Patrick Poke

This week on Livewire we had nearly 100 wires posted, while all of them are worth reading, some of them stand out. Satyajit Das sees another crisis brewing, Marcus Padley says the market’s got it wrong on the banks, and Karl Siegling shares some winners from a lower AUD... Here are three things you should read this weekend.

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3 ingredients for a financial crisis

We last caught up with Das in October last year, and the videos have proven to be some of the most popular content Livewire has produced. Given the overwhelming response, we caught up with him again recently to get his latest thoughts. The picture he paints of the current global economy is not a pretty one; high debt, overvalued assets, and problems in the banking sector suggest trouble ahead, he says. In this video, he explains where we’re at currently, the risks in the economy, and where he sees it going from here. (VIEW LINK)

The market is wrong about the banks

Groupthink, or when “everyone gets carried away with the same idea,” can be a powerful force. In 2000, everyone ‘knew’ tech stocks were going up forever, in 2009, everyone ‘knew’ the financial systems of the world were going to collapse. As Professor Edward Krehbiel once said, “if everybody is thinking alike, then somebody isn’t thinking.” Marcus Padley from Marcus Today thinks we’re witnessing groupthink with the banks at present, as investment banks pump the idea that further capital needs to be raised. In this article, he takes a balanced look at the investment case for Australia’s banks. (VIEW LINK)

Who wins if the AUD falls?

Since 2012, when the AUD was worth more than one USD, and commodity prices started falling, analysts have been calling for a lower AUD. After falling relatively rapidly initially, the RBA has lamented as it’s remained stuck in the 70-80c range for since January 2015. But as interest rates continue to fall in Australia, and more data supports a possible rise in US interest rates, calls are beginning to be heard for a lower AUD once again. Karl Siegling from Cadence Capital has identified a number of investment that should benefit from a falling AUD, and he shares them here. (VIEW LINK)

Chart of the Week

Where to find returns in a low-growth world

With low-rates, low-growth, and low-inflation expected to continue for years to come, Schroders have shared a handy chart showing where the returns and the risks lie over the next three years.


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