Hedge funds may have been the winners in the bear market of 2002, but in the crisis of 2008 they were among the biggest losers. Locked in to losses by “gates” and other “side-pockets”, private investors have been disappointed by their performance in the market rally over the past four years. Today aversion to liquid […]
Hedge Funds have performed poorly for the last 3 years compared to treasuries and corporate bonds, therefore people are questioning their relevance in portfolios. We believe there’s a place in each portfolio for this kind of investment as long as it is allocated in the relevant asset class and, most importantly, when the managers are […]
Thursday’s European monetary announcement only true surprise in terms of monetary policy was that the Governing Council appears to be seriously considering a negative deposit rate. However, as it is a two-edged tool, its impact on bank loans would be uncertain. No clear guidance to unlock the credit crunch A decision to buy asset-backed securities […]
According to Eurostat’s flash estimate, euro area annual inflation is expected to be 1.2% in April, down from 1.7% in March and well below consensus expectations of 1.6% y-o-y. It is the largest monthly fall since May 2009 and also the lowest level since February 2010. Moreover, the euro area’s core annual inflation (inflation excluding […]
Yves Bonzon dissects the Cyprus crisis to understand how Europe deals with debt issues on a case by case basis. The existing situation opens interesting opportunities – as long as investors manage to hedge against government and nationalisation risks!
The final version of the bailout for Cyprus spared savers with deposits of less than EUR100,000 from being forced to contribute towards rehabilitating and recapitalising the island’s ailing banks. Nevertheless, mere mention of a levy being imposed on deposits was enough to send a fresh crisis of confidence rippling through the eurozone. At the time of writing, the waves do […]
As the following chart shows, the growth in bank assets in Cyprus has become excessive as in Iceland, which caused a massive devaluation and capital controls that are still in place five years later. Although the talk is of taxation, what is really meant is the transfer of wealth from creditors to debtors, which is […]
Though some have roundly criticised the impact the commodities boom has had on the environment and sustainable development, the changes it implies might well turn out to be to Mother Nature’s advantage in the much longer run.
We maintain our forecast of a 0.1% q-o-q GDP contraction in Q1 2013 for the euro area as a whole, and respectively -0.5% (consensus: -0.1%) for 2013 and 0.9% (consensus: 0.9%) for 2014. Worse than expected Euro area industrial production fell by 0.4% m-o-m in January, worse than the 0.1% m-o-m decrease expected by the […]