Monthly Archives:

January 2007

Dan Gardner’s maiden blog entry – the outlook for leveraged loans

Jim has nagged me into finally making my maiden blog entry. Given his revamped M&G Global Macro Bond Fund has just taken a 14% position in European leveraged loans (see yesterday’s blog article), it’s actually a good time for me to give a brief introduction to the asset class and our thoughts on valuation and risk. Leveraged loans have been an increasingly popular asset class for institutions a… Read the article

The M&G Global Macro Bond Fund

We’ve given a relaunch to the the M&G Global Managed Bond Fund, and, as you can see, it has a new name too – the M&G Global Macro Bond Fund. The “old” fund was a fettered fund of funds, invested solely in the M&G bond range, but thanks to some regulatory changes we’ve been able to adopt COLL “wider powers”, which allows us to invest not only in funds, but also in direct holdings and some of the…

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Housing market : Down down, deeper and down

The US housing market is getting worse and worse, and the UK looks set to follow it.

Yesterday saw the monthly update on the disaster that is the US housing market. Figures showed that the downturn is accelerating – the S&P/Case-Shiller Composite-20 Index showed that the US house prices fell 7.7% in the year to the end of last November. The S&P/Case-Shiller Composite-10 Index (which covers the…

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Fine wine (and fine art) as an inflation hedge

Emails from wine merchants are starting to pop into my inbox with offerings of en primeur wine from the 2005 Burgundy vintage. Thanks – probably – to global warming, pretty much every vintage, from every wine growing region of the world, is at least acceptable nowadays, and the years where the hype declares it to be “the vintage of the century” are increasing. For example, we’ve had three “vint…

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Too much choice?

More choice is a sign of greater prosperity, right? That tall skinny soya cappuccino extra hot (without chocolate on top) was just what you wanted, wasn’t it? It might not be. It turns out that the more choice you give people, the less satisfied they will be. It used to be the case that if you didn’t like the coffee from the shop it was the shop’s fault for only selling an instant brand. Now, i…

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Michael Milken

The ‘founder’ of the High Yield market, Michael Milken, was in town yesterday at a conference I attended. Mike is the guy who restarted the High Yield market in the 1980’s (high yield bonds were around during the great depression) when he saw great returns available on fallen angels. Mike served 22 months and paid almost a billion dollars in fines for securities fraud after making a fortune at …

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100,000 fixed rate mortgages refix within a month

Interesting article in the Times this morning (see here) discussing the increases in fixed rate mortgages over the past week as borrowers scrambled to fix their home loans. Typical 2 year fixed rate mortgages have increased by around 0.4% over the week, to around 5.39%. This is bad news for the 100,000 to 150,000 borrowers whose much lower fixed rate deals come to an end over the course of the …

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Not quite a letter – CPI comes in at 3%

CPI inflation in the UK hit 3% in December. Anything higher than this and the Bank’s Governor Mervyn King will have to write a letter to Gordon Brown explaining why inflation is so high. It probably won’t read “Dear Gordon, the reason inflation has busted out of the target you set for us is that we’ve kept real interest rates at exceptionally low levels for too long. Yours, Mervyn.” – but it pr…

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The Bank of England has to continue driving rates higher

In an article that appeared in the Daily Telegraph on January 13th (view article here), I argue that the Bank of England has to drive interest rates higher. Structural changes in the UK mortgage market mean that the transmission mechanism between UK interest rates and the UK economy is weakening. UK inflation is the highest it’s been in more than a decade, and real interest rates (which are wha…

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Personal Inflation Calculator

Here’s the link to the Office of National Statistics new Personal Inflation Calculator that was widely covered in the weekend press. Not that we can get it to work, and we have no idea what an SVG file is, or how to download one. But it’s a great idea. Let us know if you can get it working and whether your personal inflation rate is above the national average (likely if you like to eat out a lo…

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