This article defines the four phases of the credit cycle, then details how investors should position credit portfolios to profit from coming phases.
Memos
Does Australia have a House Price Bubble and are RMBS at Risk?
The question of whether Australian house prices are excessive is increasingly being asked. This article briefly reviews the theory and history of housing bubbles, before analysing Australian house prices and what impact a bubble could have on Residential Mortgage Backed Securities (RMBS).
All the Hallmarks of a Credit Bubble in China
In the lead up to previous credit crises, six indicators have pointed to the impending danger. This article analyses how China benchmarks against these indicators and concludes that China is highly likely to be heading towards a credit crisis and substantial economic downturn.
Making Basel 3 Better: Cost Efficient Improvements that Will Reduce the Frequency and Costs of Bank Failures
The Basel 3 bank reforms were proposed as a response to the problems of 2007-2009, with the changes intended to substantially lessen the likelihood of another round of global bank bailouts. This article examines the key reforms and puts forward an alternative view of what will best protect taxpayers from bearing the costs of future bank bailouts.
Five Banking and Investment Lessons from the London Whale Incident
JP Morgan’s internal report on the losses incurred by the so called “London Whale” provides a unique insight into the risk culture of a large investment bank. This article summarises the significant events covered in the report and details five key lessons for investors and regulators.