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Risk Commentary

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Super Mario to the Rescue?

At 77 years of age, one would think a luminary such as Mario Draghi would be enjoying the sun someplace on the Amalfi Coast or on the shores of Lake Como.

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Blue Chips Turning Red: The Anatomy of Changing Leadership

The benefits of being a market leader are multifold, including greater profitability, typically greater sales gains, and early opportunities for innovation.

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Faulty Assumptions; Dangerous Consequences

A duty of a healthy society is to address existential threats. In our opinion, Western countries have made a major miscalculation with long-lasting consequences.

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A Guide to Financing Intangibles and Esoterics

Traditional lenders prefer hard assets and hard cash. However, as society has progressed, the less tangible assets have in many cases become more valuable.

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Changing Leadership; Blue Chips Turning Red

The late Jack Welch, the longtime widely acclaimed CEO of General Electric, claimed that he wanted GE to be first or second in each industry.

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A Peek into the Future

Imagine a time in the not-too-distant future when “machines” are more effective than most humans at performing most tasks.

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Quick Guide to PACE and CPACE Funding

PACE is a mechanism for financing energy efficiency and renewable energy improvements on private property.

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Unmitigated Disasters

The aim of this installment is to identify and analyze events that could prove disastrous for many professional investors.

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Changing Times; Be Careful What You Wish For

As of a few quarters ago, many were rooting for a decline in longer-term Treasuries.

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What You Need to Know About Litigation Finance

Litigation finance is different from the practice of lending to law firms whereby credit quality is derived from the operating income of the law firm.

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The End of (the Old) Globalization and its Implications

For a variety of reasons, the free trade mantra is breaking down with global implications.

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Productivity Revolution

We are on the verge of another revolution which is likely to similarly have a massive global impact.

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Changing Paradigms

The world is changing rapidly and the implications are massive.

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Funding the Funds

Providing capital to funds can take a variety of different forms.

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The Last Hurrah

On the ratings side of our firm we have a saying which is to check your politics, religion, and sporting views at the door.

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The Sisyphus Syndrome; Forecasting Fallacies

Economic forecasting is a well-established practice among credit and financial analysts.

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Sovereign Credit Quality: Key Drivers

Typically, issuers are subject to the vicissitudes of the economic environment. Hence a key question is what determines its strength or weakness, and perhaps more importantly, what predictions can be made regarding the future attractiveness.

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False Prophets And False Prophesies

As a risk manager or manager of institutional capital, it is critical to have a firm grasp on major challenges and likely outcomes. Building and maintaining a portfolio based on false assumptions can be disastrous.

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Medium to Long-term Predictions

A good sense of the road ahead makes the driving much easier. This installment provides our best thoughts on the future environment.

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Conestoga Conundrum, Assassin in our Midst

Automobiles are a major segment for most developed countries and are currently undergoing massive changes.

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Massive Sea Change

In the past, to be a sea power one required a navy. Likewise, to be a land power, one required an army.

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The Driver Of Returns – Installment II

This installment aims to suggest likely paths for all-important interest rates.

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Disney: Losing the Magic

Over the past year, DIS has been more or less flat while the SPX has been up nearly 10%.

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The Driver of Returns – Installment I

Beyond the cashflow or earnings performance of an individual firm, the next driver for nearly all investments are prevailing interest rates.

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Accidents Waiting to Happen

Outcomes often appear random, but closer analysis indicates that many were predicable.

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Emulating Mr. October

Reggie Jackson, the superstar slugger for the New York Yankees earned the sobriquet “Mr. October” for his uncanny ability to score runs when the team was desperate.

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Dangerous Assumptions

One of the greatest causes of pain (and conversely, gain) are assumptions that prove to be false.

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Technology Shifts

While it is easy to miss, our world is rapidly changing, thus presenting a new landscape of risks and opportunities. The focus of this installment is to address some of the major current and pending shifts and related implications.

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The Widow(er) Maker

In finance, the definition of a widow(er) maker is a trade which appears to be highly attractive, but for various reasons, turns out to be a major loser.

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Waiting for Godot

Samuel Beckett’s masterpiece was voted the "most significant English-language play of the 20th century” in a poll conducted by the British Royal National Theatre in 1998/99.

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The Killing Fields

A massive shift has occurred in cultural norms, leaving in its wake befuddled corporate managers and shareholders. 

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The Sound and the Fury

It has been confirmed that the Wagner Group has reversed its drive toward Moscow and is returning to its bases.

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Mercenary Mischief, A Deadly Game

As of early afternoon, in a reported audio message, Prigozhin, head of the Wagner Group, stated "To avoid bloodshed we are returning our convoys to bases."

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Goldilocks and the Gorillas

The tale of Goldilocks is well-known; it basically involves the protagonist, Goldilocks, finding the ideal temperature for a satisfying meal.

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Central Bankers' Dilemma

Central banks have always had massive power. Over the past 15 years, as they battled the 2008 Credit Crisis, they were endowed with even greater powers.

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A Critical Hole in Understanding

Investment returns for both equities and fixed income are driven by prevailing interest rates (and corresponding valuation metrics such as P/E ratios and cap rates).

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Mobility Mayhem

Our Risk Commentary aims to provide sophisticated institutional investors with thoughts, ideas, and themes that are likely to materially impact prospective portfolio performance.

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China Challenges; Inflation Imbroglio; France being French

Countries, like companies, must adapt their behavior to address challenges. From the mid-1930’s to 1940’s, the U.S. supported the Republic of China to counter Japan's expansionary efforts.

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The Power Of Swing Voters

The indictment of Donald Trump yesterday has fueled greater political polarization. However, institutional managers must focus their attention not on political poles but rather on swing voters and voter turnout, which will determine the result of the 2024 election. 

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Managing Manic Market Conditions; Most Likely Outcomes; Likely FED Funds Pivot; Japan Watch

The markets have been dealing with the fallout of the failure of several US banks. With US federal support, the markets have stabilized.

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