Insights

The safety net is in place!

The safety net is in place!

Active Risk Allocation (ARA) update: With yesterday´s news that the Japan State Pension Fund GPIF is ready to take a 31% holding in foreign government bonds, one of the final bits of a huge global puzzle fell into place. We believe that the structure of a safety net...

The cost of a bail-out

The cost of a bail-out

Could the global economies bear to simply make the private sector whole? Compensate the private sector for the brutal drop in economic activity that looks increasingly likely? Under a set of highly stylised assumptions we conclude - Yes, some countries could. Some of...

Credit crunch vs financial crisis

Credit crunch vs financial crisis

The majority of newspapers and analysts are looking for a financial crisis. In our view we are in a credit crunch, potentially heading straight for a credit crisis. A financial crisis may indeed follow, but it is not where we should look for clues right now. The locus...

A concerted effort

A concerted effort

This week’s most important investment decision is to start shorten duration of government bond portfolios. We also recognise that a shift towards a risk-on episode is in the offing as the government support programmes are detailed. Meaning we will no longer advice...

Margin call

Margin call

Through more than a month we have recommended zero allocation to risk assets and only to invest in recession assets. We have been adamant in our dire warnings about the global stock and credit markets and see no reason to change that. The actions by the US...

The economy is shifting into a new lower gear

The economy is shifting into a new lower gear

We reiterate our view that the financial market sell-off in risk assets is likely to deepen and we repeat our recommendation to reduce exposure to stock markets and high-yield bonds. Our preferred holding of equities is 0, zero, nothing. This is getting hairy....

Coronavirus – the sequel

Coronavirus – the sequel

Uncertainties dominate, and the stock market sell-off will continue. Sell equities and high yield bonds and Buy US long bonds. We reiterate our view that the financial market sell-off in risk assets is very likely to deepen and we repeat our recommendation to...

Putin’s great week

Putin’s great week

While everybody is looking the other way, Putin reasserts Russia’s influence Last week was great one for Russian president Vladimir Putin. He torpedoed the co-operation with Saudi Arabia, an axis which since 2018 had constituted the effective leadership of OPEC – of...

Coronavirus and all that

Coronavirus and all that

Uncertainties dominate, and the stock market sell-off will continue. Sell equities and high yield bonds. Be careful to separate known facts from hopes and guesswork. When trying to get our heads around the impacts of the corona virus we need to carefully analyse the...

US treasury bonds rally

US treasury bonds rally

Active Risk Allocation (ARA) update: Our primary indicator has pointed towards that investors should reduce risk assets since around Christmas. The same indicator is now falling fast through neutral driven by a shift in asset correlations primarily due to a break...