The Take
on what the market gives us…
Dad Jokes, Star Wars, and Convexity
—
June 23, 2021
Convexity is a critical part of bond management but often is less understood by many market participants. Following some post-Father’s Day dad jokes, we jump in to provide an explanation of convexity that we hope serves to clear up some typical confusion on the topic. Read More
Identical or Fraternal? It’s Not Always Obvious.
—
June 10, 2021
You know the old saying – you can’t judge a book by its cover. This adage is definitely relevant to credit research, where it is vitally important to dig deep and consider all factors – especially those related to E, S, and G. Read More
MBS Taper Without the Tantrum?
—
May 26, 2021
With the arrival of beach weather, the economy is heating up while the housing market is scorching hot. While the latter supports consumer confidence, worker mobility, and healthy local tax revenues, outsized home price inflation stokes undesired affordability issues. As a result, the Fed may soon find it necessary to curtail its $40 billion/month in MBS purchases even if it chooses to maintain its $80 billion/month in Treasury purchases for the time being. Read More
Racing in the Rain
—
May 20, 2021
The art of racing in the rain and how a slow but steady investment approach is likely to be competitive over a long-term time period. Read More
The Fed’s Rai Stones
—
May 12, 2021
As the inflation versus reflation debate rages, the Federal Reserve (Fed) must make unprecedented assumptions about the post-pandemic economy. Despite Powell’s assertions that long-term inflation risks are low, it’s simply too soon to say for sure. If evidence mounts that price pressures are rising faster than real growth, the Fed may need to curtail their aggressively dovish stance in the coming quarters. Read More
Play Hedge Ratios Using The Price Is Right Rules
—
May 5, 2021
In a rising rate environment, we feel it is better to be underhedged rather than overhedged in your LDI strategy. Read More
Voting with Your Feet - Possibly More True Today
—
April 28, 2021
Changing fiscal policies and COVID-related work environments may result in the increased elasticity of state and local taxes. Longer-term, this could have material impacts on underlying creditworthiness. Read More
The SOFR Sacrifice
—
April 22, 2021
As we approach LIBOR’s sunset, we continue to thoroughly examine our portfolios, assess our exposures, communicate with our clients, and plan for the changes that lie ahead. Read More
Climate Change: Addressing Big Problems through Small Changes
—
April 22, 2021
The enormity of climate change can feel overwhelming, in this piece, we discuss how small changes can make a big impact. Read More
Jigsaw Puzzles, LEGOs.... and Bond Portfolios?
—
April 14, 2021
How losing a puzzle piece made me realize that an active bond portfolio is more like a LEGO masterpiece than a jigsaw puzzle. Read More