The dramatic events of October 2008 changed the game for banks globally; over-leveraged and under-capitalized, lenders throughout the developed world have embarked on a lengthy and painful period of rationalization.
As the price of oil continues to languish in the mid-$40 per barrel, down from over $100 last June, markets seem to be ignoring the positive and focusing on the negative: broader US and world equity markets are down on the year, oil and oil-servicing companies are taking a huge hit
An ancient Chinese proverb warning against groupthink tells of how a high-ranking official once asked his King: would you believe a cry that a tiger was free in the marketplace?
An article in the FT yesterday entitled “Pension funds target ‘unrealistically’ high returns” summarises analysis prepared by Create Research of 190 pension schemes with combined assets of €1.9 trillion.
A rash of fears have overtaken markets. Over the past four weeks, the VIX (volatility index - aka “the fear index”) has risen 86% whilst global equities have slumped 7.6%
In an announcement last week, CalPERS called an end to its $4 billion hedge fund portfolio, citing scale, complexity and cost as key rationale for shutting down a program that has been in place for twelve years.
There is an optical illusion known as The Spinning Dancer in which a female dancer continuously pirouettes. Some people will see the dancer spinning clockwise (with her left foot on the ground) while others will interpret her as spinning anti-clockwise
There has been a growing chorus of investors and pundits decrying bubbles in nearly every major asset class - rates, credit, equities, and even (once more) property.
An article in yesterday’s Financial Times, entitled “’150 people’ will control UK funds”, underscores what has been common knowledge for some time - that the investment consulting industry has become increasingly concentrated.