In the search for an apparent bargain, turnaround stories and cyclical companies are attracting far more capital and attention than they otherwise would.
Memos
Credit Snapshots – January 2020
Bite size updates on soaring global debt levels, anecdotes of yield chasing and the LIC/LIT fee battle.
Credit Snapshots – December 2019
Bite size updates on Paul Volcker’s legacy, European banks and UK fund lock ups.
Credit Snapshots – November 2019
Bite size updates on emerging market debt, US auto loans and Virgin Australia’s very junky debt raising.
Credit Snapshots – October 2019
Bite size updates on leveraged loans, Greece’s non-performing loan securitisation and India’s bad debts.
There’s No Good Case for October’s Rate Cut
The RBA cut the Cash Rate on October 1st, but it has again failed to put forward a decent argument for why another cut is required.
The Dumb Money is Buying Bank Hybrids
The retail buyer base for bank hybrids is taking far more risk to get the same return as institutions buying AAA rated Australian RMBS
BB’s are the new BBB’s
With the drop in overnight rates and credit spreads, credit investors are having to take far more risk to earn the same return
Central Banks are Fighting Economic Fundamentals
Central banks are using a monetary policy hammer when economies need a screwdriver. Here’s what they should do instead.
Bank Hybrids are a Screaming Sell
For bank hybrid investors, there are some obvious alternatives that are both lower risk and have higher expected returns
Two Cheers for APRA on TLAC
APRA deserves credit for rejecting the false claims of the major banks and ordering a substantial increase in their tier 2 capital
The RBA Has Lost Its Way
The RBA is ignoring the mounting evidence of the damage caused by low interest rates and the counterproductive outcomes from its actions.