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...
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...
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...
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...
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...
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....
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...
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...
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...
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...