Transport Sector, China and Asia-focused Research

Charles De Trenck

Thematic (Sector/Industry)

<p>I was working on a bigger piece on HK vs Singapore which I will put out later, and reviewing political classifications of economies, when I saw a good comment from Ray Dalio on Trump and his invocation of Ayn Rand. I was also in the middle of reading the history of Athens and re-reading Aristotle’s Constitution of Athens, which added perspective to Dalio. There is a lot to apply to today which I think is worth noting.</p><p>Quick conclusions before delving deeper:</p><ul><li>Ray Dalio is right to invoke Ayn Rand and flag the positives Trump could bring about;</li><li>But Let’s also keep in mind how deep the recent hole banks, Bernanke and Obama dug;</li><li>Looking at Aristotle as well, we might say that Trump’s partial democratic election has been to install an Aristocracy…this will certainly be interesting;</li><li>There are some really good free reads to turn to for a quick study of Ayn Rand;</li><li>When we listen back to Ayn Rand, we see that she disliked MNCs/Corporations because of their manipulation of government…Let’s see where Trump takes this.</li></ul>

I was working on a bigger piece on HK vs Singapore which I will put out later, and reviewing political classifications of economies, when I saw a good comment from Ray Dalio on Trump and his invocation of Ayn Rand. I was also in the middle of reading the history of Athens and re-reading Aristotle’s Constitution of Athens, which added perspective to Dalio. There is a lot to apply to today which I think is worth noting.Quick conclusions before delving deeper:Ray Dalio is right to invoke Ayn Rand and flag the positives Trump could bring about;But Let’s also keep in mind how deep the recent hole banks, Bernanke and Obama dug;Looking at Aristotle as well, we might say that Trump’s partial democratic election has been to install an Aristocracy…this will certainly be interesting;There are some really good free reads to turn to for a quick study of Ayn Rand;When we listen back to Ayn Rand, we see that she disliked MNCs/Corporations because of their manipulation of government…Let’s see where Trump takes this.

Trump Not Likely to Halt Decline of US. But Ray Dalio Makes Good Case in Bringing Back Ayn Rand

Founder and Strategist, Entext Economics & Strategy

Sean Maher

Founder and Strategist

Entext Economics & Strategy

Entext provides institutional investors with distinctive, actionable asset allocation and thematic research, which typically challenges the market consensus. Our clients range from credit, equity and multi-asset hedge and pension funds to family offices and sovereign funds. 
 
We focus on identifying key inflection points in macro data and relative asset performance amid the 'groupthink'  and confirmation bias that characterizes most investment bank analysis.

Macro Driven Investment Insight

<ul>
<li>Overweighting EM versus DM and global resources/deep cyclicals looked like a compelling contrarian bet coming into Q1 as consensus bearishness reached an extreme.</li>
<li><div>If the reflationary theme persists through 2017, EM equities will outperform bonds - the structural decline in ROE which led to very low P/B ratios now looks over.</div></li>
<li><div>The broad improvement in EM relative macro momentum is reflected in net earnings revision momentum (strongest in MSCI AXJ, with India the exception) and factory PMIs, if not…</div></li>
</ul>


Overweighting EM versus DM and global resources/deep cyclicals looked like a compelling contrarian bet coming into Q1 as consensus bearishness reached an extreme.
If the reflationary theme persists through 2017, EM equities will outperform bonds - the structural decline in ROE which led to very low P/B ratios now looks over.
The broad improvement in EM relative macro momentum is reflected in net earnings revision momentum (strongest in MSCI AXJ, with India the exception) and factory PMIs, if not…


2017 Asset Allocation Outlook: Part 1 – Emerging Markets and Commodities

Public Relations and Social Media Manager, Dechert LLP

Peggy Heffner

Public Relations and Social Media Manager

Dechert is a global specialist law firm

Dechert LLP

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In an increasingly challenging environment, clients look to us to serve them in ways that are faster, sharper and leaner without compromising excellence. We developed a first-of-its kind legal project management department, which uses technology, people and processes to drive efficiency and deliver value for our clients.

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<ul><li>The presidential election has opened the possibility of significant changes to the Dodd-Frank Act regime that has been implemented over the last six years.</li><li>It remains to be seen what plans the incoming administration will bring to this area.</li><li>However, new regulatory proposals and other developments continue to present a complicated regulatory climate for banks and other large financial institutions.</li></ul>

The presidential election has opened the possibility of significant changes to the Dodd-Frank Act regime that has been implemented over the last six years.It remains to be seen what plans the incoming administration will bring to this area.However, new regulatory proposals and other developments continue to present a complicated regulatory climate for banks and other large financial institutions.

The New Future of US Banking and Financial Services Regulation

<ul>
<li><div>We saw consensus ‘groupthink’ reach new levels in 2016, exacerbated by surging AUM managed in trend following style.</div></li>
<li><div>Extrapolation remains the default forecasting tool for most professional opinion and Japan has been a case in point over the past 18mths.</div></li>
<li><div>The USDJPY saw its biggest two-week move since 1988 post the US election, as quant funds retreated from record speculative long positions.</div></li>
<li><div>
<span lang="EN-US">Foreign investors bought almost $8bn of Japanese stocks in the past two weeks, reducing their net selling</span>…</div></li>
</ul>


We saw consensus ‘groupthink’ reach new levels in 2016, exacerbated by surging AUM managed in trend following style.
Extrapolation remains the default forecasting tool for most professional opinion and Japan has been a case in point over the past 18mths.
The USDJPY saw its biggest two-week move since 1988 post the US election, as quant funds retreated from record speculative long positions.

Foreign investors bought almost $8bn of Japanese stocks in the past two weeks, reducing their net selling…


Consensus Rethinks Japan, as Serial Extrapolation Proves Costly

<ul>
<li><div>Gold miners have crashed about a third since the August 25<sup>th</sup> note warning they were vulnerable to real yields (with which gold inversely correlates) heading higher – the worst looks over.</div></li>
<li><div><span lang="EN-US">With the USD index testing the 100 level, a new consensus has rapidly formed around loose US fiscal policy coinciding with tighter monetary policy in a re-run of the 1980s-dollar bull market.</span></div></li>
<li><div>
<span lang="EN-US">The US 10-yr yield on a currency hedged basis is attractive again to European/Japanese investors -renewed inflows should</span>…</div></li>
</ul>


Gold miners have crashed about a third since the August 25th note warning they were vulnerable to real yields (with which gold inversely correlates) heading higher – the worst looks over.
With the USD index testing the 100 level, a new consensus has rapidly formed around loose US fiscal policy coinciding with tighter monetary policy in a re-run of the 1980s-dollar bull market.

The US 10-yr yield on a currency hedged basis is attractive again to European/Japanese investors -renewed inflows should…


Reflation Trade Overshooting, as Eurozone Political Tail Risk Revives - 17th Nov 2016

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Morgan Stanley (MS US)

Trump Not Likely to Halt Decline of US. But Ray Dalio Makes Good Case in Bringing Back Ayn Rand

I was working on a bigger piece on HK vs Singapore which I will put out later, and reviewing political classifications of economies, when I saw a...

Charles De Trenck

2017 Asset Allocation Outlook: Part 1 – Emerging Markets and Commodities

Overweighting EM versus DM and global resources/deep cyclicals looked like a compelling contrarian bet coming into Q1 as consensus bearishness...

Sean Maher

The New Future of US Banking and Financial Services Regulation

The presidential election has opened the possibility of significant changes to the Dodd-Frank Act regime that has been implemented over the last...

Dechert LLP

Consensus Rethinks Japan, as Serial Extrapolation Proves Costly

We saw consensus ‘groupthink’ reach new levels in 2016, exacerbated by surging AUM managed in trend following style. Extrapolation remains the...

Sean Maher

Reflation Trade Overshooting, as Eurozone Political Tail Risk Revives - 17th Nov 2016

Gold miners have crashed about a third since the August 25th note warning they were vulnerable to real yields (with which gold inversely...

Sean Maher

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