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Ten Seconds Into The Future. 2015 Macro and Investment Outlook

Themes: Risk On and Pray Hard.   Rates and Credit: Long US treasuries at the long end. 30 year and 10 year USTs remain attractive relative to short end. Expect further curve flattening. Overweight / Long China equities. Despite slowing economic growth, earnings growth remains robust and the PBOC will likely be expansionary and China
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China Outlook 2015

The Chinese government has focused on a number of things some of which include: An anti corruption initiative. Rebalancing the economy towards domestic consumption. Maintaining financial stability and a certain level of economic growth. The anti corruption initiative is a long term structural reform to strengthen the rule of law in China. The government appears
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China. A positive outlook at last.

The China A share market surged last week. It is time to reiterate my optimistic appraisal of the China market. It is not too late. Back in July, we noted that China equities were underowned. China equities were trading cheap. China equities had been in a 6 year bear market. This was most likely the
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Proper ECB QE.

ECB QE: QE is not just quantitative, it is qualitative. Until underwriting standards are dropped, credit creation in the private sector Eurozone will be moribund. How can the ECB get it going again? Purchasing sovereign bonds will do nothing more than flatten term structures and tighten sovereign CDS spreads making it cheaper for governments to
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Fed Funding Treasury

The current interest expense on public debt of the US treasury presents an interesting picture. Given the current term structure, 2 year treasury FRN’s are an extremely attractive means of financing. They trade at some 4 basis points over 3 month T bills, which trade at about a basis point. Assuming that the 3 month
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