What we’re reading (11/15)
“The Meaning Of RCEP, The World’s Biggest Trade Agreement” (The Economist). “The process has been as agonising as the name is clunky. But the 15 Asian countries that on November 15th signed the Regional Comprehensive Economic Partnership (RCEP) in a virtual ceremony in Hanoi can at least congratulate themselves on breaking some records. RCEP is the world’s largest plurilateral trade agreement. It would have been bigger still had India not withdrawn a year ago. After eight years of what Malaysia’s trade minister, Mohamed Azmin Ali, called ‘negotiating with blood, sweat and tears,’ the remaining countries have achieved a victory for regional co-operation at a time when covid-19 has ravaged the global economy.”
“Bond Investors Win Big Betting On U.S. Consumer” (Wall Street Journal). “Investors who bet U.S. consumers would keep paying debts this year are reaping a windfall as households spend less and save more against the backdrop of a still-ailing national economy. Bonds backed by consumer loans returned about 10% through October, according to data from Citigroup Inc., making them one of the top-performing investments of 2020. Prices for the so-called asset-backed securities have soared as consumers bucked expectations and responded to the coronavirus pandemic by paying down debt at a rapid clip.”
“Waiting For The Next Big Trade With Jeffrey Gundlach” (Real Clear Markets). “Jeffrey Gundlach, CEO of DoubleLine Capital, has evolved his investment style over the years, and although he is still the ‘bond king,’ increasingly he has become multi-asset with a focus on getting the macro right. In this interview with Real Vision CEO Raoul Pal, Gundlach explains how he thinks about time frames, position sizing based on asset class, and how his style changes based on whether the market is alpha or beta driven.”
“A Better Model For Economic Forecasting During The Pandemic” (Harvard Business Review). “There is a monumental need for timely and reliable economic forecasts. In lieu of them, policymakers and businesses are increasingly turning to real time alternative data sources, like mobility data from Apple and Google, or credit card transaction data. While valuable, these data sources lack important context and connectivity to larger economic trends….[e]ven so, reliable forecasting is possible right now. The missing ingredient is an enhanced understanding of consumers’ changing needs, attitudes, and behaviors. With this in mind, we’ve developed an approach that renders consistently accurate forecasts, even in uncertain times, by combining forward-looking consumer sentiment with real time transaction data.”
“Belgian Racing Pigeon Fetches Record Price of $1.9 Million” (U.S. News & World Report). “A wealthy Chinese pigeon racing fan put down a record price of 1.6 million euros ($1.9 million) for the Belgian-bred bird, saying a lot more than merely what kind of money can be made in the once-quaint sport, which seemed destined to decline only a few years back.”
