The last decade The last decade has seen a remarkable recovery in asset values, and a reasonable recovery in economic growth. The deployment of QE, rate cuts and bailouts were useful in the crisis years for ensuring the functioning of the financial system and the emergency funding of the economy. This prescription has not been

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

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

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%

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