Hello. I’m Burnham Banks and I studied economics in the late 80s and early 90s. I’m still studying economics today and am still no wiser. This blog is a journal, a record of my thoughts and experiences. If we are destined to repeat our mistakes, we should at least repeat them faithfully. If not, then perhaps the past is a mischievous guide and we should try something new.
Synchronized global slowdown? Weak ISM manufacturing data.
Friday, 04 January 2019 | 10:06 am
The latest ISM manufacturing number declined sharply from 59.3 to 54.1, a disappointing number, but not an unexpected one. Manufacturing is global whereas non-manufacturing is more domestic. Given the weakness in manufacturing PMIs in Europe and Asia, it was surprising that the US manufacturing PMI was so resilient. A decline was to be expected. In
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What changed in Oct 2018 and what is the short term outlook for 2019.
Wednesday, 02 January 2019 | 8:00 am
In order to understand what will drive markets in 2019, we need to understand what changed in October 2018 that caused the market to decline. The Fed miscommunicated policy. In early October, Fed Chairman Powell signalled to the market that Fed policy would be tight, saying that rates were far from neutral. This was change
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Leveraged Loans. Time to Start Buying. In Stages.
Thursday, 13 December 2018 | 2:09 pm
Leveraged loans have been one of the best investments in the last decade, on a risk adjusted basis. Using the S&P LSTA Index as a gauge, the 10 year annualized return has been 8.9% with a volatility of less than 1%. The high yield bond market, proxied by the iBoxx HY index has returned 9.6%
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The Bad Case Scenario. How Markets and the Economy Could Suffer.
Monday, 10 December 2018 | 4:07 pm
Just to be clear, this is not my base (highest probability) case but market volatility is at the point where it is useful to consider what could go wrong, what if we are wrong about our base case, and how far could reality be from our expectations. To reiterate, the global economy is actually in
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What To Expect In Markets And The Economy in 2019. Q&A With Burnham Banks.
Friday, 07 December 2018 | 5:07 pm
We began 2018 with expectations of synchronized expansion and then things slowed down almost everywhere. How do you see the economy progressing? Trade is an interesting area since the American President decided to turn a Cold War into a shooting one. Global trade, as a percentage of GDP, had peaked in 2008 and has
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