The elephant in the room investors have overlooked

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Macquarie Infrastructure fell 41% in a single session in February, a direct result of the elephant in the room investors have overlooked, as outlined here by Charlie Jamieson from JCB. Charlie explicitly warns of the ‘train having left the station’ for a potential ‘down-the-firepole type pricing moment’ that all investors need be conscious of.

Key points

  • Short dated rates that drive funding rates for consumer loans have had a substantial rise.
  • LIBOR rates drive $4.5 trillion of loans, and have exploded higher.
  • Delinquency rates take time to evolve, and there is usually a lag in analysts factoring doubtful loans into valuations.
  • Moves slowly, but outcomes can be very pronounced; this in play right now.

Further insights

As we continue to face volatile market periods, bonds will generate significant capital gains along with their fixed interest payments, as investors seek the highest quality investments with guaranteed returns. Find out more


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