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Category Archives: Analysis
In the following video, Michael Lewis, author of “The Big Short,” delivers his personal experience with investment management during the financial crisis. He describes the inherent conflict of interest investment banks have because of their dual roles as both client advisors and proprietary traders. Continue reading
Clients and advisors ask me–all too frequently–“What is a good ETF/Mutual Fund/Stock to invest in?” Generally, these questions are accompanied by some type of buy-and-hold comment indicating these monies are for retirement. Let’s break this question apart in this way: … Continue reading
Central Bank policy makers seemed to be engaged in a race to the bottom, each seeking to depress their currency in order to hike exports and increase the attractiveness of their labor force in the international market.
The Japanese have long advocated for a weaker Yen, particularly since China’s rise to prominence on the back of an artificially low Yuan, and have become alarmed at the rapid increase in their currency relative to major trading partners. Despite the fact that top policy makers expressed a commitment to open markets, the tide has rapidly turned and now these same individuals are openly speaking about market intervention. The probability of the BoJ taking steps to increase competitiveness via a Yen depreciation was greatly magnified by the recent announcement that China had surpassed Japan as the world’s second largest economy.
Harrisburg, Pa., will skip a $3.29 million payment on its general obligation refunding bonds, series D and F of 1997, according to a letter obtained by Dow Jones Newswires.
Clients and advisors have found themselves reaching for yield in this low return environment. After calculating the tax-equivalent yield, municipal bonds were some of the highest yielding investments. It is unfortunate that the trend of reaching for yield has ignored the risk associated with these investments. Municipalities do default. Governments do default.
Based upon this default, the risk premium for holding municipal debt obligations just went up. As with a previous post, it is imperative to be able to dynamically adapt your portfolio structure.