Our expectation is that we will continue to see downward revisions to growth forecasts in advanced economies….A small number of emerging markets can decouple, particularly those that are able to generate strong domestic demand such as China, India, Brazil and Indonesia…I believe in the resiliency of the emerging markets. They have the balance-sheet strength to continue funding their development, whereas we in the West are over-stretched.
—David Gerstenhaber, Argonaut Macro Partnership Fund, $1b AUM: via Bloomberg
It’s an extraordinary financing environment. When you juxtapose this opportunity with how the world felt at the end of April and early May, I think treasurers all the way up to CEOs see a compelling opportunity to put more cash onto the balance sheet…The market was prepared for an oil spill that was not going to be capped, a stress test that would highlight significant capital shortfall in Europe, and an earnings season with no top-line revenue growth. None of those scenarios materialized so the market has had to reprice across the capital structure.
Investors think the Fed’s going to be on hold for a good long time and they’re not really worried about rates going up in any true dramatic fashion as they were only a few months ago
Credit looks like it offers a lot of value. There’s a lot of appetite for those new issues that have come to the market recently. And I suspect there’ll be a lot of new issue debt coming in the next few months which will meet with quite a bit of oversubscription and quite a bit tighter spreads.
We’re seeing a sort of handover from consumer spending to capital spending. The consumer also looks to have saved more than we thought before, which means they’re perhaps further on road to financial adjustment than we thought they were previously…There are limits on the degree to which you can substitute capital for labor. But you can understand that businesses don’t have to pay health care on equipment and software, and these get better tax treatment than you get for hiring people. If you can get away with upgrading capital spending and deferring hiring for a while, that makes economic sense, especially in this uncertain policy environment.
—John Ryding, chief economist at RDQ Economics, on the announced GDP growth of 2.4% in Q2, vs a revised 3.7% in Q1, the sudden increase in nonresidential fixed investment, from 7.8% to 17% growth, the upward revision of the personal savings rate of 6.2% over 4%, and a slight decline in the growth of consumer spending, from 1.9% in Q1 to 1.6% in Q2: via NYT
Hedge Fund YTD* 2009 2008 2007 TOTAL RETURN** Rubicon Global 15.2 14.9 44.8 6.8 105 Perella Xerion*** 3.4 35.3 0.3 38.8 95 Bluecrest Capital 9.3 45.4 6.3 10.8 87 Waterstone 2.4 49.3 12.1 7.5 84 Brevan Master 1.5 18.7 20.4 25.2 82 COMAC Global Macro 4.1 14.9 30.7 10.7 73 EMF Fixed Income 0.8 11.2 22.0 16.6 59 Banyan Capital 5.1 11.5 14.4 16.5 56 Capula Relative Value 6.7 12.3 9.6 18.0 55 Galena 6.3 12.7 21.6 2.9 50 Argonaut 1.5 10.1 12.3 18.1 48 King Street Capital 1.4 20.1 2.5 17.3 46 Denali Partners 9.6 4.2 19.2 6.7 45 Caxton Global 4.0 6.2 12.9 1.1 26 Brownstone Catalyst 0.6 7.5 7.0 6.8 23