Media Worth Consuming – March 2018

Jonathan Rochford

Narrow Road Capital

Some investors are asking if global growth is too strong yet State Street sees global investor confidence soaring. There are signs of economic stress in the US, as well as global leading indicators pointing to a negative outlook.


Money managers are mostly paid for marketing not performance and that’s not helped by the fact that is it tough to recognise the difference between luck and risk in investing. It’s also tricky to decide what’s in and out in socially responsible investing. Here a list of things that equity mangers rarely say. Australian and Canadian private equity firms have been accused of inflating their asset valuations to boost their fees and entice new investors. Here’s some gimmicks used to make private equity returns look better.


Tesla’s bonds slump below $90 as Moody’s downgraded the company to B3. It’s heading towards a cash crunch from upcoming maturities and substantial operational cash burn. It doesn’t help debt investor confidence that Tesla uses sharp accounting and government subsidies to reduce losses and increase cashflows. The SEC says Theranos was a brazen fraud, but only fines the founder $500,000. A Chinese logistics company has been hit with an $870 million fine for stock manipulation. Three US whistleblowers will split an $83 million reward.


Zombie companies will feel the pressure from rising US interest rates. Some consider Deutsche Bank a zombie as it has lots of excuses but little prospect of making a decent profit. Here’s the 27 biggest moments from the financial crisis. Yield chasing has African sovereign debt the flavour of the month. Offshore issuance by high yielding Chinese borrowers has surged in 2018. Venezuela will divide its currency by 1000 after inflation tops 7000%.


Politics & Culture

Facebook helps scammers target stupid consumers. America’s debt counsellor is working overtime. Too much internet changes your brain in negative ways. The impacts of increasing and decreasing testosterone levels. Bullying and many other social problems have a high correlation to fatherlessness.


The IRS estimates that 18.3% of US taxable income is not reported. Illinois has a math problem, not a political problem, which includes unsustainable teacher pensions. Despite the recovery, most US state and local government budgets are stressed. Trump’s new CIA Director is a strong supporter of torture. The very long list of things Hillary is still blaming for her loss. Even Democrats are sick of Hillary’s whining. Obama’s policies discouraged growth, Trump is unleashing what could have been.


France is prosecuting those who cite facts about Islam but ignoring persecution of Christians and Jews. China’s government will stop citizens from using airplanes and trains if they post content it doesn’t like. Trade sanctions have hit North Korea hard, forcing them to negotiate. Who pays the loan when the South African government confiscates your land?


Economics & Work

The Bank of England finds that quantitative easing (QE) redistributed wealth from savers to borrowers. German employers are offering more perks like free sausages to attract employees. American companies are teaching skills colleges don’t to overcome shortages of skilled workers.



A Romanian court rules a man is still officially dead even though he attended the hearing. A Russian plane showers gold bars over the countryside. An Australian man is hospitalised after chasing cockroaches with a home-made flamethrower. What Americans buy when they are drunk. Passengers are getting fatter as airline seats shrink. Hollywood gets trolled for its failure to act on abusers. Winnie the Pooh is banned on Weibo for its likeness to the Chinese President.

Jonathan Rochford
Portfolio Manager
Narrow Road Capital

Narrow Road Capital is a credit manager with a track record of higher returns and lower fees on Australian credit investments. Clients include institutions, not for profits and family offices.

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