Investments

The Coming Credit Event – Charts Before the Storm

Jack Duval

There’s no way the biggest and longest credit expansion in the history of the world ends in a credit whimper.

bantam inc jack duval multi-family office manhattan new york - sharknado

Artist's rendering of debtnado.

As I have written about here, the corporate bond market has become toxic due to increased leverage levels, the record issuance of low-quality bonds, and leveraged loans (this cycle’s poster boy for excess).  All of this has been made possible by the synchronized global central bank policy of lowering interest

rates to zero (or below zero) after the Global Financial Crisis. Chart 1: Ratio of U.S. Corporate Debt to GDP[1] Chart 2: BBB Share of Corporate Debt Outstanding[2] The Coming Credit Event It seems highy likely that such excess will culminate in a credit event that will mark the end…

Environmental Risks

Hunger Stones: A 700 Year-Old Profit Warning

Jack Duval

Throughout human history, the economy and the environment have been inexorably linked.

bantam inc jack duval multi family office ultra-high net worth manhattan - hunger stone image 1

Photo: Brazdil and Kotyza, 1995

Hunger Stones In Central Europe, people beginning in the 1100's have marked droughts by carving warnings and dates on rocks in the Rhine, Elba, and other major rivers.  These rocks are known as “hunger stones”.  Like ghosts from the past, these stones and their warnings are being revealed as a

record European drought combined with record heat reduces water levels to all-time recorded lows.[1] Some of the hunger stones’ messages include: “If you see me, weep”; “If you will again see this stone, so you will weep, so shallow the water was in the year 1417”; “Who once saw me,…

Investments

Investment Grade Corporate Bond Risk

Jack Duval

Now is the time for quality investments, especially in fixed income.

bantam inc jack duval multi-family office ultra high net worth manhattan - bond volatility chart

There's a storm coming, Mr. Wayne. (MOVE US Treasury volatility index is set to rise from decade lows.)

Many investors are unaware that 49 percent of all outstanding investment grade corporate bonds are BBB rated (one notch above junk status), up from 34 percent 10 years ago.  This is a 44 percent increase in a decade, something unprecedented. Chart 1: BBB Bonds as Percent of

Investment Grade Index[1] In fact, the entire corporate bond market (not just investment grade) has become something of a toxic wasteland of junk bonds, leveraged loans (for those firms not strong enough to issue any more junk bonds), and BBB (on-the-cusp-of-junk) rated bonds. Chart 2:  The Corporate Bond Market[2] This shifting of corporate…

Financial Planning

Using the Stock Market Rally to Fund Charitable Commitments

Jack Duval

A charitable transfer of stock is a way sell into the rally without adverse tax consequences, as well as generating a tax deduction.

bantam inc. jack duval manhattan multi-family office ultra-high net worth - tax free image

The market has provided an opening for tax-smart transfers.

Just a quick note for ultra-high net worth investors doing year-end tax planning. The market is up 4.7 percent from its recent low on November 23rd.  In pre-market trading, the S&P 500 looks likely to open up another 1.5 percent today.  If you have unfulfilled charitable commitments for 2018, today would

be a good day to fund them. As I've written about in my Tax Alpha blog post, a smart way to rebalance portfolios is to make charitable donations of appreciated assets.  This has the effect of reducing your exposure to the asset that has outperformed while avoiding the tax consequences of…

Investments

A Risk Manager’s Perspective of the Markets – Bantam Video

Jack Duval

Things are starting to break in the markets. Watch this video to see what's next.

bantam inc. jack duval new york manhattan multi-family office - NVDA chart

Hello darkness, my old friend. Chart of Nvidia.

In this video, Bantam CEO Jack Duval takes you through the major markets from a risk managers perspective. Nothing in this video

should be considered investment advice.  You should speak with your advisor.   https://www.youtube.com/watch?v=95eph5Rf7nQ