, […]
Europe looking good in 2018
We were recently asked by a client what our outlook was for European equities in the 2018 calendar year. The short answer is that we are in the business of picking stocks, not aggregated regional indices. This answer, of course, is obviously not particularly helpful, so we also tried to draw some sensible conclusions from […]
The forgotten moral hazards
“Moral hazard” are two words that used to be thrown around a lot. When the global financial crisis hit in 2008, the US government was busy bailing out banks and other financial institutions. But it was only the really big ones, deemed “too big to fail”, that were lucky enough to receive taxpayer aid. This […]
Introduction to the Adaptive Markets Hypothesis
The second best book that I read in 2017 was Professor Andrew Lo’s Adaptive Markets: Financial Evolution at the Speed of Thought. Adaptive Markets is mandatory reading for any serious professional who studies financial markets. It shines a light on many of the obvious flaws of the prevailing market philosophies out there. The Efficient Market […]
Sky Business with Carson Scott featuring Andrew Macken: 10 January 2018
Andrew joined Carson Scott on Trading Day Live Sky Business to discuss global markets. Which businesses are being structurally challenged by Amazon?
Scenarios for a Chinese financial crisis
It is no secret that China’s credit bubble is the largest in the world today, and one which poses the greatest systemic risk to global financial stability. With the quinquennial Chinese Communist Party congress concluded and the veneer of stability no longer required, it is an opportune time to consider how China’s credit growth might […]
Higher rates = negative government stimulus
Last week we wrote about a near-term bullish potential scenario for the US economy. This scenario is based on a confluence of long-term and short-term trends. As we wrote: From a longer-term perspective, we note that the health of the US consumer has improved significantly over recent years. And this is important for consumption – […]
