The Biotech anomaly

In the low-growth environment we are currently living in, one should expect that fast-growing sectors command a premium. However, what we have recently observed is a rush to low-growth, high-dividend stocks (so-called “bond proxies”) in a capitulation by investors crowded out of the bond market by central banks. These yield-starved investors have reluctantly bought the … Continued

Infrastructure planning and moral hazard

As central banks around the world deplete their monetary arsenal without succeeding in reviving growth, strong consensus is building for large fiscal stimulus in the form of infrastructure investments. Contrary to QE, widely criticized for contributing to the increase in social inequality, infrastructure investments are palatable to all parts of the political spectrum as they … Continued