Trading Natural Gas Futures Seems Very Risky, Why is That?

Natural gas futures prices have been extremely volatile in 2022 since the Russian invasion of Ukraine and the stories of heavy losses by traders and speculators begs the question why. There are several reasons why trading natural gas futures can be risky. One reason is that the price of natural gas is highly volatile and can fluctuate significantly in a short period of time. This makes it difficult to accurately predict the future price of natural gas, which can lead … Continue reading “Trading Natural Gas Futures Seems Very Risky, Why is That?”

Using The Market Dislocation Index to Enhance Portfolio Risk Adjusted Returns

We have seen the dislocation of financial markets at breakneck pace within a plethora of imploding asset values and credit balloons. Markets are operating under extremely stressful conditions and experiencing large, widespread asset mispricing. Significant market dislocations have become not uncommon over the past 20 years. They can provide attractive buying opportunities for those prepared to provide liquidity (at a discount) when sellers demand. It’s all down to timing and capitalizing on dislocations has the potential to enhance a portfolio’s … Continue reading “Using The Market Dislocation Index to Enhance Portfolio Risk Adjusted Returns”

Federal Reserve Monetary Policy Report Outlines Risks to Inflation, Liquidity and Employment

The Federal Reserve released its twice–yearly monetary policy report with the focus on the Banks response to sustained inflationary pressures and a strong labor market, the FOMC has been adjusting its policies and communications since last fall. Financial conditions have tightened significantly this year. The expected path of the federal funds rate over the next few years shifted up substantially. Federal Reserve Semi-Annual Monetary Policy Report June 2022 Economy Recent indicators suggest that private fixed investment may be moderating but … Continue reading “Federal Reserve Monetary Policy Report Outlines Risks to Inflation, Liquidity and Employment”

Federal Reserve Financial Stability Report Warns on Worsening Liquidity Risks

The Federal Reserve released its twice–yearly report on financial hazards in its 2022 financial stability report warning the recent deterioration in liquidity has not been as extreme as in some past episodes but the risk of a sudden significant deterioration appears higher than normal. They also noted commodities have been subject to notable dysfunction. Federal Reserve 2022 financial stability report Highlights‘ “According to some measures, market liquidity has declined since late 2021 in the markets for recently-issued U.S. cash Treasury … Continue reading “Federal Reserve Financial Stability Report Warns on Worsening Liquidity Risks”

Investors Record Exposure to Bond Duration Could Mean Trillions in Losses Should Interest Rates Rise Moderately

Inflation expectations around the globe continue to rise, hitting multi decade highs in some cases. With investors’ exposure to duration near record highs what may seem an unassuming rise in yields could inflicts trillions of dollars in losses.

Federal Reserve Financial Stability Report Warns on Worsening Liquidity Risks

The Federal Reserve released it’s twice–yearly report on financial hazards in it’s 2020 financial stability report warning that the coronavirus (COVID-19) pandemic has caused tremendous human and economic hard-ship across the United States and around the world. They warned on assets if the pandemic worsens. Federal Reserve 2020 financial stability report Highlights Warns financial sector vulnerabilities likely to be significant in near-term Pandemic strains on household and business balance sheets likely created fragility’s that last for some time Warns banking … Continue reading “Federal Reserve Financial Stability Report Warns on Worsening Liquidity Risks”