In 1714, an Englishman called Bernard Mandeville published his poem entitled “The Fable of the Bees: or Private Vices, Public Benefits”. The satire was about a hive of prosperous bees that were living a life of luxury. One day, some of the bees began to grumble that their lifestyle lacked virtue and the bees subsequently turn away from greed and extravagance. This leads to a rapid loss of prosp…Read the article
An overriding theme for U.S. high yield energy companies in the current oil price environment is having sufficient financial liquidity (cash, bank credit, etc.) to cover their obligations as earnings come under pressure due to low oil prices. Maintaining liquidity until oil prices recover will be paramount for energy companies to survive, even for those names that aren’t especially levered. It …Read the article
Diane Coyle came in to talk about her study of the history of Gross Domestic Product a couple of weeks ago. You can watch a short interview we did with her here. We also offered you a chance to win a copy of her book, and we had over 60 correct answers to this question: he’s regarded as one of the creators of modern GDP statistics, but in 1934 he told Congress that “the welfare of a nation can …Read the article
The rapid growth of the hybrid corporate capital market (non-financial) over the last few years has provided fixed income investors with an opportunity to access a quasi-equity income stream. Much like equities, hybrid bonds are perpetual in nature (though an option to call exists), and allow the issuer a degree of discretion over coupon payments. And, whilst they rank ahead of common equity in…Read the article
One of my favourite economic reads of 2014 was Diane Coyle’s book about an economic statistic – GDP. Whilst monarchs had been trying to take inventories of the national wealth since the Doomsday Book and earlier (so they could tax it!), the idea that you should rigorously measure economic activity is under one hundred years old. But the concept of Gross Domestic Product has now become central …Read the article
Matt’s and James’s recent blogs outlined some of the issues markets face when rates go negative. This is obviously no longer just a theoretical debate, but has real investment implications. Why do investors accept sub-zero rates when they can hold cash ?
To recap using Swiss Francs for example, it makes sense for a saver from a purely economic view not to deposit a Swiss Franc note into a negat…Read the article
Picture the scene: a meeting room, 40 floors up, plate glass floor-to-ceiling windows with views of central London in the background. At the polished mahogany table sits Hans Schmidt, the CFO of a major consumer global goods company. In walks Chad “Ace” Jefferson III, the latest in a long line of investment bankers assigned to cover his company. Behind Chad follows an entourage of five impeccab…Read the article