Trumping Tail Risks

Christopher Joye

Coolabah Capital

In The AFR I argue that portfolio performance in 2017 will likely hinge heavily on which version of Donald Trump prevails: the aspirational entrepreneur who concentrates on the economy, delegating non-core decision-making in high-tail-risk areas like foreign policy to subject matter experts; or the impulsive and erratic megalomaniac who ushers in extreme geopolitical volatility that whip-saws markets. I also question why APRA has taken so long to determine what an "unquestionably strong" bank is; query its decision this week to set the so-called "counter-cyclical capital buffer" that is designed to protect depositors in the upswing of the credit cycle at the bottom of its 0%-2.5% range when home values and housing debt have been soaring to new record highs in absolute terms and relative to household incomes; suggest the majors' senior bonds may be cheap given their historically attractive floating-rate spreads above cash; and consider the upside and downside risks to these assets in light of rating agencies threatening to downgrade the sovereign and our banks, the expectation of ongoing capital accumulation, and a potentially benign TLAC environment...Free (VIEW LINK)


3 topics

Christopher Joye
Portfolio Manager & Chief Investment Officer
Coolabah Capital

Chris co-founded Coolabah in 2011, which today runs over $8 billion with a team of 40 executives focussed on generating credit alpha from mispricings across fixed-income markets. In 2019, Chris was selected as one of FE fundinfo’s Top 10 “Alpha...

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment