The Economics of Oil: Crude Hope and Complicated Reality Stephen King, HSBC, December 5, 2014 The plunge in oil prices over the past few months has been dramatic but is by no means unprecedented. While the global economy might benefit from lower prices as it has in prior declines, other factors present today suggest the…
The current decline in oil prices may offer long-term return opportunities for patient investors that can tolerate volatility Current oil prices appear sufficiently low as to encourage production declines over time as drilling activity wanes, even absent shutting-in of existing wells. The time required to move from production growth to production decline may be shorter…
No, the fall is a net benefit. Falling commodity prices create more divergent emerging markets conditions, generally benefitting net commodity consumers at the expense of net commodity producers. Among emerging markets, net commodity importers are largely Asian, while exporters are more concentrated in Europe, Latin America, South Africa, and the Middle East. Historical relationships between…
Imagine that during a single year, the following events all took place: a country that produces 13% of the world’s oil became engaged in armed conflict; the United States and other nations fought a self-declared caliphate looking to quickly spread its influence in the oil-rich Middle East; and a nation that produces 3% of the…
Executive Summary Managed futures refers to a subset of investment strategies that actively trade global fixed income, currency, commodity, and equity markets via futures and forward contracts. Approximately 70% of the capital deployed within managed futures programs is attributable to trend following strategies. Trend following is synonymous with momentum investing and is based on the…
The trickle of banks leaving the commodity space has become a veritable flood. Over the past six months some of the biggest global banks have announced plans to either dramatically scale back operations or exit the physical trading business entirely, leaving the space increasingly in the hands of specialized merchant banks—e.g., Mercuria and Tudor Pickering—and…
Today’s estimated global overhang is $909 billion net of fees, with US private equity, European private equity, and real estate the primary contributors. With capital appearing to be deployed at a slower pace than historically, the overhang is larger than expected. Too much overhang and the pressure to put capital to work before it expires…
The options within public and private infrastructure investing have widened substantially over the last decade. This report provides an overview of infrastructure—including the characteristics of the asset class, the risks of investing, historical performance, current trends, and implementation considerations—and summarizes the attractions of and considerations for an investment in various infrastructure segments.
A look at the growth of the 2006 U.S. real estate and REIT markets. Report covers private real estate, public real estate securities, the various property sectors (office, apartment, retail, industrial, and hotel), as well as provides strategy suggestions for investors in the real estate market.
A substantive discussion on the recent negative roll yield of the Goldman Sachs Commodity Index and what it means for investors. This paper also touches on the GSCI Total Return Index, the Dow Jones-AIG Commodity Index, historical returns of commodity indices, and offers implementation options to commodities investors.