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“We now expect that at least one vaccine will be approved by the end of 2020 and will be widely distributed by the end of 2021Q2,” Goldman Sachs economist Joseph Briggs wrote on Sunday.
...the availability of a vaccine is key to giving consumers the confidence to go back out there and spend.
Goldman’s increased optimism about the vaccine led the firm to increase its 2021 GDP growth forecast to +6.2% (from +5.6%) and lower its 2021 year-end unemployment rate forecast to 6.5% (from 7.0%).
....even if Goldman is correct about the timing of the vaccine, the firm’s forecasts also assume consumers continue to get aid until public health conditions are more normalized.
There's more at the link. Check it out. Buy a subscription if you can afford it.Since 2008, banks have kept more capital on hand to protect against a downturn, and their balance sheets are less leveraged now than they were in 2007. And not every bank has loaded up on CLOs. But in December, the Financial Stability Board estimated that, for the 30 “global systemically important banks,” the average exposure to leveraged loans and CLOs was roughly 60 percent of capital on hand. Citigroup reported $20 billion worth of CLOs as of March 31; JPMorgan Chase reported $35 billion (along with an unrealized loss on CLOs of $2 billion). A couple of midsize banks—Banc of California, Stifel Financial—have CLOs totaling more than 100 percent of their capital. If the leveraged-loan market imploded, their liabilities could quickly become greater than their assets.
How the pandemic will change financial markets foreverQuestion: You’re not predicting outstanding returns from equities either.
Answer: No, but you will have some returns. The traditional 60/40 equity/bond split, which earned 10% a year over the past 40 to 50 years, is now down to 3½%. Even if you’re tilted to equities, you’re still not going to get 10% again. You’re going to get something below 5%, but investors really have to contemplate what their overall asset-allocation parameters will be. In a world of zero yields, Is 80/20 the way to go? Asset classes that are a hybrid between “safe” bonds and equities—such as high-yield bonds and loans, collateralized loan obligations, commercial mortgage-backed securities, convertibles, and equity and mortgage REITs—offer equity-like returns. There’s a case for emerging market debt, because I think yields will have to come down further in emerging markets as well. China is going into [J.P. Morgan’s global bond] index this year, and our longer-term view is that China is going toward zero yield.
Kochin, Michael S., and Levis A. Kochin. "When Is Buying Votes Wrong?" Public Choice 97, no. 4 (1998): 645-62. Accessed August 9, 2020. http://www.jstor.org/stable/30024452.To quote Justice Brennan of the United States Supreme Court, in his 1982 majority opinion in Brown v. Hartlage (456 US 56):To follow the terminology of Pamela Karlan (1994), the Constitution permits candidates to buy votes wholesale, from many voters with a single promise of political action, but not retail, from a single voter with a promise of a private side-payment.We have never insisted that the franchise be exercised without taint of individual benefit; indeed, our tradition of political pluralism is partly predicated on the expectation that voters will pursue their individual good through the political process, and that the summation of these individual pursuits will further the collective welfare. So long as the hoped for benefit is to be achieved through the normal processes of government, and not through some private arrangement, it has always been, and remains, a reputable basis upon which to cast one's ballot.
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