Behavioural Finance Economics
Earlier this week the IMF released its latest economic outlook. It was the debut of the newly appointed and first female IMF chief economist, Gita Gopinath.
She observed that “While global growth in 2018 remained close to post crisis highs, the global expansion is weakening”. Indeed, the… Read the article
We wrote in May about the challenges facing Turkey, and in July about how these threats have the potential to produce extreme outcomes.
Last week saw the manifestation of these challenges. The Turkish Lira decline on Friday was among the largest one-day currency moves… Read the article
Behavioural Finance Economics
Eric recently wrote a fascinating piece on the ‘volatility virus’ which has contaminated the professional investment community. This blog post builds on that piece by considering the use – more specifically, the misuse – of quantitative ‘analysis’ more generally.
It is important to point out I am… Read the article
A story in the UK press this week suggested that the UK distributer of Panini football stickers (Connect Group Plc) has delivered only half the profits from the stickers that it had expected after a ‘major drop off in demand.’ The share price duly responded:
… Read the article
Behavioural Finance Economics Markets
Remember the ‘fragile five’? These were five emerging market currencies that were deemed to be most at risk of US policy tightening during the ‘taper tantrum’ of 2013. The main concerns for these economies centred on their vulnerability to foreign capital outflows.
Recently we’ve seen a re-emergence… Read the article
Fed officials have been particularly vocal about the slope of the yield curve this week (most notably here and here), in particular voicing concerns over a possible curve inversion (when yields on short dated bonds rise above those on long dated bonds).
The obsession… Read the article
After performance weakness in the immediate aftermath of the Brexit referendum, UK property delivered a strong return in 2017. In the first of two guest posts looking at the property environment in different parts of the world, Tony Brown, CIO of M&G Real Estate, discusses where this leaves us in… Read the article
Despite the fact that interest rates determine all asset valuations, there is nothing close to a general theory of interest rate determination. In 2016, I wrote about the flaws of a belief in an equilibrium rate of interest (typically known as R* in the academic literature) and the overemphasis… Read the article
Last month, Tristan Hanson and I made a proposal for a sovereign wealth fund (‘SWF’). It triggered a substantial debate. How would it operate in practice? Are we trying to fund investment or earn an equity risk premium? How do we address problems associated with state-ownership? How… Read the article
The flattening of the US yield curve has inspired much commentary and hand-wringing in certain quarters lately. The concern is overdone.
Looking back at periods of rising US policy rates over the past 30 years, history would suggest there is nothing remarkable about today’s level of long-dated bond yields relative… Read the article