As the threat of the Spanish flu receded a hundred years ago, people celebrated by holding large public festivals. What followed for those who survived the spread of the disease was a period of both social and economic euphoria. According to historians, pandemics can be brought to an end either… Read More »
The Probability of Default (PoD) of a company is the central concept behind a conventional rating. Ratings constitute a fundamental link between markets and investors. Their importance cannot be overstated. However, traditional ratings, according to the Credit Rating Agencies themselves, are merely opinions. The process of computation of a Probability… Read More »
Andrew Ross Sorkin: I want to ask you about the other big theme here, stakeholder capitalism and governance and the role in all of these things. I’m curious what you think the role of banks should be in all of this. Do you have a greater responsibility to actually use… Read More »
2019 was a stellar year for risky assets, with the surge of equity indices posting gains above 20% in almost all regions, with a special mention for the Nasdaq, up 35%. Recession fears of January 2019 abated as central banks reversed their monetary policies, moving from a hawkish stance to… Read More »
The S&P 500 is at an all-time high and three firms are now in the one trillion-dollar club. Surely this is an indication of the ultimate peak in investor euphoria? The same level of “irrational exuberance” witnessed at the height of the tech bubble and pre-crisis? Margin debt suggests not.… Read More »
The MSCI US equity index delivered a total return of more than 250 percent in the 2010s. A cocktail of record low rates, stock buybacks, and balance sheet expansion has supposedly intoxicated the market and some have predicted that a mega hangover is due. But current data does not appear… Read More »
Hefty risk perception was a key feature of 2019, as the White House’s trade war and systematic reprisals from China fueled the prospect of a watershed moment and a long-lasting shock on economic activity right throughout the year. This scenario was borne out as world growth did take a downward turn, and manufacturing output dipped in most large countries (US, euroarea, Japan) or even suffered a serious slowdown (China). However, this new situation does not fully reveal the US President’s intentions. Looking across the pond, Donald… Read More »
Investors may have felt this year’s market environment has come straight from a horror film. Even the bravest of investors have been spooked by a combination of elevated political uncertainty, disappointing global growth, subdued momentum in corporate profits, and concerns that policymakers are “out of ammo”. Nevertheless, diversified portfolios such… Read More »
Rather than holding a definitive vote on Prime Minister Johnson’s Brexit deal on 19 October, MPs in the House of Commons withheld their approval for the deal as insurance against a “no deal” Brexit on 31 October. In response, PM Johnson requested an Article 50 extension, but asserted that his… Read More »
The International Monetary Fund (IMF), under its new Chairdigging into the details of the report, the interesting part comes from the positive effect of monetary stimulus. According to the IMF, global growth would be 0.5% lower in both 2019 and 2020 without such initiatives. Put differently, this means major central banks have been successful in… Read More »
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