The Leveraged and Inverse Funds Channel

High Yield Train Wreck

The first defaults will occur at the lowest end of the problematic market: high yield or “junk” bonds. They will play a role comparable to subprime mortgages in the last crisis. We’ll see mortgage problems as well, but I think overleveraged companies will be the core problem.

Building a Better U.S. Economy

This shouldn’t surprise anyone, but public trust in the federal government is eroding. Sixty years ago, 75 percent of Americans expressed faith in the government to do the right thing “most of the time” or “just about always.” Seventy-five percent! You can’t get 75 percent of people to agree on anything now, as the recent “Laurel or Yanny” video proved.

Trump "Victories" on Trade are Anything But

Earlier this year when President Trump began beating the drums loudly, causing fear of a trade war (and assuring us that such a conflict could be easily won), I cautioned that he had no idea the trouble he was courting . Based on his spectacular misunderstanding of the power dynamic built in to international trade, he was also in danger of bringing a knife to a gunfight.

ECRI Weekly Leading Index Update

This morning's release of the publicly available data from ECRI puts its Weekly Leading Index (WLI) at 148.5, down 0.2 from the previous week. Year-over-year the four-week moving average of the indicator is now at 3.34%, down from 3.80% last week. The WLI Growth indicator is now at 3.5, down from the previous week.

‘Simplification Day’ for Oil & Gas MLPs: What Investors Need to Know

We believe the news is evidence of a broader shift toward simpler corporate structures in the midstream energy sector – a trend that supports our investment approach and our constructive view of the sector.

The Madness of Crowding Out

Public debt may be growing at the expense of private debt, the Chinese bond market is opening up, and important dates for tariffs are fast approaching.

Vehicle Miles Traveled: Another Look at Our Evolving Behavior

"Travel on all roads and streets changed by +0.5% (+1.4 billion vehicle miles) for March 2018 as compared with March 2017. Travel for the month is estimated to be 268.7 billion vehicle miles." The 12-month moving average was up 0.05% month-over-month and 0.9% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) is down 0.01% month-over-month and down 0.1% year-over-year.

Long Train Running: Leading Indicators Show Little Risk of Recession

Leading economic indicators have accelerated since morphing from recovery to expansion, so let’s see what that means for the economy and stock market looking ahead.

Global Economic Perspective: May

In this month's Global Economic Perspective, our Fixed Income Group opines on rising energy prices, US Treasury yields, emerging-market currency pressures and global economic growth.

YCG Q1 2018 Quarterly Review

In-depth write up of Moody's (MCO) highlighting how it fits into YCG's investment framework which focuses on identifying "great business" and "market-timing" mispricings.

A Strategic Income Fund that is Thriving in a Challenging Bond Market

Carl Kaufman is the co-president, co-chief executive officer and managing director, fixed income at Osterweis Capital Management. He is the lead portfolio manager for the Strategic Income Fund. That fund has had an annualized return of 6.18% since its inception on 8/30/02. Its performance exceeded the AGG by 278 basis points. I interviewed Carl last week.

The Future for Factor Investing May Be Different Than its Backtested Past

Data mining is a huge risk with factor-based investment strategies. Many factors have proven to not work in practice. Even the most popular factors, like value and momentum, may prove less effective going forward.

Margin Debt and the Market

 

FINRA has released new data for margin debt, now available through April. The latest debt level is up 1.1% month-over-month. The April data gives us an additional sense of recent investor behavior.

Anticipating the Next Recession

In this issue, the Economics team looks at current recession risks in the U.S. and eurozone, and explores how rising oil prices will affect U.S. consumers.

Blockchain Will Completely Revolutionize How We Mine Gold and Precious Metals

This week I had the pleasure to attend Consensus 2018 in New York, the premiere gathering for the who’s who in blockchain, bitcoin and cryptocurrencies. Attendance doubled from last year to an estimated 8,500 people, all of them packed in a Hilton built for only 3,000. Ticket sales alone pulled in a whopping $17 million, while event booths—the largest of which belonged to Microsoft and IBM—generated untold millions more.