Project Syndicate - 19 Jun 2018
This is an article that will fuel the concerns of all those who fear that the next crisis will come from high-yield corporate bonds. Since the beginning of the global financial crisis ten years ago, the value of nonfinancial companies' outstanding bonds has nearly tripled, as the result not least of growth in corporate debt in emerging markets. A correction seems likely as defaults rise, but as the McKinsey consultant shows, the broad shift toward bond financing might actually be a welcome development (reads in 6-7 min, with lots of charts).
Published in Weekly selection 23 June 2018
Bloomberg - 12 Jun 2018
The columnist argues that investors are unprepared for a foreseeable problem: the lack of liquidity that will make the fallout from the next financial crisis much worse. The current reality is this: outside of a few stocks, major currencies and some government securities that trade consistently in large volumes, few instruments are truly liquid. This article explains in simple, understandable and convincing terms why in a future crisis, a lack of liquidity will accelerate the effect of shocks and volatility (reads in 5-6 min).
Published in Weekly selection 15 June 2018
Project Syndicate - 22 Feb 2018
The Harvard economist’s take on the recent stock market correction: it is now clear that last year's unusually low financial and economic volatility is over. He also argues that stocks are too high from a longer-term perspective, implying that that their rate of return is likely to be substantially lower over the next 15 years than it was over the last 15 years (reads in 4-5 min).
Published in Weekly selection 23 February 2018