Posts Tagged ‘central banks’

Is it Safe . . . . ?

Anyone who has seen the 1976 film Marathon Man will no doubt recall the cringe-inducing scene where a sadistic Nazi dentist (played by Laurence Olivier) tortures the protagonist (Dustin Hoffman) by drilling into his teeth without anaesthetic. Throughout the ordeal, Olivier repeatedly asks, “Is it safe?” Not knowing what “it” refers to, Hoffman is unable to come up with an answer to avert the torture.
 
I couldn’t help thinking of this scene in the movie and the constant question, “Is it safe?”, without relating it to the current investment climate. It is over 5 years since the eye of the last financial crisis, with stock markets almost back to their 2007 highs, while gold struggled. It must be safe, right?

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The Central Bank Revolution I (Well ‘Nominally’ So)

 

 

“The Checklist Manifesto – How to get things right”, is a masterful book for its narrative and practical application. Written by Atul Gawande, an acclaimed surgeon based in the US, he takes us on a journey of how the simple checklist helps individuals deal with immensely complex situations, where risks can be calculated and often lives protected – skyscraper construction, medicine and investment banking.

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Risky, Riskier, and the Riskiest

Is now the worst time to invest?  I would go further and argue there has never been a riskier juncture in the history of investment at which to put money to work.
 
Let’s take a quick look at some of the typical choices.
 
Corporate bonds. These, on an outright basis, have never offered such a low yield. Implied company-default rates are almost preternaturally low, thus almost certainly not reflecting reality.
 

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