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G10 Macro Rates Blog – Beta is everywhere - Pure Alpha is hard to find

15 November 2018

Latest G10 Macro Rates Blog
With Shayne Dunlap, Co-Portfolio Manager

One of the biggest side effects of $14 trn of QE/Balance sheet expansion by the Fed/BoE/ECB and BoJ since the GFC, has been asset price inflation. This has created immense wealth for the lucky people who were long assets in various forms, such as housing or equities. Invariably this has increased the wealth divide to extreme levels and a generation of asset winners who believe it was their investing genius that acquired this wealth, when largely it was just a by-product of public policy. Not only those lucky individuals, but a large proportion of the investment industry may have fallen for the same self-deception. The fact is the lowering of central bank rates on inflation targeting and QE programs, has allowed the UST 10Y (and many other key government bonds) to rally since 1981. 

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G10 Macro Rates Blog – Where is the bid?

30 October 2018

Latest G10 Macro Rates Blog
With Shayne Dunlap, Co-Portfolio Manager 

In the dark days of WW2, Churchill was presented with the proposal of cutting funding for the arts. His reply was, “Then what are we fighting for?” That was about the Arts, but what about education? For some decades now, we have been effectively taxing education. Is Education meant to be capitalist? Or is it meant to be about what we are as a society - striving for a constantly better future? Leaving this debate hanging, let’s look at the economic effect and ask.   

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G10 Macro Rates Blog – Why macro now?

15 October 2018

Latest G10 Macro Rates Blog
With Shayne Dunlap, Co-Portfolio Manager 

The IMF loves Macro - now!
Why now?
Well to answer the question, we first need to look where we have been. 

Macro has generally suffered since the initial rapid response by Central Banks post the demise of Lehman’s a decade ago. This is primarily because interest rate policy has been stagnant ever since, driving volatility of market rates to record lows. There were a few blips such as the Bernanke taper tantrum, Italy and Greece Euro crisis. But these were sell volatility events. This benign status quo has changed. 

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