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LATEST ARTICLES
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Eurozone stress has been felt most acutely in the so-called periphery, but investors should look at the core of the European Union.
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At first quantitative easing offered palliative care to the global economy – now the patient is finally reviving.
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If you want to kill the conversation at a dinner party, one sure-fire winner is pensions, but it is the $25.2 trillion in pension assets that fuel global capital markets and there needs to be some serious thinking on how they will work in the future.
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Despite political shocks, the issuers of ‘safe’ government debt will continue to have the upper hand over the bond vigilantes, and the great financial repression will continue.
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The fear of a debt deflation cycle stalked markets last summer and forced a new round of monetary intervention.
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The belief in the self-healing genius of financialised capitalism has been irrevocably shaken. The memoirs of Alan Greenspan and Mervyn King tell the tale.
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Central bank policy has evolved from unorthodox to downright strange as politicians have failed to take control of the post-crisis economy. Sooner rather later they will confront a stark choice signposted Greece or Ireland.
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Monetary authorities still have ammunition aplenty. Recent inflation readings in the US and Sweden also suggest the deflationary doom-mongers are wrong.
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Fears of a 1980s-style debt crisis in emerging markets are overblown. But to clear the miasma of statistics, investors would do as well to understand the sentiment of their peers as well as the credit fundamentals of their investments.
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The global savings glut will continue to buoy markets, for now. But all sins come at a price.
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Banking supervisors and other regulators are determined to bring so-called shadow banking within their purview.
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The prospects for industrial metals is a weighty subject. Investors that blithely believe price corrections revert to mean may be looking at a false dawn.
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The bull market that began in March 2009 is flagging, but the overwhelmingly negative narrative from many strategists and commentators is overdone.
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The wisdom of ages needs to be heeded by bankers, investors, policymakers and regulators alike if we are to avoid lurching from crisis to crises, to the end of days.
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Four intellectual revolutions have undermined our sense of self, but anomie and profits are not incompatible.
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China’s bid to join the currencies in the IMF’s SDR basket is more than a footnote of interest only to economists. Policymakers should take note.
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We have become addicted to debt. With the global economy slowing, Andrew Capon fears another severe bout of repression.
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So far in 2015 we have been witnessing death by a thousand policy rate cuts around the world. That is turning the US Federal Reserve’s dream of rate normalization into a dystopian nightmare.
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The pretence of knowledge is the curse of the financial world, especially when we live in such uncertain times. There are very few certainties left.
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The record books have multiple new market landmarks to note so far in 2015. Investors should be wary, it will be a rollercoaster ride and there may be nausea ahead.
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How did the relationship of the Swiss franc and the euro turn out to be purely platonic? Conscious uncoupling was perhaps inevitable.
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Markets ended 2014 beset by fear. Deflation is now a global concern and the doomsayers see rapidly falling commodity prices as the canary in the coalmine. But the nattering nabobs of negativism are wrong.
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A war of all against all in currency markets will not be pretty. For some countries it may also be too little, too late. The International Monetary Fund has failed in its role as the arbiter of currency values.
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Investment is easy when you can immanentize the eschaton. But even radioactive assets such as uranium can be worth running a Geiger counter over.
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Since the US Federal Reserve met in September the data has been tortured and every word pored over. Why are we in awe of the crystal ball gazing of supposed experts?
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Unless there is an accelerated plan for full political and fiscal union, the next eurozone crisis could prove existential.
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Like an alcoholic that believes another drink can do no harm, the Federal Reserve has not learnt the lessons of the global financial crisis. Once more it seems determined to mop up only after the next bubble bursts.
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There is a bull market in asset prices and a bear market in volatility. Central banks are driving both. But policy is starting to diverge and this happy, if eerie, equilibrium will soon end
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The global financial crisis might mark the beginning of a broader realization that global hyper-capitalism has reached its limits. The failure of the AstraZeneca/Pfizer merger shows that, for good or ill, a backlash has begun.
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The Federal Reserve is playing mind games by trying to persuade investors that the biggest danger to economic stability is deflation. It is both disingenuous and bad news for the dollar.
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The president of the Federal Reserve Bank of Dallas, Richard Fisher, has compared the effect of quantitative easing on investors to “beer goggles”.
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Demographics are the forgotten dimension of investment. The experience of Japan suggests we should pay more heed.
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Regulators and litigators have become latter-day big-game hunters. That spells trouble for the world’s biggest corporations and should encourage investors to look beyond mega-caps.
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Investment strategists seem convinced that the euro crisis is over and European equities will outperform in 2014 as growth returns. There are clear and present dangers to this cosy consensus view and the banks are still at the heart of the problem.
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In my mind's eye, I have gathered some of history's greatest military strategists to discuss the state of the markets. Their conclusion is that cash should play a greater part in their portfolios.
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Janet Yellen is eminently well qualified to lead the Federal Reserve. But investors should not assume that the continuation of policy as normal comes without risk. Her dovish stance on inflation is worth noting and hedging against.
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The Greek economy has been more than the sick man of Europe; it has been a standing joke. But the discipline imposed by membership of the EU has forced the necessary adjustment and the future is beginning to look brighter.
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The volatility this summer suggests that markets will find it hard to adapt to policy normalization. But there are still plenty of reasons to stay bullish.
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Exchange-traded funds are sold with three promises: index matching, liquidity and transparency. At least two of those claims are dubious.
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Market volatility is unsurprising. The actions of no longer really independent central banks are stoking the embers of a dying system. A final reckoning is coming.
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Banks need to be better regulated. But a financial transactions tax is more than wrongheaded. As currently formulated, it would be hugely damaging.
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The central bank-driven global money-go-round has been turning ever faster since last summer. Now the Bank of Japan has turbo-charged it. So far, investors are enjoying the ride. But a bout of nausea cannot be ruled out.
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Following the second star to the right until morning might be wiser than listening to many central bankers. They may have put us all on a road to nowhere.
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Regulators are beginning to express concerns about a potential collateral crunch causing a new market seizure. One solution might be to increase the use of SDRs.
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Reports of the death of the cult of equity might have been exaggerated. For those with intestinal fortitude, stocks offer both relative and absolute value. The current bull market might still be in its infancy.
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The Guelphs have papal blessing, but to preserve your wealth you are better off sticking with the Ghibelline camp.
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QE has artificially suppressed the yield on government bonds, as it was supposed to, but the unintended consequences of unorthodox monetary policy might be felt for years.
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The BBA is holding worthy-sounding debates on regaining trust. Instead they should be following an example from 16th-century Germany.
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Rising levels of obesity have produced an epidemic of diabetes in India. But there is no part of the country more bloated than its bureaucracy and less healthy than its legal system.
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The incoming Chinese leadership should use the subtle insights of behavioural finance – and the blunt message of bond issuance – to rebalance their economy toward domestic consumption.
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Romney and Obama support losing banks; US falling behind Europe in the ‘non-bank bank’ sector.
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Pro-cyclicality is the curse of our times, thanks to the magnifying effects of ill-timed actions and inaction – but not so in Chile and Norway.
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Hyperactive policymakers have been dancing a frenzied tarantella but the mournful strains of the tango can be heard in the distance. Investors would do well to prepare their portfolios before the jig is up.
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Grexit or not, the selective default of Greece has already changed everything for both bond and equity investors in Europe.
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With a socialist at the gates of the Élysée Palace and the eurozone limping along, there has never been a better time to buy cheap European equities.
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In a recent speech, Federal Reserve chairman Ben Bernanke delivered a paean to 21st-century central banking. But investors confronted by extreme and unorthodox policy with uncertain outcomes are returning to their own version of the gold standard.
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Deutsche Bank is not alone in discovering that a dash for assets can lead to a lingering headache.
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New strictures have breathed life into shadow banking – it now constitutes about a quarter of the global financial system – and regulators fear they have created a monster. But look closer and there's much more to this financial Frankenstein…
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It is hard to be optimistic about 2012. But much of the bad news is reflected in prices and a confluence of factors could yet provide support for equity markets and other risky assets.
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There is no solution to indebtedness and the inevitable and painful process of deleveraging, so lean back and protect yourself like Muhammad Ali and the US Congress.
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The UK is in dire economic straits. There needs to be a shift in the Bank of England’s quantitative easing policy to buy the government time and fund a British development bank.
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Faced with an unpalatable menu of policy choices, there is concern that another course will be taken: financial repression. It is the economic prescription favoured by Fagin. Bondholders should beware.
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The economies of developed nations are now dangerously dependent on consumption funded by debt to spur growth. Turning the clock back to make do and mend won’t be painless but it is both inevitable and long overdue.
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The flurry of deals among stock exchanges is a fight for relevance in a world in which regulation and technology have lowered barriers to entry. It is a battle the London Stock Exchange lost many years ago.
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Three months before the start of the credit crunch in 2007 this column predicted that the IPO of Blackstone Group marked the “endgame for private equity”. With Glencore listing in London there might be good reasons to call time on the commodities bubble.
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The decision by Standard & Poor’s to place the US on credit watch with a “negative outlook” is a watershed. With politicians unwilling to attack spiralling welfare costs, a bond crisis might be just around the corner.
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Investment consultants are taking a leaf from Madonna’s playbook and reinventing themselves. Implemented consultancy is causing a commotion but it is far from clear who the winners will be.
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Goldman Sachs’s Gary Cohn thinks hedge funds, not banks, are likely to cause the next financial crisis. He needs to take a long hard stare in the looking glass.
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Affluenza has caught a cold. Those hoping to piggyback off an ever expanding middle-class piggybank should take due note.
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During the financial crisis big became synonymous with bad. But in pensions management super-sizing can seriously increase your wealth.
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Pension funds are slashing their allocations to equities and reorienting their portfolios to more accurately match liabilities. Strategically that makes sense. Tactically it smacks of buying at the top and it is already creating distortions in markets.
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The Saga of Iceland’s involvement in the financial crisis has elements of tragedy and farce. But it would be unwise to underestimate this nation of warriors, poets and volcanoes.
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If central banks want to become macro prudential regulators, identifying asset price bubbles is necessary but not sufficient.
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Currency debasement and inflation have ultimately been bad news for men of modest means. Lincoln Rathnam learns lessons from the history of Emperor Diocletian on why our present penchant for McMansions might point to an Appalachian future.
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The euro will survive. But the self-preservation instinct of its architects must mean the defenestration of Greece.
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The ties that bind sovereign issuers and investors are intricate and complex. With sovereign defaults a real and present danger, they should be untangled before it is too late.
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Defined benefit pensions are rapidly being supplanted by defined contribution plans, especially in the UK and US. However, it is increasingly clear that many DC schemes are not fit for purpose.
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The notion that “you can’t time the market” has somehow become received wisdom. It is, of course, nonsense. The experience of two very British institutions and some data analysis reveals the truth behind the cant.
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Professional investment managers and their clients may have given themselves an impossible goal of generating superior short-term returns.
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Reports of life in the barbarous relic have been greatly exaggerated.
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The financial crisis might be the making of hedge funds. Institutional investors will change the industry for the better by demanding onshore structures, independent administration and greater transparency. Mainstream financial centres should see this as an opportunity and ditch the fatuous parts of proposed regulation.
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In the Greek myth, Sisyphus was condemned by the gods forever to push a rock uphill only for it to roll back down. This is a familiar fate for those seduced by the cult of equity investing.
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Policymakers like to talk up the dollar. But an orderly decline of the greenback would be no bad thing.
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In July this column read the last rites over some unexpected victims of the crisis. Happily, some deaths have been greatly exaggerated while other parts of the economy and markets are due for a renaissance.
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There are foxy footprints all over current policy choices. But cunning plans and clever innovations have a nasty habit of unravelling and causing greater pain than choosing the straightforward course.
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The credit crunch and recession will reshape finance and markets in some surprising ways.
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Quantitative easing is being hailed as a policy panacea. The problem is that it sounds a lot like a prescription that causes the very problems it is designed to treat.
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David Ricardo’s counsel of despair on the fate of the working man should also give investors food for thought, writes Lincoln Rathnam.
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People wanted to believe ponzmeister Madoff because they crave stable, compounding returns. After his spectacular fall from grace, calls to shine a light on the opaque world of hedge funds will be irresistible.
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The current economic crisis exposes gaps at the heart of European policymaking. They will only widen as eurozone countries and the ECB grapple with the prospect of quantitative easing.