Editorials

We all know the outcome: You have certainly heard about the debt ceiling in the news in recent weeks. US lawmakers are currently arguing about the debt ceiling because the government has reached its borrowing limit and needs Congress to authorize an increase in the...

When the safest assets aren’t any more: The fall of Silicon Valley Bank came as a surprise, but the reasons why are not all that surprising. It’s the story of a bank mismanaging its assets and creating panic. Oh, and the Fed also shares some responsibility. In the...

Where are we going? This thought must be in most investors’ minds at the moment and probably the last couple of quarters as well. Last year as inflation was taking off and central banks hiked interest rates at an unprecedented speed, it seemed economies had to be...

No landing for the economy? Economists and investors have been divided about a recession or no recession in the US and a subsequent hard landing or soft-landing scenario for the economy. However, a third opinion has started to emerge of late and that is that the...

What has happened to bonds? 2022 has been a difficult year for financial markets and especially for bonds. The asset class usually seen as a safe haven for investors is suffering only its second double digit decline since 1931 and marking a negative year for only the...

Will there be a dovish pivot? After several weeks of declines, equity markets recovered some ground in October. This happened despite the Federal Reserve confirming tighter monetary policy was needed and economic data coming in mixed. On the other hand, company...

“Lehman moment” avoided? Last week, the Bank of England took emergency action to avoid a meltdown in the UK pensions sector, unleashing a £65bn bond-buying programme to stem a crisis in government debt markets. It all started after the government announced a new tax...

A new sovereign debt crisis? The strength of the dollar could lead to a sovereign debt crisis.  While the US dollar has been the one consistent winning trade of 2022, it could force several countries hit by economic hardship to default on their debt. As economic...

What defines a recession? July’s US GDP release started a confusing and curious debate about what a recession actually is. The -0.9% growth reading for Q2 would meet the generally accepted definition of a recession, or two consecutive quarters of negative GDP growth....

Is the Fed engineering a recession? The US Federal Reserve made a bold statement in June by hiking rates by 0.75%, the biggest rise in almost 30 years.  It is widely expected that July’s rate hike will also be for 0.75%, showing just how committed the Fed is to get...

NO RECESSION FOR NOW     It’s looking increasingly likely that a recession will be avoided in 2022, despite evidence that growth prospects are weakening.  The jobs report for May showed that hiring is still expanding at a healthy rate. Manufacturing and...

The Fed conundrum   Last week, US GDP fell at an annual rate of 1.4% which was worse than forecast. At the same time, the US just like the rest of the world is facing very high inflation and with no meaningful drop in sight, at least in the short term.  As a...