Will Rates Rise if Ben Bernanke is Replaced?

Posted on November 29, 2012 by Sam Wardwell

I was recently asked, “What will be the impact if Bernanke is replaced? Could a new Fed Chairman increase rates sooner than expected and put major pressure on the fixed income market?” My response: I see three scenarios under which rates might rise significantly:

  1. Fed tightening…highly unlikely in the next year
  2. U.S. investor sentiment shift…most likely
  3. Global loss of confidence…least likely, most damaging (more…)

Filed under: Contributors, Equity Market Insights, Fixed Income Market Insights, Macroeconomics, Mutual Fund Industry, Political, Sam Wardwell | Leave a Comment »

“Bond Deer” in the Headlights – The Fixed Income Investor

Posted on November 29, 2012 by Mike Temple

An insightful client exclaimed to me last week, after I had enumerated the many risks facing bond market investors, that he felt like a deer in the headlights. “Bear” with me for a paragraph or two while I elaborate. . . Imagine you’re a deer on a lonely stretch of highway late at night. To either side are high walls of rock (the psychologically difficult-to-scale barriers of asset allocation into equities). Behind is the long uphill that bonds have coasted on (with some bumps) for the past 30+ years. In front, coming closer every second is a set of large, bright headlights. Scary, huh? (more…)

Filed under: Contributors, Fixed Income Market Insights, Macroeconomics, Mike Temple, Mutual Fund Industry, Political, Uncategorized | Leave a Comment »

Optimism on the Fiscal Cliff, the Economy and the Markets

Posted on November 20, 2012 by Ken Taubes

Like a lot of people, I’m electioned out and glad it’s over. In a recent conversation with political strategist Greg Valliere we discussed the country’s biggest hurdle now: the fiscal cliff, where automatically programmed spending cuts and tax increases meet at the end of the year. It’s front and center for Congress to get a deal done, and Republicans and Democrats face a complicated set of negotiations and compromises to make that happen. Greg thinks it will be an extraordinary period of “introspection, reflection, naval gazing and finger-pointing.” That’s a given, of course – but I do see some light on the horizon.

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Filed under: Contributors, Equity Market Insights, Fixed Income Market Insights, Ken Taubes, Macroeconomics, Political | Leave a Comment »

The Seeds of Higher Market Volatility Were Sown

Posted on November 16, 2012 by Mike Temple

A paradigm shift in financial markets has taken place since 2008 into a more volatile investment environment that will demand different ways of managing risk. In an ironic twist of intention, today’s higher volatility is the consequence of attempts by central banks to engineer a less volatile economic environment. This environment, one in which recessions are shorter/shallower and expansions stronger/ longer than they were in the early part of the 20th century, has its roots in the early 1980s and has spanned over two decades (read about it our “Blue” Paper titled, Living in a More Volatile Investment World.) (more…)

Filed under: Contributors, Equity Market Insights, Fixed Income Market Insights, Macroeconomics, Mike Temple, Political | Leave a Comment »

U.S. Elections: Big Price Tag, Little Change

Posted on November 8, 2012 by Ken Taubes

The big surprise of Tuesday’s outcome is that the estimated $6 billion spent in support of elections across the country resulted in no change in the composition of the government. We have the same president. The House is still controlled by Republicans and the Senate is still controlled by Democrats. The Republicans fell short of expectations by losing ground in the Senate.

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Filed under: Ken Taubes, Macroeconomics, Political | Leave a Comment »

Looming Danger: Market Complacency over the Fiscal Cliff

Posted on November 5, 2012 by Paresh Upadhyaya

After the elections, market attention will shift to the Fiscal Cliff – economist shorthand for the double hit of tax increases and spending cuts set to take place at the end of the year. We believe financial markets have severely underestimated the true impact of this looming potential debacle. The fiscal contraction that will occur is around $700 billion, of which only $80 billion is priced in, according to the only study that has attempted to quantify the impact. If Congress does not adequately address the Fiscal Cliff, the likelihood of a recession in the U.S. next year will be substantially increased. (more…)

Filed under: Contributors, Equity Market Insights, Fixed Income Market Insights, Macroeconomics, Paresh Upadhyaya, Political | Leave a Comment »

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