Rendezvous with the Future: Looking Forward Through the Lenses of the Past Quarter Century
In this commentary, and in future postings, neither do we intend to outline all possible scenarios regarding the unfolding of geopolitical and geoeconomic events, nor do we suggest that the anchoring of portfolios is the only thing that investors should do. Rather, we...
Monthly Barometer’s Forward-Looking Monthly Review: An Interdisciplinary View of our Complex Global Economy
Today’s world is safer and richer than it has ever been, but this is of little comfort to those whose expectations are repeatedly disappointed. When one starts connecting the economic, geopolitical, societal and environmental dots, reasons to worry are mounting. In...
Weekly Market Update
 Market Action For the second straight week U.S. equities markets posted robust returns though they remain down on the year so far. Yields on benchmark bonds also remain stubbornly low, indicating confidence is still lacking over future equity returns. The British...
Systemic Risks and Collateral Velocity, Part II: Credit Bottlenecks and Market Tremors
In our commentary dated February 10th (http://stage.blacksummitfg.com/3375) we outlined the significance of collateral velocity and the inherent dangers of another crisis given that the main culprit (derivatives) of the 2008 crisis has not been addressed yet. The...
Weekly Market Update
 Market Action Global stocks had their best week of 2016 thanks largely to softer expectations from monetary authorities. China continues to inject cash into the economy and reported strong credit growth last month. Meanwhile European authorities articulated a strong...
The Flattening of the Yield Curve and the Migration of Risks: The Path of Hedging Holdings and a Contrarian View on Market Trajectory
Historically, the inversion of the yield curve is a good predictor of recessions. On top of this when spreads of high yield bonds reach the current level of 850 bps (i.e. 8.5% above Treasuries) the probability to experience a recession within 8-12 months is between...
Weekly Market Update
 Market Action Global markets posted another wild week even though Chinese markets were closed due to the New Year. Volatility out of Japan and Honk Kong and the poor performance of the financial sector weighed heavily on stocks despite a relief rally on Friday. Oil...
The Banking Sector, Collateral Velocity, and Credit Creation, Part I: Where are we Headed?
Modern finance depends on credit. Credit creation depends on inter-bank trust. Inter-bank trust depends on asset valuation. Asset valuation is an opaque process that is a function of several parameters (economic, financial, geopolitical, strategic, among others). For...
Weekly Market Update
Market Action Markets continued their poor start to 2016 with another down week. Technology and Biotech names were sold off especially hard due to a combination of poor earnings from some key names and regulatory scrutiny over drug prices. The U.S. employment report...
Market Hysteresis and Capitulation: Financial Stress and Secular Trends
It takes some time for the market to comprehend when stress is built up in the economic and financial systems. This is part of the hysteresis reality. When financial stress builds up for some time, a crisis ensues that is followed by a recession. The graph below from...
