For some months now, we have been warning of the stresses building in China’s credit structure and warning that, if unaddressed, they would lead to pain in asset markets and potentially to weakness out in the real economy. Here, we lay out the arguments in detail.
One of the truisms of the current market is that volatility – both historical and implied – is historically low, but just how extreme is it? How does this manifest itself in the bond, as opposed to the stock, market? What does it tell us about the risks we may be running by maintaining naked exposures?
Please follow the link to find a brief, but instructive overview of this most burning of issues:-
Are equities ‘overpriced’ and if so, by how much? What about bonds or that largely forgotten asset-class, commodities? How do the three of them inter-relate and can we take advantage of such behaviour in order to build a better, more macro-resilient portfolio?
We take a detailed look, here, in the presentation found by clicking on the link:
Does it make sense to plot multi-decade asset prices on a linear scale? How reliable are macro ‘profit’ estimates? Why is the curve flattening and what will a reduction in Central Bank reserve balances mean for assets?
Some readers may be interested in putting a voice – and even a face – to the author. Below are links to three recent audio-visual publications in which I discuss US & Chinese macro as well as the interrelations between the three great asset classes of stocks, bonds, an commodities. Following on is a wider sampling of my views. Continue reading …