Don Coxe ‘Its the Banks Not the Economy’!

0

Brief excerpt from the commodity expert, followed bu fill document in scribd.

Since mid-May, we have been growing increasingly bearish about the stock markets and the economies of Europe and, to a somewhat lesser extent, the USA.

In our Conference Call on August 12, we moved Recommended Equity exposure to the bottom of our 40 – 60 pension fund range.

Crypto Hedge Fund Three Arrows Blows Up, Others Could Follow

CryptoA few years ago, crypto hedge funds were all the rage. As cryptocurrencies rose in value, hundreds of hedge funds specializing in digital assets launched to try and capitalize on investor demand. Some of these funds recorded double-digit gains in 2020 and 2021 as cryptocurrencies surged in value. However, this year, cryptocurrencies have been under Read More

Our core concern has been the breakdown of public finances, particularly in the eurozone, which is undermining the traditional Capital Asset Pricing Model. European banks are collectively heavily over-levered, and any “haircuts” to the valuations of eurosovereign bonds could be devastating to the financial system. In a momentous paradox, the epicenters of European risk today are not toxic mortgage securities or junk bonds, but the debts of overindebted and underachieving eurozone nations. The financial crises in the eurozone are rooted in the breakdown of the Risk-Free Rate of Return on government bonds, which exposes many European banks—particularly the major French banks—to towering levels of risk, thereby rendering Basel III valuations near-useless.

The Atlantic has not proved to be a secure moat for financial models in the United States: Collateral Debt Swap pricing for Treasurys now costs slightly more than the pricing of prime corporate debts, and major American banks and money market funds have huge exposures to struggling European banks.

The once-impregnable Efficient Frontier is becoming the Deficient Frontier, pushing pension fund risk/return projections into no-man’s-land.

There would never be a good time for an implosion of the risk models that have served banks, pension funds, and other financial institutions so well for so long. But a time when economic weakness is intensifying and spreading across the OECD is a uniquely grim time for an existential challenge to risk management systems.

Full Scribd document below:

Don Coxe Basic Points Nov 2011//

Updated on

Sheeraz is our COO (Chief - Operations), his primary duty is curating and editing of ValueWalk. He is main reason behind the rapid growth of the business. Sheeraz previously ran a taxation firm. He is an expert in technology, he has over 5.5 years of design, development and roll-out experience for SEO and SEM. - Email: sraza(at)www.valuewalk.com
Previous article Egan-Jones ‘Jefferies Needs Extra $1 Billion’, Oppenheimer ‘Egan-Jones is Flat Out Wrong.’
Next article Texas Court Affirms MERS’ Role as Mortgagee

No posts to display